Can bitcoin swing the election?

One side's liability could become the other's asset.

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BITCOIN BOX SCORE

Exchange Rate: $65,190
Market Capitalization: $1.28T
Hash Rate (90 days): 600.8 EH/s
Transactions (30 days): 16,301,786
Network Fees (day): 12 sat/vB
Bitcoin Dominance: 56.10%

Four years ago, it would have been unimaginable for leading presidential candidates to mention bitcoin on the campaign trail.

That changed during the primaries last year when candidates DeSantis, Ramaswamy, and Kennedy Jr. delivered speeches at bitcoin conferences, sat down on major bitcoin podcasts, and included bitcoin planks in their respective platforms.

Still, most did not¬†see¬†bitcoin¬†and crypto as issues that could impact the general election ‚Ästuntil last week.

In response to the Biden administration’s heavy-handed actions against the industry, President Trump declared that he was "fine with it" and urged industry supporters to vote for him. He also expressed his intention to keep the industry within the United States, as many firms have left due to the arbitrary and hostile regulatory environment enacted by the Biden administration.

This marks an evolution for Trump, who had previously disparaged bitcoin in light of its perceived threat to the dollar.

Given that over 20% of Americans own bitcoin or other crypto and no significant opposition is aligned against the industry, Biden's stance is increasingly seen as a threat to his campaign, especially considering the close poll numbers. 

A recent poll shows voters in swing states identify bitcoin and crypto as a major issue. Pro-bitcoin and crypto PACs are pouring millions into the general election, senate, and house races. 

Fifteen years ago, Satoshi Nakamoto released bitcoin into the world. It now might impact the presidential election in the most powerful nation on earth.

How many single-issue crypto voters are there? Given that presidential contests are decided by the thinnest of margins, might crypto voters swing the election?

NEWS

ūüďą Hedge funds and pensions allocate millions to spot bitcoin¬†ETFS

Hedge funds Millennium Management and Paul Singer's Elliott Capital revealed significant allocations to spot bitcoin ETFs in their 13F filings, with Millennium holding roughly $2 billion across various ETFs. Other notable firms like Apollo Management Holdings also disclosed substantial stakes. The State of Wisconsin Investment Board invested nearly $100 million in spot products, becoming the first state to invest in bitcoin.

Vibe shift.

Remember when the media claimed bitcoin was only for criminals? Ownership by state governments belie that assertion. Government investment analysts who manage pension funds decided that bitcoin exposure is prudent. Expect others to follow.

ūüŹõÔłŹ House Financial Services Committee advances market structure bill¬†FIT21

Last July, the House Financial Services Committee advanced two significant bitcoin and crypto market structure bills, but political delays postponed a vote for nearly a year. Now, the House plans to vote on the market structure bill known as FIT21. In its current iteration, the bill includes protection for self custody and outlines a general market structure for industry participants, preventing regulators from arbitrarily deciding enforcement actions.

Will it pass?

Industry leaders have championed the bill, and it stands a good chance of passing the House. The Senate¬†voted today¬†to overturn SAB121, the controversial SEC rule preventing banks from working in the industry, generating momentum that could propel the passage of FIT21 ‚Ästalthough it will undoubtedly face opposition from hostile Senators like Warren and Brown. As Riot's Sam Lyman states:

FIT 21 is likely to pass the House in the next month. The same bill passing in the Senate is still a long shot‚ÄĒbut odds are not zero.

Sam Lyman

‚ĚĆ Biden bans Chinese-backed bitcoin miner

President Joe Biden issued an order blocking a Chinese-backed bitcoin and crypto mining firm from owning land near Wyoming's Francis E. Warren Air Force Base due to national security risks. The order, coordinated with the U.S. Committee on Foreign Investment, mandates the divestment and removal of equipment from the site. The move coincides with new tariffs on Chinese imports.

ūüĒĄ Government officials change their tone on stablecoins

Federal Reserve Governor Michelle Bowman urged states and the federal government to form a partnership to regulate stablecoins, highlighting the need for collaboration during the DC Blockchain Summit. Senators Kirsten Gillibrand and Cynthia Lummis are also pushing for a stablecoin bill that addresses both state and federal roles, reflecting growing legislative efforts in this area.

