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Is bitcoin all grown up?
Adoption is growing and traditional finance wants in.
Dave Birnbaum & David Waugh
June 29, 2023
BITCOIN BOX SCORE
Exchange Rate: $30,630
Market Capitalization: $594.7B
Hash Rate (90 days): 357.3 EH/s
Transactions (30 days): 12,222,384
Network Fees: 15 sat/vB
Bitcoin Dominance: 52.13%
Bitcoiners,
Enthusiasts and experts in the bitcoin world often say, "We are still so early."
Yet, bitcoin's network has run smoothly for 13 years now, allowing individuals and institutions to store and transfer value globally, uplifting millions.
One bitcoin became worth more than one dollar only two years after it was invented. Today, one bitcoin commands a dollar exchange rate over $30,000. Mainstream pundits are defending it against a shrinking crowd of naysayers.
Once vehemently opposed, Wall Street is embracing bitcoin and entering the market with new bitcoin ETF products. Multiple U.S. Presidential hopefuls include bitcoin in their stump speeches.
So, are we still early? Yes. Definitely. It might seem counterintuitive, given recent events, but bitcoin is still far from the adoption it will eventually achieve.
On a long enough timeline, even Wall Street is just a distraction.
Bitcoin is a global monetary network capable of replacing every central bank and traditional financial institution worldwide. It will eventually serve as the measuring stick for the productivity of the global economy, measured in and divided by 21 million bitcoins (or 21 quadrillion sats).
We are still so early.
With that, let's dive into this week's news.
NEWS
Student loan repayments on horizon
After being paused by Presidents Trump and Biden for three years, federal student loan interest and payments will resume this fall, barring additional executive action. The Supreme Court will also likely deliver a verdict this week on the legality of President Biden's student debt forgiveness plan, which seeks to forgive up to $20,000 in debt per borrower.
Americans owe a total of $1.75 trillion in student loan debt, with 92% being in federal debt and the remainder being private debt. Forty-three million borrowers owe student loan debt, and the national average owed per borrower is $28,950.
The impact:
Forcing people to start paying down their loans again will dampen economic growth as consumers shift spending away from goods and services. Rent, food, and other prices have risen since loan payments were paused in 2020, increasing the total financial burden borne by borrowers.
How many bitcoins are for sale?
Given its fixed schedule, bitcoin's supply differs from other forms of money. In other cases, supply is determined by how much can be produced from the earth (gold), or how many central bankers want to print on a given day (sovereign currencies). Bitcoin’s price in dollars is a function of how many bitcoins there are and how much market demand exists for them. As of today, about 19 million bitcoins have been minted.
However, there’s a problem: There may be 19 million bitcoins, but most are not for sale. Glassnode analysts released a report analyzing bitcoin's supply dynamics in light of new demand from institutional investors, finding that long-term hodlers control 74.5% of bitcoin supply.
Among the "short-term" cohort, analysts also observe that “market psychology appears to have shifted from the bear market blues of 2022.”
National debt interest payments loom
Total U.S. debt quietly passed $32 trillion as the Treasury borrowed an additional $700 billion after Congress raised the debt ceiling.
The issues go beyond the debt ceiling, however. Due to the Federal Reserve interest rate hikes, interest payments on newly issued debt will be much more expensive for the federal government to maintain.
Rate hikes are supposed to tame inflation. But here’s the rub…
If interest rates continue to rise and remain high for an extended period, interest expenses will quickly become one of the top three federal expenses. And, since the interest on the debt will ultimately be paid with newly printed money, interest rate hikes might increase inflation.
BITCOIN ADOPTION CONTINUES
The House of Representatives in North Carolina passed House Bill 721, which mandates the State Treasury to examine the procurement of and potential advantages of digital currencies, with Bitcoin being a primary point of focus.
Democratic Presidential candidate Robert F. Kennedy Jr. released a video stating that he would safeguard the individuals right to use and hold bitcoin.
Michael Saylor's MicroStrategy acquired 12,333 BTC for about $347 million, bringing its total holdings to 152,333 BTC, about 0.726% of the maximum supply of 21 million bitcoins.
Tether signed a Memorandum of Understanding with the Georgian Government to establish Georgia as a key hub for peer-to-peer technology.
HOW BITCOIN WORKS
Learn one key idea about bitcoin each week. This week:
Bitcoin is Stoic
Even in today's fast-moving digital age, philosophy plays a core role. It remains the foundation on which academic disciplines are built and influences how we think about ourselves and the world around us.
Ancient philosophy and modern digital cash exist in wholly different spheres. Yet, in many ways, bitcoin adheres to Stoic principles.
First, bitcoin's decentralized nature aligns with the Stoic ideal of understanding and accepting the world as it is.
Unlike traditional fiat currencies, which are controlled by central banks and subject to governmental policies, bitcoin operates independently. It does not bend to the whims of men and women.
Its immutable public ledger reflects the Stoic principle of seeking truth and transparency: there's no room for deceit.
Bitcoin's resilience mirrors the Stoic ideal of fortitude. Since its inception in 2009, bitcoin has faced criticism, legal threats, and volatility.
Despite these challenges, it continues on like clockwork, and more people use it every passing year. This resilience in the face of adversity captures the Stoic principle of endurance – and staying on one's path irrespective of external circumstances.
Bitcoin also teaches personal resilience and responsibility. Unlike fiat currencies stored at a bank, bitcoin offers individuals and institutions control of their own money.
While it may seem curious to connect an ancient philosophy to modern technology, bitcoin embodies fundamental principles of Stoicism. Its decentralized nature, transparency, and resilience echo Stoic ideals.
Stoicism is a system of thought that aims to show how to live a meaninful life. Bitcoin provides a practical application of these principles in the digital age.
Ready to get started with bitcoin? Coinbits is the best option. It's fast, safe, and free to create your account.
COIN CHECK
What are the most common denominations of bitcoin?
Bitcoin (BTC), CentiBitcoin (cBTC)
Bitcoin (BTC), Satoshi (Sat)
BCH, ETH
Bitcoin (BTC), Finney
Check your answer at the end of the page.
ANSWER
2 – Bitcoin (BTC), Satoshi (Sat).
While other denominations exist, bitcoin (BTC, the base unit of bitcoin) and Satoshi (the smallest unit of bitcoin, equal to one-hundred-millionth of a bitcoin (0.00000001 BTC)) are the most commonly used units in regular discussions and transactions.
That’s all for this week, folks! When you signed up for this newsletter, we promised to act as your personal guide and help you understand what’s happening in the world of bitcoin. What did you think of today’s newsletter? Reply to this email and let us know what you’d like to see more of.
Until next week!
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