On The Brink with Castle Island - Weekly Roundup 03/25/22 (Terra buying BTC, a new ETF timeline, Russia accepting BTC for energy?) (EP. 301)

Episode Date: March 25, 2022

Matt and Nic return for more deals and news. In this episode:  Brink Nation is officially moving to GM.xyz Did blockchains 2.0 make fundamental scaling improvements? Is ESG over? Nic surrenders his eyeball sovereignty to Clear A secret trick to get through the Miami airport Bloomberg analysts think a spot ETF could be approved summer 2023... pending SEC developments Would the SEC have to gain control over crypto exchanges to approve an ETF? Florida will accept corporate taxes in BTC Terra is buying up to $10b in Bitcoin Will seigniorage shares stablecoins ever work? The USD is the unit of account for 99% of all stablecoins Are the Democrats fracturing along crypto lines? Russia mentions accepting Bitcoin for energy payments The NYT repeats the misleading per-transaction energy cost analysis Sponsor notes: Fireblocks is an enterprise-grade platform delivering a secure infrastructure for moving, storing, and issuing digital assets. Learn more at fireblocks.com Subscribe to the Coin Metrics State of the Network newsletter

Welcome to On the Brink. I'm Matt Walsh. And I'm Nick Carter. In this episode is brought to you by Fireblocks and Coin Metrics. More on those companies later in the episode. Today's Metrics Minute is brought to you by Coin Metrics. We share a little tidbit from their weekly research newsletter, state of the network, every week. With over 10 million in Ethereum deposited, roughly 9% of all ETH supply is now locked in the staking contract, and nearly 25% of all. staked ETH is in Lido finance. The supply of Lido's STEth is now over 2.5 million, rising from 2 million at the beginning of March. The other metric for this week is adjusted transfer volume. This is the methodology that coin metrics uses to denoise the gross transaction volume on the blockchain. In 2021, Bitcoin came in first with 4.7 trillion adjusted, Ethereum stomping on its heels with 3.6 trillion,

tether and third 1.9. This has been the Coin Metrics Metrics Minute. Be sure to follow them on their substack state of the network. Good new bit. Coin Metrics Metrics Minute. I like that. Isn't that great? You're sounding pretty ill, if we're going to be honest.

You're not sounding great. This is my Jordan flu game. I've got a fever, a nere ink, a sinus infection. I've got everything. The only thing I don't have right now is COVID. I think this is probably the sickest you've ever been recording an episode. I just, is this sickest I've been in like 15 years, I think. But I power through. See, that's the thing. You do the podcast every week. You have obligations. You got to read the

metrics minute. Got to read the ads. We can't take a week off. No, we can't take a week off. You know, I did get some help with, we have a new intern, and he helped me with the newsletter this week. So really good, really good job by him. So we love our new intern. However, he is not ascended to the level of CMS in turn in terms of making great memes. No. No. But I bet he could figure it out. I was trying to figure out a meme last night.

It's hard to come up with a meme on your phone. You know, there should be like a software system on your phone to come up with a meme. Is there? Does that exist? That definitely, definitely, definitely exists. I make my memes on Adobe Photoshop. Oh. The only finest meme making software because, you know, sometimes you have to really get in the weeds

do some sophisticated cropping. I had an idea for a meme last night that was going to compare private blockchain people to central bank digital currency people, but I just didn't have the ability to bring it to life. I think you leave the memes to the younger members of Siv. Yeah. And we'll take care of those. All right. So I'll just text you my ideas and you can make memes out of them.

So we have a new community for On the Brink. Brink Nation has found a home after three years in the wilderness. Let's talk about it. Let's talk about it. We are partnering with our good friends and portfolio company, GM.xyZ, and we have built a community there. So I would encourage everyone to go to GM.xyZ forward slash C, forward slash on the brink, and check it out. There's a lot of good banter there. Yeah, so there's actually a coin metrics.

Well, I guess subreddit is in the right word. Sub GM. There's a coin metric subGM. and there's a Brink Nation 1. C slash on the brink. There's 48 members. Will the first 100 members get air dropped, you know, an exclusive Pohap or digital trinket? Perhaps.

