🌟💋 Sound Money, Sorry Not Sorry

Bitcoin's rally continues, rising above $30,000 for the first time since June 2022.

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Dave Birnbaum & David Waugh
April 13, 2023

Bitcoiners,

The US Consumer Price Index (CPI) for March 2023 rose 0.1% month-over-month, beating the forecasted 0.2% increase, while core CPI increased 0.4%. 

CPI categories seeing significant increases between February and March were car insurance, airfare, household furnishings, and new vehicles. Notable declines occurred in used cars and trucks, and medical care.

Inflation remains sticky, and markets expect the Fed to increase its target rate by 25 basis points in May.

However, the future path of monetary policy remains uncertain due to persistent inflation, financial stability concerns, and signs of an economic slowdown. 

Further, bank failures worsen funding challenges for commercial real estate (CRE) developers. The maturity wall (maturing CRE loans) and risk of default could lead to a cycle of forced property sales and bank failures, reducing property values.

Bitcoin's rally continues, rising above $30,000 for the first time since June 2022.

With that, let's dive into this week's news.

NEWS

New York Times attacks bitcoin mining

The recent New York Times article "The Real World Costs of the Digital Race for Bitcoin" paints bitcoin mining as an exploitative and environmentally dangerous industry. However, the article's claims are grossly inaccurate. Bitcoin miners were not responsible for the Texas power outages during Winter Storm Uri, and demand response programs in which they participate are not exclusive to them. 

The article's data is misleading and fail to account for the unique challenges faced by an electrical grid with high levels of renewable energy. In reality, the industry is valuable in improving grid resilience and reducing carbon emissions.

And, in case you missed it – see Riot Platform's VP of Research Pierre Rochard's (now viral) video responding to the NYT's claims.

Bitcoin rises above $30,000

Bitcoin's price surpassed $30,000 for the first time in months this week, as other "risk on" assets such as gold also climbed. Bitcoin's dominance ratio, the ratio of its market capitalization to the cumulative market capitalization of all cryptocurrencies, has also risen.

The insider scoop:

There are many reasons bitcoin's price could be rising. Some analysts attribute it to "The Fed Pause Rally" or how some equities and other "risk on" assets like bitcoin respond to the Fed pausing its rate hikes. 

Either way, there is no time like the present to dollar-cost-average into the most advanced form of money ever invented.

Is Paul Krugman okay?

Our favorite non-economist, Paul Krugman, shocked many with the latest installment of his weekly New York Times column (are you noticing a pattern yet?), titled "The Weird New War on 'Woke' Money."

Throughout the piece, Krugman disparages anyone holding reservations about Central Bank Digital Currencies and consumer privacy. Curiously, Krugman links to a Federal Reserve paper that explicitly mentions consumer privacy as a risk for CBDCs in attempt to support his underlying claims. You can't make this stuff up!

BITCOIN ADOPTION CONTINUES

Twitter adds bitcoin investing option via a new partnership with eToro.

HOW BITCOIN WORKS

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

Bitcoin is unapologetic

This week, onlookers watched Riot Blockchain VP of Research Pierre Rochard go toe-to-toe with the New York Times on Twitter regarding bitcoin's energy use.

Curiously, bitcoiners always seem to be playing defense when it comes to bitcoin's energy use. 

Mainstream media, pundits, and government officials howl about the energy consumption of bitcoin mining, mounting attacks via interviews, press releases, and regulatory action.

At the same time, bitcoin uses less than 1% of global electricity production, a minuscule amount compared to many industries, businesses, luxurious pursuits, and even consumer appliances. 

Why do elites, rather than focus on pressing issues like inflation, and political instability, spend their limited time and attention on attacking bitcoin?

It comes down to this: they can't control it. Bitcoin is unapologetically uncontrollable – it is a decentralized, robust monetary network that those in charge can't shape to their will or siphon wealth from.

In this way, bitcoin breaks preconceived notions of power and control. There is no "manager" to call, and no CEO to drag before congress. 

Further, bitcoin is also very popular, and that popularity is threatening. With de-dollarization being discussed as a more serious possibility than it has ever been before, bitcoin stands out as a meaningful alternative.

Thus the dogged effort to conjure fear and vitriol about bitcoin's energy use. 

As H.L. Mencken stated years ago, "The urge to save humanity is almost always only a false-face for the urge to rule it. Power is what all messiahs really seek: not the chance to serve." 

So, what's more threatening: bitcoin, or its detractors?

You already know the answer.

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COIN CHECK

What does BIP stand for?

  1. Bitwise Inverted Polynomial

  2. Bitcoin Investment Portfolio

  3. Bitcoin Improvement Proposal

  4. Bitcoin Initial Public offering

Check your answer at the end of the page.

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BITCOIN ROUNDUP PODCAST

If you love our newsletter, you’ll love our podcast, too.

ANSWER

  1. Bitcoin Improvement Proposal

    A BIP is a Bitcoin Improvement Proposal, which is a technical document used to propose new features or changes to the Bitcoin protocol.

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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