Can stablecoins keep the charade going?

As former Speaker of the House Paul Ryan notes, stablecoins can serve the US government's interest because issuers must buy enormous quantities of treasuries to back them. Perhaps this realization (and the recent awful treasury auctions) explains the shift from hostility to openness to stablecoins.

BITCOIN ADOPTION CONTINUES

TeraWulf Inc. reported mining 1,057 bitcoins in Q1 2024, generating $42.4 million in revenue, and announced plans for further expansion and hardware acquisitions to boost its capacity.

El Salvador launched a website to track its bitcoin treasury holdings. Just like Coinbits, they are building in public!

HOW BITCOIN WORKS

Learn one key idea about bitcoin each week. This week:

Bitcoin is a system for digital money.

The term "bitcoin" refers to digital currency units called bitcoins and the protocol for creating those units and transacting with them, the Bitcoin Network.

Where did bitcoin come from?

Bitcoin, created in 2009 by the anonymous Satoshi Nakamoto, resulted from years of research and collaboration among technology enthusiasts known as cypherpunks. These individuals aimed to create open-source privacy software to protect freedom and privacy in the digital age. Bitcoin, the first cryptocurrency to stabilize and grow, initiated a monetary revolution that continues today.

Who sets the price of bitcoin?

The bitcoin token had no real-world value for months after its invention, until the first priced transaction set it at $0.0010 per bitcoin in October 2009. The first real-world purchase with bitcoin occurred in May 2010 when a computer scientist bought two pizzas for 10,000 bitcoins. The price of one bitcoin rose to over $1,000 by the end of 2013 as interest spread and bitcoins were traded among enthusiasts.

Today, bitcoin is used by over one hundred million people worldwide, and a single bitcoin commands tens of thousands of U.S. dollars. Bitcoin's price¬†is determined¬†by trade and commerce. Each bitcoin is divisible into 100 million¬†units called satoshis, which can also¬†be exchanged¬†for dollars. In other words, you don‚Äôt need to own an entire bitcoin ‚Äď most bitcoin users don‚Äôt.

How does bitcoin work?

Newcomers often wonder how bitcoin transactions work. Here's a simplified breakdown:

  1. A user creates and signs a transaction.

  2. The user's computer broadcasts the transaction on the internet.

  3. Mining computers process and add transactions to the bitcoin ledger about every 10 minutes.

  4. The updated ledger is shared with all network participants.

This process operates without banks, governments, or trusted third parties.

Where are bitcoin's servers located?

Bitcoin is unique because it is decentralized, with "nodes" (a rough equivalent to servers) located across the globe, even broadcasting from satellites. No single entity controls it, making it resilient to takeover or shutdown. Anyone can run a bitcoin node ‚Äď and you are encouraged to do so. When you do, you help the security and resilience of the Bitcoin Network. It‚Äôs easy to download the software to run a node, and you can use pretty much any computer to do it.

How are bitcoins created?

Bitcoins are created through a process called "mining." Miners use computers to solve mathematical problems that order transactions and prepare them for broadcast. When miners "solve a block," a new group of transactions is added to the ledger (blockchain), and the miner is rewarded with bitcoin. Because mining costs money, miners trade some of their freshly minted bitcoin for resources like electricity and hardware. This is how new bitcoins are introduced into circulation.

Notably, bitcoin's supply is limited. Only 21 million bitcoins can ever exist, ensuring its scarcity over time.

This combination of decentralization, transparency, and finite supply differentiates bitcoin from traditional fiat currencies and other cryptocurrencies that came after it.

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COIN CHECK

Which bitcoin wallet provider was the first to introduce a multi-signature wallet?

  1. Electrum

  2. BitGo

  3. Crypto.com

  4. Coinbase

Check your answer at the end of the page.

FROM THE MEME POOL

This week’s meme relates to the guilty verdict handed down to Alexey Pertsev, developer of privacy software Tornado Cash. Although Tornado Cash can be used for money laundering, during his trial, Mr. Pertsev was not accused of participating in money laundering schemes. Instead, he was found guilty for the crimes of others who used the tool he built. This is unjust on its face, as the meme below makes clear.

ANSWER

  1. BitGo

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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