Wow. Perhaps. I can't promise anything. Just I can't promise anything. Careful of highway there. Yeah. No expectation of profit. Just the expectation of maybe a digital trinket.

48 people, though, found it. pretty quick. And we hadn't talked about it on the podcast. We didn't promote it. We didn't even tweet about it. But get on there. GM is the best Web 3 social site out there. And the interesting thing is it does keep track of sort of your not karma, I guess I'm thinking you read at terms, but your rep. Yeah. Reputation. I'm leading. I'm leading in rep right now. Yeah, I don't know what's going on there because you're not really known as a big time poster. I put one up about there were these turkey attacks in Wisconsin and Wauwatosa and that's got a lot of engagement. So I'd encourage everyone to go to, if you want to see more about the turkeys, go to gm.xyz

4 slash C, forward slash on the brink. First post is about turkey attacks in Wisconsin. Yeah. And, you know, look, I don't know what theirdrop future looks like here, but probably if you earn a lot of rep on our subreddit sub-GM. I don't know, maybe you'll get a shout-out or we'll let you recommend guests. Oh, recommend guests. I like that. Yeah. That's like a non-financial incentive. I like that. Exactly. Exactly. That's not worth anything financial terms. So anyway, get on gm.g.g.g. Brank Nation, that's the official home. We didn't really have a home.

We sort of put these things on Twitter, but we didn't have anywhere to discuss the episodes. And we'll be going on there every week to discuss. So there's a new thread for every episode, actually. And if you have cool NFTs, you can use the GM as the NFT gallery. You can. So it's a busy podcast week. Speaking of engagement, a lot of chatter on the GM site. So we had Nick White sat down with Ria and Nick White from Celestial Labs talking about the new Layer 1 network that is Celestia.

So that was a great episode. And I don't embarrass Ria, but I will. clue you guys in on something. She lost her own audio after doing that episode. So she had to go back and re-record all of her bits as if it was, she was still having the conversation. Yeah, that's brutal. Props to Ria for doing that because that's, I've done that once actually as well. It's pretty much the worst thing. Yeah. Yeah. Going back and feigning that you're having conversation doing basically voice acting. Yeah, that's tough. So anyway, shout out Ria for doing that. But yeah,

did turn out really well, I thought. It was a very fascinating conversation, basically about why, you know, the blockchain's two point of the world did not actually make fundamental scaling improvements. And I think that's a pretty contrarian view, actually, in the crypto space. I align with that view. Yeah. You know, I don't believe that there have been any fundamental new developments in scaling to date in terms of the fundamental logic of blockchains. And then Sean sat down with John Burnbaum. John is the CEO of Domain Money, which is a new platform. Really exciting company.

They have crypto on platform. They also have real world stonks, actively managed strategies. So that was a fun one. John was formerly the head of crypto at SoFi. So great to have him on the pod finally. And then I wrote kind of a bit of an angry editorial in CoinDast this week. they asked me to write something for the mining week and so I wrote about the only thing

that I know how to write about. Crypto mining, the energy crisis, and the end of ESG. I don't think, I don't know if it's the end of ESG, but... Yeah, so I did declare... I don't think it's over. I took the liberty of declaring ESG over.

So yeah, it's over, by the way. It's officially over. It might have taken some lumps. You know, if you're in Germany right now, you're just like, what did we just do for the, past 10 years. I mean, yeah, the reckoning in Germany, it's interesting because the green party in Germany is now reconsidering everything. But weirdly, they're not actually undoing their anti-nuclear

stance. So they're still anti-nuclear, but they're importing more fossil fuels than ever. The cost of energy has gone up. Certainly hasn't worked out the way that they would have liked. Now, I mean, this anti-nuclear thing just doesn't make a ton of sense to me. one's truly baffling because then you do have to import more fossil fuels. And, you know, the thing that people don't know about really is that the more renewables you have on the grid, the more you need these fast following thermal sources of generation in order to help stabilize the grid. So it doesn't actually necessarily decarbonize the grid that much or free you from your dependence on fossil. Nuclear, however, provides baseload, which is,

is very, very handy. Right. We have a staggering amount of deals this week. Staggering. Might be an all-time record. You know, we entrusted the deal section to our new intern, and he totally killed it, and turns out there's just so many deals. He just found a lot of deals. Maybe there's that many deals every week, and I just don't find them. Yeah. Have we just been reading out only one third of the relevant deals each week? It's possible. I mean, he was calling people up saying, did you do a deal this week? can I write about it? He really surfaced a lot of things. Well, let's start with a big one.

