BITCOIN BOX SCORE
Exchange Rate: $26,605
Market Capitalization: $518.6B
Hash Rate (90 days): 386.6 EH/s
Transactions (30 days): 15,012,656
Network Fees (day): 13 sat/vB
Bitcoin Dominance: 50.19%
"You confiscate a few billion dollars out of private bank accounts, and you print a couple trillion dollars, and all of a sudden, you know what happens? People start to worry. So out of this worry, we have something called the bitcoin," said anchor Jeff Cox on CNBC in 2013.
Fast forward ten years, and the United States added one trillion dollars to its national debt in 94 days.
The Fed's rate hikes have made the interest on servicing the debt costly, sending the United States into a debt spiral.
For context, federal debt was $30.7 trillion last year, with a $400 billion annual interest expense. One year later, it is $33 trillion, and the interest expense is $970B and growing.
Is there any way out? Politicians can cut spending to the bone and raise taxes dramatically, but as we know, such actions would end their political careers.
In fact, Congress can't even pass a bill to keep the government open. A shutdown is becoming likelier with each passing day.
The fiscal situation is officially out of control.
With that, let's dive into the news.
Elizabeth Warren has a new anti-crypto bill 🙄
Nine U.S. Senators, including eight Democrats and one independent, have signaled support for Elizabeth Warren's Digital Asset Anti-Money Laundering Act, aimed at tightening regulations on crypto transactions.
The bill seeks to address noncustodial digital wallets, extend the Bank Secrecy Act's responsibilities, and establish new compliance measures against the illicit use of digital currency. Warren warns of a potential "$50 billion crypto tax gap," emphasizing the government's continuous search for new tax revenue streams.
Is the "anti-crypto army" gaining power?
Warren is famous for ginning up bills that don't pass. Still, her real power lies in her ability to influence financial regulators. Should her regulator allies remain in control, the industry should expect more regulation.
Yet, as we have seen with the Grayscale case, courts can offer firms a reprieve from over-regulation.
Another government shutdown 🚪
As the deadline for federal funding approaches, a government shutdown seems increasingly probable, which would temporarily pause payments to government employees and affect some public services.
Lawmakers and their staff are concerned over a potential shutdown, but everyday Americans are accustomed to government dysfunction.
"We're not focused on a shutdown ... Nobody in my district is calling me about it," said U.S. Representative Chip Roy. Representative Michael Cloud stated, "For the vast majority of the American people, they're not nearly as scared as Washington, D.C."
Fed holds rates steady, anticipates a future hike 📈
The Federal Reserve's Federal Open Market Committee (FOMC) has decided to maintain its federal funds rate target range between 5.25% and 5.50%, leaving a possible rate hike by the end of 2023 on the table.
Although the rate of inflation has slowed, concerns about lack of growth and rising energy prices persist.
The Bank Term Funding Program (BTFP) that banks rely on to survive since this year’s banking crisis began, expires this March. How many banks would be able to continue operations should the Fed end the program is an open question.
Presidential hopefuls offer up bitcoin policy platforms 🇺🇸
Presidential candidate Vivek Ramaswamy announced this week that he was developing a "comprehensive crypto policy framework" and seeks feedback from the broader community, with full details to be unveiled by late November.
Addressing concerns over the approach of the SEC and other regulators, Ramaswamy criticized the "regulation via enforcement" model and highlighted his intentions to reduce federal bureaucracy if elected.
Throughout the campaign cycle, Ramaswamy, DeSantis, RFK Jr., and other candidates have made pronouncements about bitcoin, the Federal Reserve, and cryptocurrency regulations. You can expect more political positioning with respect to bitcoin and crypto, as its cultural importance to American life is indisputable.
BITCOIN ADOPTION CONTINUES
"OK I'm convinced. Let's do it. Switch all currency to Bitcoin or anything with a finite amount. No more money printing allowed," tweeted comedian Louis C.K.
Investor Mark Yusko stated on the Paul Barron Network, "I'll go further and say 1% seems more likely. That'd be $300 billion. $300 billion on a $100 billion of free float – price goes up a lot. A lot, a lot," regarding the amount of institutional money he thinks will flow into the bitcoin ETF space if spot ETFs are approved.
"Bitcoin as a global monetary network is scaling while its carbon impact declines. Few industries can claim this achievement," stated Bloomberg analyst Jamie Coutts.
HOW BITCOIN WORKS
Learn one key idea about bitcoin each week. This week:
Bitcoin is prudence.
In modern economics, prudence is a virtue often overshadowed by the lure of inflation-fueled growth and expansion. Undergirded by central bank interventions and manipulations, the fiat monetary system has enabled and encouraged rampant fiscal imprudence.
The ramifications of such debt accumulation are clear. The United States recently added one trillion dollars to its national debt within 94 days.
The rising interest paid on this debt, exacerbated by the Fed's rate hikes, has led the nation into a dangerous debt spiral.
At the heart of this fiscal debacle is the malleable nature of fiat money.
As Senator Ron Paul stated in 1983,
It's an ominous power. There is no other power greater than the power over money, the power to create and contract the money supply, the power to control the purchasing power of your money. Throughout history this has proven to be the most sought after monopolistic power of man.
And what have they done with this power? They have debased the money and stolen the purchasing power of middle and lower classes.
The recent record of $1 trillion in total U.S. credit card debt paints a vivid picture of a society burdened by inflation and conditioned to live beyond its means.
Bitcoin offers a prudent alternative. Its architecture, underpinned by a capped supply and a disinflationary supply schedule, starkly contrasts fiat.
When there's no central authority to print more money on a whim, both governments and individuals must act with financial restraint.
Bitcoin beckons a return to fiscal sanity. It's a reminder of a time when real resources anchored spending, not promises on paper.
As fiscal storms gather on the horizon, bitcoin will serve as a beacon of prudence in a debt-soaked world.
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.