BITCOIN BOX SCORE

Exchange Rate: $46,215

Market Capitalization: $905.5B

Hash Rate (90 days): 485.9 EH/s

Transactions (30 days): 15,741,545

Network Fees (day): 31 sat/vB

Bitcoin Dominance: 52.52%

What do these numbers mean?

Bitcoiners,

What a week. Today, over ten years after the first application for a spot bitcoin ETF was filed, shares began trading in U.S. financial markets. 

It has been almost exactly 15 years since Satoshi Nakamoto mined the Genesis Block, and now, the world's largest financial institutions have succeeded in "financializing" it and finding a route to the consumer mass market.

As of today, those who start their bitcoin can no longer be considered early adopters. However, bitcoin is still experiencing growth across many vectors. Bitwise, one of the ETF issuers, for example, is donating 10% of its profits to bitcoin open-source development.

While spot ETFs don't allow for bitcoin withdrawals, putting consumers at a disadvantage by not being able to use bitcoin as a digital bearer asset, they will serve as a starting point for many to begin their journey with bitcoin. Wall Street's marketing engine will heavily promote bitcoin, normalizing it in the eyes of the general public.

Innovative bitcoin companies will continue to create new products for consumers to use bitcoin as money. 

As of today, Wall Street has officially entered the arena. What’s next? Will more countries make bitcoin legal tender? Will central banks add it to their balance sheets? 

Such trends will impact bitcoin's short-term trajectory, but the cat is so far out of the bag that it is not possible to put it back in. Or, to use another apt metaphor, the financial industry just let a giant wooden horse inside its gates. What’s inside remains to be seen.

With that, let's dive into the news.

NEWS

Inflation rears its ugly head once again 👺

In December, U.S. consumer prices rose by 0.3%, exceeding the expected 0.2%, leading to an annual inflation rate of 3.4%, with the core CPI excluding food and energy also increasing by 0.3%. This rise was primarily driven by escalating shelter costs, contributing over half of the core CPI increase, despite expectations of declining inflation pressures and discussions of potential Federal Reserve rate cuts.

It isn't going away!

As economist Peter St. Onge noted on X, we are following a similar trajectory to that of the 1970s.

Gold and silver on the Texas primary ballot💰

In Texas, Republican primary voters are selecting candidates and voting on ballot propositions, including one to facilitate the use of gold and silver as legal tender through the Texas Bullion Depository. This reflects a growing grassroots movement towards monetary alternatives to the dollar, driven by concerns over inflation and stability. The proposition reads,

The Texas Legislature should establish authority within the Texas State Comptroller’s office to administer access to gold and silver through the Texas Bullion Depository for use as legal tender.

Is bitcoin next?

If the ballot proposition is successful, voters can push for State Bitcoin Depositories and legal tender status for bitcoin.

Which states did inflation hit hardest in 2022? 📉 

The Bureau of Economic Analysis released state and metro area inflation data for 2022. Inflation varied significantly across U.S. states, with New Hampshire experiencing the highest rate (11.8%) and Alaska the lowest (3.6%); state policies, such as land-use regulations, which affect housing costs (the largest component of CPI), influenced the variation. Economic growth (adjusted for inflation) was positive in only a few states like North Dakota and Alaska, demonstrating the economic impact of regulatory policies, tax burdens, and demographic trends at the state level.

Digging deeper

Pundits often speak as though inflation impacts everyone in the United States similarly. However, the effects vary based on individual consumption preferences and location.

And – as economist Ludwig von Mises stated in a 1958 lecture,

The most important thing to remember is that inflation is not an act of God; inflation is not a catastrophe of the elements or a disease that comes like the plague. Inflation is a policy — a deliberate policy of people who resort to inflation because they consider it to be a lesser evil than unemployment. But the fact is that, in the not very long run, inflation does not cure unemployment.

BITCOIN ADOPTION CONTINUES

PlebLab is hosting TopBuilder, a three-month hackathon focused on bitcoin and Lightning innovations, concluding with a final presentation in Austin, TX, and offering the winner a $15K bitcoin prize.

Cathie Wood, CEO of ARK Invest, has raised her prediction for bitcoin's price to $1.5 million by 2030, a 50% increase from her previous estimate, following the U.S. SEC's approval of spot ETFs.

VanEck, an investment management firm, has committed to donating 5% of profits from its potential Spot Exchange-Traded Fund (ETF) to support Core developers for over a decade, highlighting its long-term dedication to the ecosystem and the importance of fostering innovation and security.

Breez has introduced FiatLink, an open API standard designed to facilitate seamless integration of fiat to bitcoin exchanges within Lightning wallets and applications, addressing the lack of Lightning support by brokerages and the complexity of integrating multiple proprietary APIs, potentially streamlining and enhancing interoperability in the bitcoin transaction ecosystem.

Bitcoin spot exchange-traded funds (ETFs) launched impressively on January 11 with a trading volume of around $1.6 billion just minutes after the opening bell, following the U.S. Securities and Exchange Commission's approval.

Fedimint launched v 0.2.1, a significant milestone in developing the Fedimint open-source protocol, a Chaumian Mint built on top of bitcoin, offering a stable, backward-compatible foundation for future innovations in privacy, efficiency, and interoperability with the Lightning Network.

HOW BITCOIN WORKS

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

Bitcoin is a digital bearer asset.

Since today marks the first trading day for spot bitcoin ETFs, it is important to remember that bitcoin is a digital bearer asset. Bitcoin is unique in this respect, unlike digital dollars representing a claim to an underlying asset and holding value based on collective trust. Bitcoin ownership encompasses possessing a private key, granting the holder direct and complete control.

Historically, bearer assets, such as company shares or banknotes redeemable for gold, were physical certificates allowing the holder to claim a fixed amount of another asset upon demand. These assets did not require registration of ownership; possession alone was proof.

Digital fiat currency (online bank account numbers) lacks bearer asset qualities. These digital dollars exist under third-party control, such as banks or payment services like PayPal, introducing risks like account freezes or limitations on access.

Enter bitcoin, the revolutionary digital bearer asset. Before bitcoin, digital transactions invariably involved third-party institutions. Bitcoin transcends this model, functioning similarly to traditional bearer assets but in a digital form. Ownership is independent of any institution and determined by knowledge of a private key. This enables bitcoin transfers without intermediaries, mirroring the direct transfer of physical bearer assets.

Bitcoin's status as a digital bearer asset offers autonomy in the digital age. It allows for transactions without the need for institutional trust, free from the constraints of working hours, account freezes, or unauthorized access to funds.

Moreover, bitcoin's open-source nature facilitates continuous auditing and the development of innovative custody solutions, like physical bearer instruments and multi-signature custody, blending the best aspects of physical and digital monies. These revolutionary features position bitcoin as a powerful tool in today's world and a foundational element for the future of financial transactions.

COIN CHECK

When was the first bitcoin ETF application filed?

1. July 1, 2013

2. January 3rd, 2009

3. July 15th, 2013

4. March 4th, 2015

Check your answer at the end of the page.

FROM THE MEME POOL

Follow us on Twitter for more fresh content

BITCOIN ROUNDUP PODCAST

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

ANSWER

1. July 1, 2013

In 2013, Gemini founders Cameron and Tyler Winklevoss filed for the Winklevoss Bitcoin Trust, a proposed Bitcoin ETF, which was ultimately rejected twice, including a second attempt in 2018.

Was this email forwarded to you? Sign up here.