Yuga Labs, the company behind BoredApe Yacht Club, Mutinate Yacht Club, and now Cryptopunks and Mibutts. They bought Cryptopunks. They own Cryptopunks. They raised $450 million in a round led by Andreessen. Huge round. Yuga clearly the largest, well, I suppose maybe behind OpenCade, but the largest sort of issuer of NFTs at the corporate level.

And now if you own a Cryptopunk, you own that IP. So that was a big deal with that transaction. So board apes buying crypto punks and just freeing the punks, basically. Yeah, that's right. That is true. Unleashing them from the IP perspective. Not clear what ape or punk owners will do with their IP. Certainly I see people creating content with their apes.

I do see that. Yeah. I mean, wasn't that the big thing that G money was preventing? from doing a commercial or something with his punk? They also launched ape coin. We didn't mention that. But there was a very significant coin launch. Apecoin that was immediately traded on basically all the exchanges.

Next one up is Katie Hahn's new fund. So she has raised $1.5 billion for her new firm. The name of the firm is Hahn Ventures. So 500 of that will be for an early stage fund and $1 billion for a later stage fund. So congrats to Katie. And this is the biggest solo GP venture fund ever. Is it really? First time solo GP.

Wow. And obviously not to mention the biggest female solo GP venture firm. So congrats to Katie. That's awesome. Next one up is a strategic deal. So FTX is investing $100 million in Dave, which is a publicly traded banking app. And the play here looks like FtX is going out and trying to do a bunch of white labor. deals with fintechs and so they will be introducing digital asset payments on the dave platform and

essentially looks like they'll be the back end here for dave so congrats to ftx and dave then we've got everyone's favorite cryptocurrency world coin which is the one that you get by scanning your retina they raise 100 million from and horowitz coastal ventures and others and uh yeah there's going to be here of people that just go to funeral homes to get eyes to catch more Worldcoins. It's bad. It's some bad dynamics, bad incentives with WorldCoin. I'm sure they've thought about this, but what about like a machine learning model that creates auto-gan eyeballs that, you know, it's like how you can create images of people's

faces that aren't real. Oh, yeah. But look, right? They look pretty much photo realistic. What about that with eyeballs? Well, like, would a dog eyeball work? Like, if you had a dog, could you get WorldCoin? I'm guessing that the team has probably thought about this.

All right. I'm just offering that. Just try to work out that edge case. Yeah, I think we might see, you know, an arms race between, like, AI. Because now you get paid if you are a sufficiently convincing AI model, you get your air drop. So it's like an AI-based civil attack. Yeah. On the orb.

That's exactly what it is. Well, we'll see. I am dying for our WorldCoin episode. Well, so actually on the topic of WorldCoin, so I recently made a purchase, which was retina-based, which was the greatest purchase of my entire life. What is it? Clear. I don't know if you're a clear user. I wouldn't have figured you for a clear user. I'm not a clear user. I am TSA-Pree, though. So I surrendered my eyeball sovereignty, and I bought Clear. The Miami Airport. is chaos these days.

Yeah. I don't know if you've been through it recently. It's two to three hours to get through security. They actually had their number one travel day in literal history last Sunday. And so clear, you just shoot right through? Yeah. So there's the trick to getting through the Miami airport, which is you have to walk all the way to the end.

There's like an abandoned area almost where no one's kind of aware of it. And there's a clear installation you can get through. No one knows about the fact that there's clearly. clear. So it's a secret. Wow. So honestly, I shouldn't be telling you guys this because this is my alpha for getting through the airport. You can get through in five minutes. And even TSA pre, that line gets filled up. Can you go sign up and get right through? You can. So it's only five minutes. Wow. So, I mean, having been through many times last month, it saved me dozens of hours. It's the greatest purchase ever made in my life. Shout out clear. Never thought I'd say this. But, you know,

I'm glad that they have my retinas. Wow. Are you going to become like a CBDC guy after this too? It's just like when a product saves you that much time, I don't care what they do to you, what it costs, whether it costs of your soul. It's just so worth it. Wow.

