On The Brink with Castle Island - Weekly Roundup 06/11/21 (Bitcoinización in LatAm, volcano mining, El Salvador turns orange) (EP.221)

Episode Date: June 11, 2021

Nic and Matt are back and recovered from an insane Bitcoin 2021 conference in Miami. In this episode:  Our lost roundup from last week Our reflections on Bitcoin 2021 Nic reacts to his spaces with President Bukele El Salvador accepts Bitcoin The story behind the 25k attendee Twitter space Does the Salvadorian law change the accounting treatment for Bitcoin in the US? President Bukele's geothermal Where else is the Bitcoinización likely to happen? A new non-aligned movement The Bitcoin Bloc MSTR's new bond offering Basel changes the rules for bank regulatory capital regarding Bitcoin Liz Warren attacks Bitcoin The Bitcoin political demographic grows Content:  Recording of Nic's spaces room with President Bukele (and 25,000 others)  This episode supported by:  Eventus, the leading global provider of multi-asset class trade surveillance, transaction monitoring and market risk solutions. Its award-winning trade surveillance platform is easy to deploy, customize and operate. Eventus is proven in the most complex, high-volume and real-time environments and supports many of the industry's leading crypto exchanges including Coinbase, Gemini, ErisX and OSL. Find them at onthebrink.link/eventus

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which is called shining a light on digital asset markets 2021. You can head over to On the Brink.com, slash Aventus to register today so you can hear from some of the key regulators and dot leaders in the digital asset space. That's On thebrink. Dot link slash eventus. Brought down by bad mortgage investments,

Lehman, which has 25,000 employees, will be liquidated. The federal government loans American International Group, AIG, $85 billion. This is a different kind of market, and the Fed is asleep. The federal government is stepping it to stabilize. Fannie Mae and Freddie Mac, the two mortgage giants that have been threatened by the housing crisis. The Bank of England has pumped 75 billion pounds more into Britain's ailing economy with a new round of

quantitative easing. You print a couple trillion dollars and all of a sudden people start to worry. So out of this worry, we have something called the Bitcoin. Bitcoin. Welcome to On the Brink. I'm Matt Walsh. And I'm Nick Carter. And we did not have an episode last week. We actually recorded it, but we never released it.

It's like the lost tape. yeah it's crazy maybe one day we'll resurface this is like the dead sea scrolls on the rink so we did i brought my equipment to miami and then we recorded a not a good episode it was like what 30 minutes it wasn't great and then it's my fault i just didn't have time to edit it and then it was out of date by the time i had time to edit it so we just didn't publish it It's we will have to keep it and maybe we'll we'll let some people hear it. You had some really hot takes against one company that shall be not named. Did I really?

Yeah. I don't remember. Yeah, it was actually a pretty hot, you know, you're firing away. Okay. So, yeah, there's some intrigue in this loss episode. But yeah, sorry about that. Is that the first one we've missed in the history of the show? That was the first time we've ever missed a Friday news roundup.

But everyone was down in Miami anyway, so it doesn't really matter. Everyone saw us anyway. There's some great listeners. It was awesome to meet the listeners. Yeah, I saw some people wearing Brink Nation gear. Shout out Brink Nation. That was cool. I saw some canty on outsiders down there, too.

Yeah, that's the best one of our gears. So you did get to see us in person, so that's pretty much as good. I think someone told me that that last week was the lightest podcast week in Bitcoin history. probably i mean everyone was there so why don't we talk about the conference first what were your um your takes i i loved it everyone who was not there did not like it yeah um a lot of people that aren't big corners were you know cherry picking specific moments to make fun of big corners or whatever of course you're going to get cringe worthy moments with any conference but the quality of speakers was unbelievable um i was lucky enough i got to meet most of these people

