BITCOIN BOX SCORE

Exchange Rate: $62,900
Market Capitalization: $1.26T
Hash Rate (90 days): 935.8 EH/s
Transactions (30 days): 20,278,478
Network Fees (economy): 1 sat/vB
Bitcoin Dominance: 58.97%

What do these numbers mean?

"Markets have a remarkable ability to bankrupt investors who are fundamentally right," The Market Ear wrote this week about Leopold Aschenbrenner.

Aschenbrenner may still be right about AI. His fund, Situational Awareness, returned over 400% betting on that thesis. Then July's AI rout cut his portfolio 67% in a single month, and the leverage that powered the run (as much as 4x!) forced him to sell his entire public book to Ken Griffin's Citadel to raise capital after banks started pressuring the fund about its margin. "We came closer to permanent capital impairment than is acceptable to us," he told investors. The fund is still up roughly 80% on the year. Directionally right, but narrowly avoided a blow-up due to the use of leverage.

Being right and executing a thesis are different skills. There were countless social networks before Facebook, and countless attempts at digital cash before bitcoin. The graveyard is full of “correct” predictions of market needs. Bitcoiners relearn this every cycle: leverage lets you do more with the asset, but it isn't free. It converts a drawdown you could have ignored into a margin call you can't. Markets don't care how right you are, and prioritizing survival over return maximization can pay off in the long run.

Risk showed its other face this week, too: technology risk. An attacker swept 594 bitcoin — about $38 million — from roughly 500 COLDCARD wallets in 25 minutes, exploiting a five-year-old firmware flaw that quietly generated “impossible to guess” seeds from a serial number and a clock. The Bitcoin Network has never been hacked. The tools around it can be.

Pierre Rochard wrote that "the utility of a monetary system is an inverse function of the uncertainty experienced by its users." The protocol minimizes uncertainty better than any monetary system in history. Everything bolted onto it — leverage, firmware, custodians — adds some back. You can't eliminate risk. You can only locate it, size it, and refuse to bet the whole stack on it.

Stay smart, and safe out there!

NEWS

Metaplanet's "modest bolt-on" might be a bond market in embryo

Benchmark told clients the market badly undersells Metaplanet's ¥2.1 billion (~$13 million) acquisition of Siiibo Securities, which hands Japan's third-largest bitcoin treasury, consisting of 43,000 bitcoins, a Type-1 license to structure and distribute securities. Director of Bitcoin Strategy Dylan LeClair says the brokerage will anchor “Bitbonds” – bitcoin-backed bonds yielding 4% to 6%, eventually moved on-chain – so that any company adopting a bitcoin treasury can issue debt through Metaplanet's platform.

Capital markets get rebuilt with bitcoin at the core

The market still prices Metaplanet as a passive bitcoin proxy while the company prepares, in LeClair's words, to build “a new kind of financial institution from Japan, with bitcoin at its core.” Last week's newsletter chronicled leveraged treasury companies unwinding; this week shows what the survivors are building instead: bitcoin-native financial infrastructure.

Memecoin traders find a new casino: AI stocks at 20x leverage

Bloomberg reports that crypto-native traders have rotated from memecoins into AI and semiconductor stocks, trading them with the old playbook of anonymous X gurus, cult tickers, and perpetual futures at up to 20x leverage. Stock-linked perps on Binance grew from $85 million in daily volume in February to $5.5 billion in July, while SK Hynix, Micron, and SanDisk contracts did more than $8 billion on Hyperliquid, a prominent decentralized crypto exchange, in a single week. Hedge funds are happily taking the other side and collecting the funding payments retail longs pay.

Speculation is a behavior, not an asset class

The casino doesn’t care what you’re betting on, as long as you’re losing to the house. Gambling behaviors are naturally encouraged in a fiat system that incentivizes short-term thinking and speculation to stay ahead of inflation. That said, the decrease in memecoin trading will impact crypto exchanges that rely on this revenue. This is a difference in what bitcoin provides versus the memecoins and speculative crypto assets: a fixed-supply savings technology for people who want to stop gambling.

A 111-year-old Swiss state bank puts bitcoin in the banking app

BancaStato, the cantonal bank of Ticino, launched regulated bitcoin trading inside its existing web and mobile apps by connecting Sygnum's API to its Avaloq core banking system. Client bitcoin sits off the bank's balance sheet in Sygnum's segregated custody, shielding holdings from creditors if the bank ever fails. Sygnum says its partner banks now offer a regulated route to bitcoin to more than a third of the Swiss population.

Adoption stops being a headline when it becomes infrastructure

A state-owned bank founded in 1915 shipping bitcoin as a routine product update – no press conference, just an API integration – is what the boring middle of adoption looks like.