All right. Clear. Hopefully they come and sponsor the podcast. That was the ringing endorsement. I know. I know. I wasn't even paid to say that. That's crazy.

All right. Let's hop back into some deals. Next one up is fan crazy. this is an NFT marketplace. It's focused on cricket. Cricket collectibles. So they raised $100 million from B Capital, Insight, Marai, Cristiano, Ronaldo, and others.

Cricket, I've always wanted to try cricket. Like the game of cricket? Yeah. Like, I was decent at baseball, so I feel like I could probably play some cricket. I would say very different sport. I think it's like hockey and baseball. It looks like a combination.

Well, I'm just shocked that Christiana Ronaldo is I didn't, he didn't strike me as a cricket fan. I don't think cricket's very big in Portugal. I think he's one of the biggest sports in the world though. That's true. I mean, very popular in India and Pakistan, no question. Cricket is a great game. It just has very little in common with baseball, I would say.

Yeah, I think you just hit a ball with a stick. It's pretty similar. Yeah. Next up we have Joyride. Web 3 mobile game development platform. They raised 14 million from Coinbase Ventures, Anamoka Brands, Salonaventras, Dopper Labs, and others. Next one up is Coin Books. This is an accounting software platform catered towards Dow's. They raised $3.2 million from Y Combinator and Multi-Coin and the founders of Polygon.

Then we've got coin routes and algorithmic trading platform for digital assets. They raised $16 million from Aon Capital, Susquehanna International, Galaxy Digital, and others. Next up is the tie. This is a digital asset data provider. They raised $9 million from Blizzard, Gemini, Golden Tree, Hudson River trading and Nidig. So congrats to Josh Frank and the team at the tie. Next up, blockchain.com has acquired Autonomies ODC Trading Desk, for an unclosed sum. Some more M&A there. That's good to see. Next is Upshot. This is a protocol for NFT appraisals. They raised $22 million from polychain, coin fund, blockchain capital, Delphi, and Framework. Then we've got Ribbon Finance, very popular protocol for, I guess, structured products on defy, I would say. So automated, you know, options writing strategies. There is 8.8 million from

paradigm. Next up is a new fund. So this is a former polychain partner, Tiken Salami. He is raising $125 million for a new firm called Dow 5. And this is a fund that will eventually be converted into a Dow. Then we've got Akala and a group of 30 venture firms. They committed $250 million to form the lowercase A, uppercase U.S.D ecosystem fund, which will support projects and Pocodot's DFI ecosystem ecosystem. Got to love those ecosystem funds. Next up is Qualcomm.

So they're committing $100 million to a fund that will invest in Metaverse infrastructure. Qualcomm, getting in the mix, huh? Then we have another joy related. So we previously had Joy Ride. Now we have Joy Stream. No relation. An NFT-oriented content monetization platform, they raised 5.85 million from D1 Ventures, defy lines, hypersphere, DCG, and others.

Next is Nexo. They raised $150 million to form Nexo ventures, which will focus on Web 3, Defi, and Digital Asset Infrastructure. And I swear we're getting to the... the end of the deals. We've got Red Door Digital, a Web3 game developer. They raised 5 million from M6, Shiva, Maven, and others. And the last one is Archway. This is a developer rewards platform. There is $21 million from coin fund and hashed. A lot of deals. That's got to be a record in terms of deals. Probably not capital deployed, but a number of deals

for sure. Well, we've got a bunch of news this week. Did you see the SEC delayed their decisions on the spot Bitcoin ETF proposal for One River and Wisdom Tree. Not a shocker. Not surprising. Monday's episode, by the way, will be about Bitcoin ETFs. We haven't talked enough about them with Michael Son and Sean and Craig Salm from Grayscale. When your business is scaling up and your portfolio is growing, you don't want to waste precious time on manual crypto treasury management or settlement.