as they filtered in the speaker room, I met Nick Zobbo, you know, a whole bunch of people like that. It was great. So I thought the talks were great. I'm still watching some of the talks. And then just the accumulation of Bicorner is in one place. I think it's the best sort of set of people I've ever seen in terms of like completeness. And, you know, that was, that was, you know, really incredible. Just a super uplifting event. I came out of the they're so energized for the industry, so many purpose-driven people working on things. I thought the Bitcoin magazine team did an awesome job organizing it. It was a really, that must have been a bear trying to coordinate everything,

but it was a really good venue for it, really good layout. Yeah, I mean, how the heck do you, you know, Marshall 12,000 plus people? And there really weren't that many technical hitches. And, you know, nothing really went that badly wrong. It was very impressive. Yeah. So just a ton of. fun. I guess the biggest

announcement there was the El Salvador thing, so I guess we'll get into this right now. You actually talked to the president of El Salvador on Twitter spaces with 20,000 of your closest friends on Tuesday night, which was one of the crazier things that has ever happened since I've known you. Yeah, this whole thing has

escalated. I just talked to the BBC about it, actually. But yeah, so So first of all, Jack Mallors goes on stage of the conference and announces that basically he's been working with El Salvador to make Bitcoin legal tender. This, I guess, is a continuation of some of the work that was happening at El Zante, Bitcoin Beach. I know a lot of Bitcoinists have been down there, so this didn't surprise me that much because there's been this kind of pilot using Lightning, using Bitcoin for commerce. but then this bill that's proposed goes way beyond that.

I mean, eliminates capital gains for Bitcoin transactions. So basically, you don't have to worry about your cost basis or anything like that. Goods can be priced in Bitcoin. Mandates the acceptance of Bitcoin by merchants in El Salvador. I mean, some would say that's actually, you know, a little burdensome, but either way. creates a liquidity facility managed by this trust, this public trust that would facilitate USD to Bitcoin transfers. And there's more.

But this is incredibly sweeping, incredibly aggressive regulation. The bill itself is like two pages. It's really short. All bills should be like that. What's the deal with these like $4,000 bills we have here? You can just do two-page bills. So that happens. And then as this bill is being voted on in Congress,

you know, I started this Twitter spaces just to talk about it. And eventually, two of the president's brothers joined, and then the president himself joined, which was just insane. And you guys were on there for hours. I mean, I actually went to bed when the president's brother was there, but you were on there for five hours. Yeah, I started. it at like 9 p.m. I'm like, okay, I'll do a spaces for 30 minutes while I cook dinner.

I had intended to just wrap it up. I wanted to translate the bill because we first got in Spanish. And then, you know, all these great people joined. And then President Buckele joined. And we grilled him for like 90 minutes. I mean, initially his brother joined and said, I'm going to answer like two questions. His brother stayed on for hours and hours. And then he recruited the president to come on. And unprompted, like I had no contact with the administration, unprompted, completely cold, no idea of what to expect. The president of a sovereign nation comes in during his greatest accomplishment,

arguably, you know, most high profile accomplishment, certainly. Comes in, decides to spend the evening on Twitter on this live audio chat with 25,000 people. And the room grew up. I mean, like Jack Dorsey was in the audience. Tom, the founder of Myspace, was in the audience. David Sachs was in the audience. Mark Cuban was in the audience. I mean, Silicon Valley elites, basically. And they're all fixated listening to me, Balagy, Caitlin Long, grilling the president of El Salvador on his Bitcoinization plan. And to be clear, we were not overly deferential. I mean, we asked him some really tough questions. And I'm proud of that because a lot of people are going to say we were just being super obsequious and simping over. for this Bitcoin president. But no, we asked some tough questions,

and he answered all of them. He answered all of them. I was surprised that he answered all of them. I mean, that was a phenomenal little setup there. This is one of those situations where when I first heard the announcement, I was dismissive. We've seen so many of these over the years where it's, you know, Honduras time stamping,

