Exchange Rate $81,307 | Block height 971794

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For years, a common criticism of bitcoin was that it depended on cheap money and would struggle once borrowing got expensive.

Well, borrowing got expensive. The 10-year Treasury yield is hovering around 5%, and the Fed raised rates earlier this year. This week brought plenty of other concerns for investors. U.S. officials reportedly drew up plans to use the MOAB, America's largest non-nuclear bomb, against Iran's nuclear sites under Pickaxe Mountain. Ukraine's President Zelenskyy declared "We're done" with Trump's energy truce, and drones set a Russian refinery on fire the same day. The AI trade also came under pressure as CoreWeave hit a one-year low, and South Korea's Kospi fell about 20% in seven sessions.

Bitcoin ended the week about 3% lower, back above $81,000 after one brief dip below $80,000. Grayscale says bitcoin's one-year volatility has fallen to 43%, lower than about one in five S&P 500 stocks.

That relative stability challenges the idea that bitcoin depends on cheap money. Rates remain high, a wider war is now more likely, and other markets have fallen sharply. One interpretation is that much of the selling has already happened, leaving the market coiled as investors wait for greater clarity.

Bitcoin's appeal as a neutral, fixed-supply asset extends beyond the interest-rate cycle. Over time, events like these give people more reasons to consider storing their wealth in the best form of money ever invented.

On Wednesday, the Office of the Comptroller of the Currency released its review of the nine largest national banks: JPMorgan Chase, Bank of America, Citibank, Wells Fargo, U.S. Bank, Capital One, PNC, TD and BMO. All nine had policies between 2020 and September 2025 that restricted service to lawful businesses, with digital asset companies grouped alongside firearms, oil and gas, and tobacco.

A day earlier, Treasury fined Bank of America $1.2 billion, the third-largest penalty in its history, after the bank admitted it "willfully violated" the Bank Secrecy Act, the same anti-money-laundering law cited to keep bitcoin companies out. Bank of America earned $8.1 billion in the third quarter. Silvergate, one of the few banks that served the industry, wound down in 2023. Last month, its former CEO Alan Lane wrote that it did so "in the face of political pressure from the Biden Administration" after paying out a run on 70% of its deposits.

Bank of America paid a fine worth less than one quarter's profit and continued operating. Silvergate, which served bitcoin businesses, is gone.

On Saturday, Ledger confirmed an unauthorized hardware implant inside a device bought from CryptoBilis, a reseller operating in Malaysia, Indonesia and the Philippines, whose customers reported drained wallets on Oct 9. Investigator Specter estimates more than $86 million was taken, and Bitquery's tally is $102 million from 324 wallets, about $16.8 million of it in bitcoin. Ledger hasn't confirmed either figure. 

On Thursday, Ledger blamed a "highly organized criminal group" that bought its devices, implanted them and returned them to resellers. It suspended sales in Hong Kong and six Southeast Asian markets and banned resale of returned units, "even if the packaging looks unopened."

The attack targeted wallet hardware before it reached buyers. Buy directly from the manufacturer and generate your own recovery phrase. If you cannot trust a device, move your funds to a trusted new one with a new recovery phrase.

On Thursday, MSCI announced that "non-operating companies," those without substantial operating assets, will no longer be eligible for its global indexes, which index funds around the world track. Strategy and Metaplanet already met the removal criteria in MSCI's earlier simulation. The affected list comes out Nov. 11, and any removals take effect Nov. 30. Strategy shares fell about 4% after hours.

A committee can decide a company holding bitcoin doesn't belong in its benchmark, but physical bitcoin and the people who exchange it with each other remain unaffected. Until more people understand the value of digital hard money and stop settling for financial products that function as bitcoin proxies, these kinds of games will continue.

Charles Schwab CEO Rick Wurster said Thursday that "all clients can now access Schwab Crypto," completing a rollout that began in May. Schwab has about 40 million active brokerage accounts and more than $13 trillion in client assets. Customers in 48 states (not New York or Louisiana) can buy bitcoin directly for a 0.75% fee per trade, with Paxos holding the coins as sub-custodian. Withdrawals to outside bitcoin wallets are now live. The crypto isn't covered by SIPC or FDIC insurance.