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All right, so here's an interesting ETF, new development, possibly, from, I don't think that the article's out, but it's on the terminal, if you have a Bloomberg terminal, if you're in that privileged class, from Eric Balcunas and James Safe Art over at Bloomberg. They think that they have a new timeline for a spot Bitcoin ETF approval. Yeah, I saw that. Everyone loves a new timeline. So they think it could be summer 2023. Yeah, but did you read the other parts of this hinges on the view that the SEC is going to get oversight of the crypto exchange spot market?

So I don't know. It's like poison chalice. The SEC is just coming out and saying that they get oversight of this commodity market. I mean, don't you think the CFTC would have something to say about that? Yeah. And there's certainly legislation that would push things in the other direction. But yeah, apparently they think that if the SEC, their rules, expanding the definition of an exchange, bring crypto exchanges under their ambit, then that would satisfy the final prong of their questions regarding Bitcoin market structure, opening the door to a spot ETF, and apparently as soon as summer 2023, although it's not that soon. I mean, I'm the only one that thinks this is ridiculous. I mean, you could come out and you could

say the SEC is going to approve baseball card ETFs as soon as they get oversight of all the exchanges that trade spot baseball cards. It's like, well, that's never going to happen. And why would they have oversight of that? Well, I mean, arguably, if you look at the crypto platforms, a lot of them do resemble, you know, regular securities exchanges. But Bitcoin's not a security. I don't know. It's a complex issue. Certainly there's things that are commodities and then there's things that look more like securities. I don't think it'd be optimal if the SEC got control over the whole market, but I can see why they think that they would have jurisdiction over exchanges. It's a little bit of a head scratcher to me, certainly some type of exchanges. But does anyone want to

talk about the 45 broker dealers that are in line with FINRA to get approval for digital assets? Or we're just going to keep on pretending that's not a thing? So that's your ETF SEC news. Yeah, let's talk about some more positive developments. So Cowan, which is an investment bank, probably a lot of people have heard about, they have launched a digital asset division and they're going to be trading cryptocurrency. So they're going to be getting into the spot market. So it's a move that a lot of other banks, larger banks, have not made yet. And I think Cowan here being a little bit of a first mover. So that's exciting to see. We're looking elsewhere in sort of institutional adoption, so to speak, figure technologies has announced Bitcoin and ETH-based mortgage products,

which I must say is a genuine pain point for people that want to buy a home. They have crypto wealth, but the bank doesn't want to give them credit for that wealth. I think this is going to be a very, very popular product. So you can get a 100% of your crypto collateral. You can borrow that in US dollars. So this is going to be a no-brainer for a lot of people. Here's an interesting thing. China's two largest cloud mining platforms, BitDeer and BitFooFut.

BitDear founded by Jihan Wu, I believe, are set to be the first cloud miners to list on the U.S. exchanges this year, which is kind of swimming against the current because Chinese firms are getting more scrutinized in U.S. capital markets. So we'll see if they're able to list without issue. Yeah, I was surprised to see that. Definitely surprised to see that. Did you see El Salvador? They delayed their billion-dollar Bitcoin bond offering.

I guess people weren't buying that. Yeah, and Buckelly took to Twitter to explain that it was not canceled. I think he called Reuters fake news. And apparently it's only delayed. Not canceled, but delayed. Yeah, okay. Run into a fair amount of criticism. Bitcoin 2020 is coming up.

Buceli's going to be there. Oh, he's speaking. Does he have more dry pattern in terms of announcements? I hope so. Maybe. What do you think he's going to announce? Just going to get up there and announce like a big purchase? Yeah, I don't know what else is left to announce from the Salvador inside.

But it's, you know, I should hope he's got someone to announce. Yeah, I would think so. I doubt he would go if he didn't have something to say. Exactly. So apparently the Honduras news, which people thought Honduras was going to be pulling a similar thing to El Salvador did not end up being the case. So if you were banking on Honduras to save the bull market, that has not occurred. What does Honduras have? The Lempira, is that what it is? I would have figured they would have tried to make a move there. Do you know that I was on a consulting project in Honduras once? And a week after I left, they overthrew their government. Dodge a bullet. It got out right in time. You weren't consulting regarding the coup, though. No, I was a lowly management consultant, but meanwhile, there was a coup in the making.