records onto a blockchain or, you know, IBM powering some sovereign thing that never goes. anywhere. So it was easy to be a little bit skeptical of this, but this seems like it's a much, much bigger deal than people think. And one of the other angles here is I'm curious what happens as a, you know, if Bitcoin's legal tender, does this address some of the balance sheet issues from an accounting perspective, even in the United States? So are the implications of this wider ranging such that some of these issues around marking down balance sheet for micro strategy when the price goes down? If this becomes one of those things where they can classify,

it as a, you know, cash substitute on their balance sheet as opposed to treating it like goodwill. Yeah, it's going to be really interesting to see that play out. I mean, does a Salvadorian reclassification or legitimization of Bitcoin, is that sufficient to cause it to be interpreted as a foreign currency in the U.S.? Unclear, unclear. But yeah, that would be really, really interesting. if it were reclassified. And it's not this indefinite and tangible, which causes all these issues.

But my takeaway from that conversation was, firstly, President Buchali is speaking with people he does not know in a, you know, not in his first language, but he was very eloquent, didn't prevaricate or, you know, really avoid any questions, give clear answers. he had very strong command of all the details of the bill and of Bitcoin.

One of the craziest things is that Alex Gladstein asked in one point, are you going to participate in Bitcoin consensus? You're going to mine. The president had clearly given no thought to this, but he's like, off the cuff, completely exemplariously, he says, oh, yeah, I guess we could, you know, put her geothermal assets to use, mining Bitcoin. 24 hours later, he tweets out that he's instructed his energy minister to, you know, put this to work and start mining Bitcoin with, like, quote-unquote volcanoes. I mean, like, the pace of, like, activities, unlike anything I've ever seen, I mean, compare that governance model to the scleroticism we have here in the U.S.

I mean, it just really left me thinking, like, damn, it's like things don't work the same way. you know. Well, and that's where you get into some of this. He doesn't have the best record from a human rights perspective maybe necessarily. So, yeah, there are pros and cons on this. I think the really interesting thing here is that if you think about this in the context of a country that is aligned with the dollar and then before Bitcoin, what leaving that would have looked like, it probably would have looked like a migration to another world powers fiat currency system. And now you have this ability for countries that have, you know, fiat currencies that are pegged to the dollar to sort of migrate to something that is run by software across the world as opposed to run by Russia or China as an alternative, which is really interesting. I mean, it's like the Bitcoin block is being formed.

Yeah, Balagie has been saying this. I believe you actually said this on the call. There are live streams or, you know, YouTube versions of this. someone a few people recorded the call apparently um balladji is saying that we have the washington consensus which is you know the the neoliberal institutions that the u.s. maintains iMF world bank uh wTO and then of course the dollar uh which which is fraying we all know it's it's sort of decaying structurally it's less compelling it's the deal that it's provided to countries on latin america has been a bad deal historically um then you have the sort of

Chinese block, you know, the Belt and Road initiative and all of the institutions they're creating the Asian Development Bank. They'll eventually create this digital yuan. So, you know, there's an alternative set of, an alternative institutional arrangement you can opt into. And then now we have this new non-aligned movement, which is countries that maybe don't want to subject themselves to the monetary, you know, or institutional approach of either the U.S. or China. And maybe this is the formation of a new block where you can opt into this commodity standard and opt out of something like the dollar. So I did ask President Bucheli if this was part of a move to de-dollarize. I think he rather diplomatically insisted that he had no such intentions.

I asked him if he was worried about inflation in the dollar. He didn't seem too concerned. And he reinforced the idea that this was mostly. done out of a desire to make remittances more efficient into El Salvador, which is fair. But I mean, if you're a Latin American country, he did refer to the Cantillon effect, not by name, but he described it, talking about, you know, the stimulus payments in the U.S. coming from the issuance of new dollars, those only benefit Americans, but everybody globally bears the cost of inflation, which we just had a very high inflation print today.

