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BITCOIN BOX SCORE

Exchange Rate: $56,050
Market Capitalization: $1.11T
Hash Rate (90 days): 614.9 EH/s
Transactions (30 days): 18,865.089
Network Fees (economy): 3 sat/vB
Bitcoin Dominance: 57.39%

What do these numbers mean?

Traditional finance is hungry to enter the world of bitcoin. If you have any doubt about this, see the video below featuring Cantor Fitzgerald CEO Howard Lutnick:

Lutnick's statement (alongside general institutional and retail investor appetite) confirms the desire for bitcoin as a store of value. Yet the effects of mass adoption will also change how many firms operate. Which industries will be most impacted?

One industry in which bitcoin is already and will continue to change is investment management.

For example, investment managers use a hurdle rate, or the minimum return they expect from an investment, to help determine whether pursuing it would be worthwhile. U.S. Treasuries commonly serve as a low benchmark for these rates, but there is variation from investor to investor.

As Jessie Myer's outlines in his excellent article Bitcoin Wrecks Your Hurdle Rate, a typical array of hurdle rates would be 4.3% for treasuries, 8% for stocks, 10% for real estate, 15% for private equity, and 25% for venture capital.

However, bitcoin’s unique mechanics – especially its absolute scarcity – give it the characteristics of a low-risk asset with the potential for significantly higher returns than treasuries. As a result, bitcoin’s expected returns may well become the new benchmark, or hurdle rate. This would force capital allocators to reevaluate their usual frameworks. They would now need to measure every investment against an alternative of holding bitcoin.

This is just one example of how bitcoin will transform the world, but one thing is clear: it is here to stay.

NEWS

🤮 Trump launches crypto project

Donald Trump and his sons are launching World Liberty Financial, a crypto project tied to Dough Finance, which was hacked for $2 million in July. Four key team members from World Liberty Financial were involved with Dough Finance, raising concerns about the project's security. The project will feature a decentralized borrowing and lending platform on Ethereum and introduce a governance token, WLFI, with transfer restrictions that could limit its tradability.

Wrong idea, wrong time, wrong everything.

No one is excited about this Trump family venture besides his sons. The entire project reeks of grift and scam and will not result in anything positive besides giving mainstream media ammunition to attack the only pro-bitcoin candidate and tar the industry with guilt by association.

Business bitcoin adoption grows 30%

According to a new report by River, businesses now hold 3.3% of bitcoin's total supply, equating to 683,332 bitcoins as of August 2024, a 30% increase over the past year. U.S. companies account for nearly half of these holdings, with five firms – MicroStrategy, Block.one, Tether, BitMEX, and Xapo – controlling 82% of all business bitcoin. The number of publicly traded companies holding bitcoin grew by 40% from 2023 to 2024, with further growth expected.

Financial privacy increasingly threatened

As Jennifer Schulp outlines in The Hill, financial privacy in the U.S. is increasingly under threat, with laws like the Bank Secrecy Act and systems like the Consolidated Audit Trail by the Securities and Exchange Commission (SEC).

Central Bank Digital Currencies (CBDCs) could take this even further by allowing the government fine-grained control over individuals' financial activities.

Of note, though the 2024 GOP platform states it will "ensure that every American has the right to…transact free from Government Surveillance and Control," the Democratic platform makes no mention of financial privacy.

The beatings will continue until morale improves

And it wouldn’t be a regular week without an Operation Chokepoint 2.0 enforcement action leveled against a bitcoin and crypto-friendly bank.

As usual, Caitlin Long has the receipts:

With so many nonsensical economic policies advocated by members of this administration, you have to think they’ll realize this will all catch up to them. Or will they?

BITCOIN ADOPTION CONTINUES

A solo bitcoin miner successfully mined block 858,978, earning a reward of $199,098.

A scientific paper titled An integrated landfill gas-to-energy and Bitcoin mining framework argues that bitcoin mining can reduce methane emissions by using landfill gas-to-energy systems, providing a scalable solution without government incentives.

Switzerland's fourth-largest bank, ZKB, has launched bitcoin trading and custody services, reflecting growing institutional support.

The bitcoin network's hashrate hit a new all-time high of 746 EH/s on September 3rd, reflecting strong network security and long-term investment in bitcoin infrastructure.

ETC Group analysts suggest that looser Fed policy and global macro trends signal a bullish outlook for bitcoin, with easing monetary policy expected to boost the dollar-exchange rate.

HOW BITCOIN WORKS

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

The Layered Money framework

In his book Layered Money, Nik Bhatia presents a framework for understanding the evolution of money through a layered hierarchy.

Bhatia explains that, historically, economies operated on a layered pyramid like structure where the top layer consisted of the form of money that is nobody’s liability – often gold. Lower layers represented various liabilities against base money, such as bank notes and deposits. This layering helps explain how modern monetary systems, which have become increasingly abstract and complex, are structured.

In the past, gold served as the top layer of money because it was free from counterparty risk. Lower layers, like paper money or bank deposits, were promises to redeem the upper-layer money. U.S. Treasury bills and bonds replaced gold at the top as the world shifted to a dollar-based system. Bhatia explains how bitcoin, which, like gold, is nobody’s liability, has formed the basis for a second money pyramid completely outside the current system.

The layered money framework reveals how our current system relies on trust in issuers like central banks and commercial banks and how bitcoin, as an immutable and decentralized currency, can function at the highest level of the monetary hierarchy. This structure helps explain the increasing role bitcoin could play in a future, more stable financial system.

On The Bitcoin Standard Podcast, our own Dave Birnbaum talks about how Coinbits.app is using bitcoin to build an innovative operating system for money. Listen now: Spotify | YouTube | Apple | Fountain

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COIN CHECK

Which modern nation was the first to formally adopt a gold standard?

1. United Kingdom

2. Netherlands

3. France

4. Germany

Check your answer at the end of the page.

FROM THE MEME POOL

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ANSWER

1. United Kingdom. See this article for an in-depth overview of the gold standard’s history.

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