BITCOIN BOX SCORE
Market Capitalization: $561.1B
Hash Rate (90 days): 403.5 EH/s
Transactions (30 days): 9,242,049
Network Fees (day): 8 sat/vB
Bitcoin Dominance: 52.33%
"There's something wrong with the world. You don't know what it is, but it's there, like a splinter in your mind, driving you mad," says Morpheus to Neo in the Matrix's famous blue pill/red pill scene.
Have you ever felt this way? Chances are you have.
Whether it's politicians gaslighting consumers on the state of the economy or pundits telling you the war on inflation is over and "won at little cost," something doesn't add up.
Prices aren't always supposed to rise, and the value of our money should not decrease by 20% in just two years.
Unfortunately, the "economic education" taught in many schools is actively misleading as it defends a status quo where a group of unelected bureaucrats in Washington, D.C., tries to control the value of money.
However, things don't have to be this way.
Just as Neo was offered a choice between the reality-shattering red pill and the blissfully ignorant blue pill, bitcoin opens the door to the government money "rabbit hole" – revealing the system's flaws and how things should be.
With that, let's dive into the news.
California gets a Bitlicense ☭
Governor Gavin Newsom signed California's Digital Financial Assets Law, similar to New York's "BitLicense." Starting in July 2025, the state's Department of Financial Protection and Innovation will regulate the industry through licensing and enforcement.
Will this chase firms out of California?
Major companies in the crypto industry are based in California. When New York introduced the BitLicense, several firms moved out of state in response. So far, the response to California's version has been more restrained, mainly because it is more ambiguous. Keep an eye on how the rules evolve over the next few years. Or if you’ve already decided you’ve had enough and want to seek (literal) greener pastures, check out our research on the most bitcoin friendly states.
Fake spot ETF approval news pumps BTC 🚀
Bitcoin's price surged to $30,000 after an inaccurate tweet from Cointelegraph claimed the SEC approved a Bitcoin ETF, though the price settled around $28,000 once the news was debunked.
Is ETF approval already priced in?
Analysts forecast that the spot ETF will eventually be approved. This suggests that the market has already factored in the approval, particularly since the SEC chose not to appeal their loss in the Grayscale decision.
However, the fake news incident demonstrated that the market will likely react positively when approval finally comes.
Lightning labs releases Taproot Assets ⚡️
Lightning Labs announced the Taproot Assets mainnet alpha daemon, a pioneering innovation that uses bitcoin technology to manage and create stablecoins and various assets while upholding bitcoin's core principles.
This advancement marks a transformative moment for bitcoin's role in the global financial system. It reimagines how financial exchanges could operate by leveraging bitcoin's intrinsic liquidity, paving the way for a future of multi-asset trading on the Lightning Network.
More exciting implications
As the desire grows to integrate various assets like gold, company bonds, and government securities into the bitcoin network, this development paves the way for making such aspirations tangible.
CPI update: all eyes on oil 🛢️
The Consumer Price Index (CPI) increased for the third month. In August and September, there were spikes due to oil prices. Over the past year, the CPI has risen by 3.7%. The main contributing factors were the cost of transportation and shelter, which are strongly dependent on oil prices.
It’s hard for the Fed to combat rising energy prices because it lacks a specific tool. If oil prices continue to rise, it will become even more challenging for the Fed to fight inflation.
This will also affect the Fed's tight money policy, which is already under strain as banks are feeling pressure from a high federal funds rate.
BITCOIN ADOPTION CONTINUES
HOW BITCOIN WORKS
Learn one key idea about bitcoin each week. This week:
Bitcoin is divisible
We've been taught that increasing the money supply leads to prosperity and growth, and that deflation is somehow dangerous. But what if this is a false belief?
John Locke, the philosopher from the turn of the 18th century, stated,
Suppose an island, separate from the commerce of the rest of mankind; if gold and silver, or whatever else (so it be lasting) be their money, if they have but a certain quantity of it, and can give no more [if all other money be prohibited] that will be a steady value of all other things.
Locke’s theory is this: It doesn't matter how much money there is as long as it's stable. In practice, however, there is a good faith argument to be made that if there are too few units of currency in an economy, trade is constrained.
With gold or fiat, this can be a problem. Because these forms of money can only be divided so small, you need enough units that liquidity is maintained in a large and growing economy.
Bitcoin has many superpowers, one of which is divisibility – and this sets it apart from every single form of money that came before. The ancient Egyptians used grain as money, which is highly divisible into single seeds.
And yet, even though their money could be divided into tiny pieces, a barrel of grain is still is not even close to being as divisible as a bitcoin.
Bitcoin effectively and permanently neutralized the problem of money divisibility. One bitcoin can be divided into tiny fractions called sats, each one of which is one 100,000,000th (one one-hundred-millionth) of a bitcoin.
Today, sats are so small that they have barely any value – they are like the grains of ancient Egypt. But, if Bitcoin were ever to be adopted as a world reserve currency, the purchasing power of a single sat could start to approach that of today’s U.S. cent. What then?
This is of no concern, either. Bitcoin is digital, so it is infinitely divisible. If sats one day became too valuable, the Bitcoin network could be upgraded to divide bitcoins even smaller. There is no lower limit to how small a fraction of a bitcoin can be. Billionths or trillionths of a bitcoin could be earned and spent just as easily as sats and whole bitcoins can be today.
Put simply, with the invention of bitcoin, there is no longer an upside to adding more units of currency into the economy, but there remains many severe downsides.
So why are central banks constantly increasing the monetary supply? We aren’t mind readers, but from the outside we can observe that they are using outdated economic theories to sustain a system that happens to benefit an elite class of asset holders.
Bitcoin is not only a novel currency, it is also a technology breakthrough that changes what is possible. It is the responsibility of all those who have influence over monetary policy to revisit their assumptions about the tradeoffs associated with inflation and deflation.
If they do indeed understand the concept of Bitcoin’s infinite divisibility, but choose to ignore it and continue selling an old model to an uninformed public, it is not unfair to begin to question their motives and ethics.
It's about time we hold policymakers accountable for informing themselves and the public about the real tradeoffs and necessity of increasing the money supply. There is too much at stake to do otherwise.
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.