So elsewhere in sovereign adoption, our very own local Florida governor, Ron DeSantis, is working to facilitate the acceptance of cryptocurrency for corporate tax payments in the state of Florida. Why wouldn't you, right? talked about Cowan earlier launching a dedicated business unit. Goldman actually came out publicly with this news that they have traded a non-deliverable Bitcoin option with Galaxy. So not Spot, but they're the first bank to make such an OTC transaction, it looks like. So good for Goldman here. Why do you think that they chose Galaxy as a counter party? Probably because they had a good relationship with Novogatz.

Yeah, that was my guess is that there's a lot of X-Goldman. folks at Galaxy. So it makes sense. I mean, it is a big week for quote-unquote institutional adoption. Bridgewater, obviously helmed by Ray Dalio, who's been pretty critical, I would say, of Bitcoin, is now making its first investment into a crypto fund. They've been kicking the tires for a long time. We know that. Bridgewater does. I was kind of shocked that it took them this long, but they're they are exposed to the market now. And breaking news, it's not us. There's some interesting stablecoin news.

So this has been making waves on Twitter. The founder of Terra, which is they have a UST, not to be confused with USDT, UST, which is an non-fully collateralized stable coin, not even close to being fully fully reserved is now apparently they're backing it with Bitcoin. So they've purchased significant quantities of Bitcoin apparently up to a planned $10 billion worth of Bitcoin. They've already begun making purchases, which is actually kind of an interesting situation. It gets to us to a world where you have Bitcoin backed free banks, arguably, which is what we've wrote about, I don't know if you remember our white paper in 2020. We did predict this.

I do. I think we should update that. So yeah, I just want to get some credit for having predicted that basically. I don't know. I don't think anybody else was saying that there would be Bitcoin backed. Well, maybe aside from Hal Fannie, who predicted in 2010. But, uh, well, maybe Doquan read the, read the crypto dollars paper and you just said, I'm going to try this out. Yeah, I mean, I guess more credit for doing something as opposed to predicting it. But yeah, so this is a kind of a senior shares style stable coin. So it does depend on the market believing that it'll work and last. But they are backing it with some hard assets now, namely Bitcoin. So we're living in the future here. I mean, this thing is material in size. USD. There's 30 plus billion dollars worth of

crypto-backed stablecoins. I just checked. There's a hundred. $150 billion of Fiat convertible stable coins. So the non-fiat-backed dollar stable coins are actually quite sizable. Is there a way to figure out how much of that fundraise that they did a month or two ago has actually been deployed into Bitcoin? Not clear, but apparently that candle that we had a couple days ago was just a market buy from Tara. Could be an interesting few weeks here. if they start to go on a buy campaign, you do worry about what happens if, you know, with these senior share models, none of them have ever worked. I mean, maybe this will be the first one that does.

But when it unravels, could unravel fast. When or if it unravels, yeah. So I'm mixed on this as well because I don't actually believe that a senior share style, stable coin can endure because you look, even, you know, entire nation states haven't been able to defend their peg from activists. and short sellers. Like the United Kingdom failed to defend their peg against George Soros. So, and that's an entire country. So could a smaller private sector stable coin that's trying to do effectively the same thing, could they defend a peg? I don't know. I have a hard

time believing that. So the question is, or if we're celebrating the Bitcoin that they're taking off the market and they're using to back the peg, there's the equal and opposite reaction. action, which is they have to sell the Bitcoin if they need to liquidate the assets to defend the peg. So there's kind of a bit of a symmetry there. Yeah, that could get dicey. Well, we'll see how this plays out over the next couple weeks. Hey, did you see Bruce Fenton might run for Senate in New Hampshire? Yes, I did see that.

