BITCOIN BOX SCORE
Market Capitalization: $809.0B
Hash Rate (90 days): 490.4 EH/s
Transactions (30 days): 15,352,870
Network Fees (day): 42 sat/vB
Bitcoin Dominance: 51.05%
This week, financial writer Samantha LaDuc labeled bitcoin as "Rogue Money" in a rambling X post, prompting pushback – along with some backhanded praise for coining a cool new nickname for bitcoin.
In many ways, bitcoin is rogue money (although not the kind LaDuc envisions), and that's a good thing. Rogue money captures the idea of a decentralized alternative to centralized, surveilled, government-controlled currencies. In contrast, the U.S. dollar might be characterized as Empire Money.
Bitcoin exists outside the control of any one party, and that is partly why it is so powerful. Its monetary policy is fixed by consensus of all participants. For technocrats used to using monetary policy as a lever to “tune” society to their preferences, bitcoin is hard to comprehend. But for its millions of users, bitcoin offers a path to freedom from coercion, censorship, and manipulation.
Embracing the moniker of Rogue Money, bitcoin's community considers it a declaration of independence from Leviathan and its money printer.
Welcome to the era of Rogue Money, where you will own your money and be happy.
With that, let's dive into the news.
Stablecoins on the move: Tether, Circle, and PSYUD.
Tether, the largest stablecoin issuer by market capitalization, continues increasing the supply of USDT. It is expected to surpass $100 billion, making it the first stablecoin to do so. Tether has also increased its bitcoin holdings to 66,465 BTC, valued at approximately $2.8 billion, with its latest purchase of 8,888 BTC in the fourth quarter of 2023.
Circle, the company responsible for the USDC stablecoin, has recently filed for an initial public offering (IPO) in the United States. This comes after an unsuccessful attempt in 2022 following the collapse of FTX. The details of the offering are yet to be announced. Coinbase has also invested in the company.
PayPal's PYUSD stablecoin, launched in August 2023, has grown 70% in market capitalization to over $290 million in the last month. It's among the top ten stablecoin issuers but still small compared to Tether and Circle. PYUSD's adoption on centralized exchanges and integration into decentralized finance protocols is driving growth, and most expect it will continue to grow due to PayPal's large user base.
Will the IRS expansion impact the deficit? 🤡
Remember the enormous expansion in IRS staff that was supposed to reduce the deficit? A few days ago, the Biden Administration published a graphic boasting that the IRS had collected over $500 million in unpaid taxes from millionaires.
Interestingly, the administration lists several government social programs that could be paid for by the additional taxes, but paying down the deficit is not mentioned.
In other news, the national debt recently passed $34 trillion.
Watch what they do, not what they say.
If anyone still believed that deficits mattered to politicians, they can stop. Politicians don’t believe reducing the deficit is a winning issue because, by and large, voters don’t either. When discipline is lost, it is exceedingly hard to regain until real-world consequences prove its necessity.
Coin Center makes no apologies to Sen. Warren
Coin Center, a bitcoin and crypto advocacy group, rebutted Senator Elizabeth Warren's inquiries about hiring former government officials, challenging her allegations of undermining legislative efforts against bitcoin and crypto's use in terrorism financing.
In a must-read letter, Coin Center executive director Jerry Brito states that their opposition to Warren's proposed crypto regulations is a defense of constitutional rights and that the Senator's characterization is inappropriate.
Americans are drowning in debt 🌊
Americans are finding themselves more and more buried in debt. This isn't due to optimism or living beyond their means but rather the need to survive in a challenging economic climate marked by high living costs, job losses, and rising poverty. This historic surge in debt is reflected in record-high credit balances and the highest delinquency levels since 2012.
The data suggest a potential financial breaking point exacerbated by skyrocketing credit card interest rates. Unless Uncle Fed cuts the Federal Funds rate, of course. The markets expect this to happen in due time, raising the question of whether strong inflation will return in 2024.
HOW BITCOIN WORKS
Learn one key idea about bitcoin each week. This week:
Bitcoin is speculative (and so are dollars).
The launch of spot bitcoin ETFs has led many critics to once again label bitcoin with the pejorative "speculative" label.
However, this perspective fails to acknowledge the speculative nature of all forms of money, from the dollar to the euro or the peso.
Money serves as a medium of exchange, providing an efficient way for people to obtain goods and services compared to bartering.
The choice of a particular currency, however, is intrinsically speculative.
For instance, when someone opts to hold U.S. dollars over Argentine pesos, they speculate on two key aspects: the likelihood that vendors will accept dollars over pesos and the dollar's ability to maintain its value over time, ensuring sustained purchasing power.
This decision reflects a belief in the stability and widespread acceptance of the dollar, based on factors like economic strength, political stability, and historical performance. Holding a government currency is a bet on the issuing country's future economic prospects and its currency's continued relevance.
Bitcoin users engage in a similar form of speculation. When people choose to store wealth in bitcoin, they are betting on its utility as a medium of exchange and its ability to preserve value.
The motivation to use bitcoin over other currencies stems from a variety of places. For some, it's the ability of bitcoin to provide final settlement in low-trust environments. For others, it's the fact that bitcoin cannot be counterfeited or debased that make bitcoin a long-term store of value. Whatever the motivation, it all boils down to speculation – placing a bet that, in the future, bitcoin will continue to be desirable in exchange for goods and services.
The same logic holds true for dollars, euros, or other forms of money.
Labeling bitcoin as solely speculative ignores the broader reality that all forms of money are speculative. Understanding this concept is crucial in appreciating why individuals opt for different currencies, including bitcoin.
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.