On Wednesday, Standard Chartered began letting affluent UAE clients buy bitcoin straight from their existing bank accounts. It's the first time the bank has offered this to wealthy individual clients anywhere, and it says no other international bank does so in the UAE.

For tens of millions of people, buying bitcoin no longer means opening a new account anywhere. Just remember that a coin someone else holds is a promise, so once you own it, withdraw it to a wallet you control.

South Korea's Jeonbuk Bank became the country's first bank to lend against bitcoin. It offers won loans to companies, and bitcoin is the only collateral it accepts.

Deutsche Bank is reportedly weeks away from launching bitcoin custody, with an expansion into Asia planned for 2027.

Strategy bought 250 more bitcoins at about $86,194 each, bringing its holdings to 848,250.

Metaplanet, Japan's largest corporate holder with 44,000 bitcoins, is raising about $329 million in zero-coupon convertible bonds to pay down its bitcoin-backed loans and buy back shares.

Kraken's parent company Payward won full approval from Dubai's Virtual Assets Regulatory Authority, so UAE customers can now buy bitcoin with dirhams.

Lightning Labs unveiled LayerTree, a design that would let a million or more users share a single bitcoin output while each keeps full control of their funds. It needs upgrades to the bitcoin protocol that have yet to take place.

University researchers built the first full post-quantum security design for the Lightning Network, layering NIST-standard quantum-resistant cryptography on top of the existing protections.

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

In his foreword to the 2020 edition of The Sovereign Individual, Peter Thiel described a contrast between AI and strong cryptography. Artificial intelligence "could theoretically make it possible to centrally control an entire economy," while strong cryptography "holds out the prospect of a decentralized and individualized world." His shorthand: "If AI is communist, crypto is libertarian."

Both fields now face a related legal question, which a new paper from the DeFi Education Fund by Amanda Tuminelli and Gavin Zavatone lays out thusly: is writing software a form of speech, or can the author be held responsible for what other people do with it?

In fact, this isn’t a new issue. The debate over software and free speech dates to the 1990s. Back then, the U.S. government classified strong encryption as a munition regulated under the same arms-export rules as missiles. When Phil Zimmermann released PGP email-encryption software in 1991, he spent about 3 years under criminal investigation for “exporting a weapon.” His response was to print the source code as a book, since books were clearly protected speech. The case was dropped in 1996.

A Berkeley graduate student, Daniel Bernstein, went further. He wanted to publish his encryption software, and the government said he needed an arms-export license to do it. With the Electronic Frontier Foundation, he sued, and in 1999 a federal appeals court ruled that software source code is speech protected by the First Amendment. The export rules were loosened the next year.

That victory, often summed up as "code is speech," helped establish the conditions in which bitcoin could be developed. People whose work contributed to bitcoin were involved in those earlier debates. Bitcoin itself is open-source code anyone can read, copy and run.

The question today is narrower: does code that moves money make its author a financial institution? A proposed law called the Blockchain Regulatory Certainty Act would say no, as long as the developer never controls anyone's funds. Law enforcement groups have pushed back, and the developers of the Samourai privacy wallet went to prison after pleading guilty to running an unlicensed money-transmitting business. Similar questions have arisen in AI. California's SB 1047, vetoed in 2024, would have made developers of large AI models answer for "foreseeable downstream misuse."

The legal protections established in the 1990s helped make bitcoin possible. The debate over AI is bringing questions about software and its authors' responsibilities back into focus.

In the 1990s, the U.S. government regulated strong encryption software under the same export rules as what?

A. Prescription drugs
B. Weapons
C. Nuclear materials
D. Gold

Check your answer at the end of the page.

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Answer: B. Washington classified strong encryption as a munition under the same arms-export rules as missiles. That's why Daniel Bernstein needed an arms-export license just to publish his encryption program until a federal appeals court ruled in 1999 that source code is speech protected by the First Amendment. The cypherpunks won that round, and bitcoin was built on the result. Lucky for you, no license is needed to read this newsletter!

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