Saylor: "maybe the best way to buy the most bitcoin is not to buy the most bitcoin"

Strategy posted an $8.2 billion Q2 paper loss, paused bitcoin purchases for a fifth straight week, and built its dollar reserve to $3.75 billion. This is enough cash to cover preferred dividends and interest for roughly two years. Saylor declared the era of "100% allocation to BTC" over. TD Cowen and Benchmark kept their buy ratings, noting management's central objective is now returning its STRC preferred stock to par, with institutional STRC holdings nearly tripling since March to $3.1 billion.

Even Saylor builds a margin of safety

This is the lesson we outline in this week’s introduction: Saylor still holds 843,775 bitcoins and bought 48 coins for every one he sold this year, but he's now engineering to survive the drawdown rather than maximize exposure to it. Conviction gets you in the game; risk management keeps you in it.

Washington haggles over the CLARITY Act as the Treasury Secretary quotes Satoshi

Senators Thom Tillis and Ruben Gallego sent the White House revised ethics provisions for the CLARITY Act, reportedly letting state authorities, rather than the U.S. Attorney General, enforce the ban on federal officials issuing or sponsoring tokens. With Republicans needing Democratic votes to reach the 60-vote threshold and the August recess looming, Treasury Secretary Scott Bessent pressed the Senate to "vote NOW" by quoting Satoshi Nakamoto: "If you don't believe me or don't get it, I don't have time to try to convince you, sorry."

Satoshi is anonymous, yet his words guide the U.S. Treasury

Whatever happens before recess, mark the moment: sixteen years, almost to the day, after an anonymous programmer posted those words to a forum, the man who runs the United States Treasury cites him as an authority to move the Senate. Bitcoin doesn't need the CLARITY Act; Washington, increasingly, needs bitcoin.

BITCOIN ADOPTION CONTINUES

Bhutan's Gelephu Mindfulness City appointed asset manager 3iQ to manage part of its strategic bitcoin allocation of up to 10,000 coins.

Strive crossed the 20,000 bitcoin mark with a purchase of 79 coins at an average price near $65,700 – unleveraged and still stacking through the drawdown.

U.S. spot bitcoin ETFs snapped a four-day outflow streak with $233 million of net inflows led by BlackRock's IBIT.

Kraken Institutional signed an MOU with VerifiedX to explore bringing programmable bitcoin into its qualified custody offering.

On-chain data shows wallets holding 1,000–10,000 bitcoins accumulated steadily through July — a transfer of supply from short-term holders to long-term allocators.

HOW BITCOIN WORKS

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

How multisig works

Most bitcoin wallets are single-signature, which means knowledge of one private key lets you move coins to another wallet (i.e., spending them). The protocol also supports “multi-signature” wallets, often called multisig. Coins in a multisig wallet require knowledge of several keys to be moved.

This idea is far older than bitcoin. Medieval monasteries guarded the relics of saints by giving each monk a partial key to the crypt. Bank safe deposit boxes still open with two keys: yours and the bank's.

Bitcoin made the pattern programmable. Multisig was standardized in 2011 and became practical with the pay-to-script-hash upgrade of April 2012. The first commercial multisig wallet followed in 2013.

A multisig address is built from several public keys plus a spending rule, written "M-of-N": 2-of-3 means any two of three designated keys must sign. The rule is embedded in the address itself and enforced by every node that validates transactions. It cannot be altered after creation; changing the multisig rules of a wallet would require moving the coins to a new address.

Different quora fit different needs. A 2-of-2 works like a joint account requiring both spouses to sign off on spending. A 2-of-3 enables escrow: buyer, seller, and arbiter each hold a key, and no single party can move the funds alone. In collaborative custody, you usually hold two of three keys, and a provider holds the third — able to help you recover, unable to spend without you. Corporate treasuries often use 3-of-5 among directors.

How many signatures are best? The tradeoff is complexity for redundancy. Multisig removes dependence on any single key or device. Still, there are more keys to generate, back up, and store separately – and if you lose more keys than the quorum allows, the coins are unrecoverable. Multisig also isn't a complete security plan on its own; it sets no spending limits and sends no alerts.

Every security solution comes with trade-offs. Whether one key or several is right depends on how much you're securing, and which failure you most want to avoid.

COIN CHECK

Multisig, a security posture that requires multiple keys, predates bitcoin by nearly a millennium. Which of these is credited as an early real-world use of multi-key security?

A. Sealing pharaohs' tombs in ancient Egypt
B. Protecting saints' relics in medieval monastery crypts
C. Securing Medici gold in Renaissance Florence
D. Guarding Gutenberg's first printing presses

Check your answer at the end of the page.

FROM THE MEME POOL

Follow us on X for more fresh content

ANSWER

Answer: B. For centuries, the superior of a monastery would give monks only partial keys to the crypt holding sacred relics. No single monk could open it, and no single thief could rob it. Bitcoin made the ancient idea programmable: M-of-N multisig was standardized in 2011. After this week, when 500 single-signature wallets lost $38 million because a particular key generator was flawed, the value of this thousand-year-old design speaks for itself.

Was this email forwarded to you? Sign up here.