So self-funding a run. Bruce has been pretty politically active already. I think I'm not a New Hampshire resident, but I might. hold a sign for Bruce. I like Bruce. Bruce was former Bitcoin Foundation guy. Yeah, the Bitcoin Foundation had some personalities in it, some of whom are still very active in the crypto industry, even 10 years later. Yeah, well, Vorhees was on it, right? Was he? Charlie Schramm, Vorys, Patrick Mark. Cemetery, I think might have been involved, Patrick Merck. Elsewhere in Stablecoin news, Fireblocks and A&Z are partnering on an AUD-D-Pagged Stablecoin. The

website coin speaker and the headline claimed this was the first AUD peg stable coin. That's false, to be clear. True USD has an Australian dollar stable coin. I know this because I just tallied up all the non-dollar-based stable coins in my piece of research that I did to determine how many stable coins are dollar-based versus non-dollar-based. So what would be your guess? if you had to guess. I would guess 98% dollars. Very close. It's about 99, almost exactly 99. And the number in two and three are not actually sovereign currencies. It's gold with half a percent. And then other, as in new units of account like RRI or RSR, which are kind of like bundles of other assets. The third place is euros with 0.07% of the total. So basically, the dollar,

is totally dominant when it comes to stable coins. Yeah, not a surprise. And it kind of makes you think that the U.S. should be leaning into this a lot more. If there's anything that's going to strengthen the dollar on a geopolitical scale, it is stable coins. We're talking about $180 billion of net new demand for treasuries in order to collateralize fiat-back stable coins. I guess not all of it goes into treasuries, but a lot of it does. At a time when foreign central banks are divesting their treasuries.

So that's 180 billion dollars is a pretty material amount. I mean, that's like half of the amount of dollar base FX reserves that India has. It's like significant quantity. Did you read this article by Richie Torres? So he's a New York congressman. He wrote a liberal case for cryptocurrency in the New York Daily News. I think we're starting to see some fractures in the Democratic Party here. Everyone is not going along with this Elizabeth Warren plan to just shut down the industry.

Yeah, and I think the fact that, you know, the Ukrainian cause was so bolstered by cryptocurrency, and there's a real human rights angle here where individual Ukrainians are fleeing, the stories emerging in the press about Ukrainians fleeing with their crypto wealth intact. I mean, this is a very real thing. And well over 100 million were donated to the Ukrainian government in crypto form, because the banks just wouldn't work, right? And, you know, so we're just getting real use cases here that are hard to deny. Yeah. Yeah, I think that's right.

So speaking of real use cases, I mean, late breaking, just as we were going in to record, a bunch of quotes came out from Russia musing about accepting Bitcoin for energy payments. So I don't know how reliable these are. I don't know if these are mistranslated. But apparently, the chairman of the state Duma Committee of Energy, Pavel Zavani, said that they would think about selling energy. resources to unfriendly countries for rubles or gold and processing payments from friendly countries in their national currencies and possibly Bitcoin. So again, don't know how reliable this is, but that has Twitter all a flutter right now. It could well be the case that we end up seeing a model

where the Russian state uses Bitcoin, but regular Russians are banned from using it. So a two-tier model like we had with gold from the 30s to the mid-70s here. Not a surprise, I guess, but that'll be controversial. We'll hear some, if that ends up being true, there's going to be a lot of noise about that. Yeah, so that could maybe undo some of the progress we've made in terms of Bitcoin acceptability in Washington. What do you think about this New York Times article on Bitcoin mining this week?

So I actually thought the article was reasonable. It was reasonably good. basically they were saying that miners, they described some of the different models that miners are doing, the renewable co-location model, the flare gas model, mining with grid energy in West Texas, engaging in demand response. So they basically correctly described what miners are doing.

The thing that irritated me was this assertion about the per transaction energy cost, which is they just repeat verbatim from this not even economist, but researcher that works for the Dutch Central Bank. It's a completely flawed thing. There's no energy cost of a Bitcoin transaction. Making a Bitcoin transaction doesn't cost any energy. And so that bothered me.

Aside from that, I actually thought the article was reasonably good. Yeah, I thought it was well researched, actually. Yeah, I mean, still pretty skeptical of what people in the industry like to say about mining, in terms of the renewable share of generation, how demand response works, where miners are able to locate themselves, which is why we've still a bit of an educational undertaking here. Stay tuned on that front, putting the final touches on a paper on this topic. So hopefully we'll have more to share with you on that very soon. All right. So I think that's it for the week.

Bitcoin's just ripping right now as we do this podcast. Could well be maybe China's buying it so they can purchase Russian oil and gas. All right. Well, I think that's all we have. Like I said, we have a great episode on Monday with the guys over at grayscale talking about Bitcoin ETFs, talking about comment letters. Stir in the pot. We will see you on Monday.