So he's aware of this. And I think every dollarized country is aware of this. And they were beginning to think, well, does this have to be our future? And so is your view that the dominoes start to fall now? I mean, we've already seen like a half dozen high profile Latin American politicians all across the continent signal their affiliation for Bitcoin. So we'll see if any of that materializes, I think, the best. countries with the most likely prospects of embracing Bitcoin would be the already dollarized ones because they already have surrendered the monetary sovereignty. They already don't have

monetary discretion. So look at the Panama's and look at the Ecuador's. Columbia would be another great one just because Bitcoin is so heavily, you know, prevalent there already. Obviously Venezuela has already rat, this is what people aren't really talking about. Venezuela is already ratified Bitcoin. The state holds Bitcoin, the state mines Bitcoin. You can pay for Bitcoin to renew your passport in Venezuela. Bitcoin is already effectively money there. It's a pariah state.

That's the difference. El Salvador is the first non-pariah state to truly legitimize Bitcoin. Quite an interesting development. Why don't we transition into some deals? And then we'll talk about some of the other news coming out of the conference. First one up here is Solano. Labs. This is the team behind the Solana blockchain. They raised $314 million. It was actually $314.15.15 million. So Pye's number of million dollars in a token sale to Injuries

and Horowitz, polychains, CMS holdings, jump capital, multi-coin and others. Pretty crazy to raise pi million dollars. Yeah, but this is crypto. So I guess it doesn't surprise me that much. Ledger, everyone's favorite hardware wallet manufacturer. They also do other stuff. They raise $380 million in Series C funding in Iran led by 10T holdings. Next one up is Block Damon. This is a Node Infrastructure Company.

There is $28 million in Series A funding from Green Spring Associates with participation from Goldman, BlockFi, Warburg Series, and a number of others. Next will be a Flair. There's a smart contract platform. They raised $11.3 million from kinetic capital, DCG coin fund, and LD Capital. Next, we have Luxor. This is a Bitcoin mining company.

I actually met these guys down in Miami as well. They raised $5 million in a round led by Nydig. Then we have Spartan Group. They raised a $110 million fund focused on defy investments. Congrats to them. Next is Mythical Games, NFT gaming startup. They raised $75 million from Westcap, Zero One Advice. and Gary Vayner's Fund.

And lastly, we have Red Date Technology, China-based enterprise blockchain company. They raised $30 million from Kinetic and Prosperity 7. There's actually one more. It's unbound finance, which is a stable coin platform. They raised $5.8 million from Pantera and Arrington XRP. So news, I mean, huge amounts of news this week. I mean, just unbelievable. We've already talked about the Salvadoran announcement.

And we'll be tracking that. The other thing there is that the IMF has weighed in. We did ask President Bucheli if he expected to hear from the IMF. He said he would hear from them Thursday, i.e. today. And unsurprisingly, the IMF does not seem too pleased. They tend to prefer the, you know, Latin American country standard, the yoke of the dollar and their particular economic prescriptions. and one of their spokesmen said adoption of Bitcoin's legal tender raises a number of macroeconomic, financial, and legal issues that require very careful analysis.

Nothing final from them really, but they seem unsurprisingly, they seem perturbed because I guess they don't want anyone to opt out of their system. That's kind of a non-comment, right? Just, hey, this raises a bunch of questions. Yeah, but I mean, I think the tone is clear as they're effectively cautioning El Salvador. And El Salvador's sovereign, their yields rose. So investors are maybe a little spooked. I mean, very attractive. It's like trading at 7.8%.

So I might see if I can buy some Salvadorian bonds here to support them. Well, maybe some of these big global macro managers are going to take a look at that, as I'm sure they're taking a look at micro strategy. So micro strategy is added again, speaking about bonds. So the company sold $500 million worth of notes on Tuesday, and it was a process where they originally were shooting to raise $400 million. They had $1.6 billion in orders, and so they adjusted the pricing a little bit here. Company right now holds 91,579 bitcoins.

They've deployed $2.2 billion into it so far. That's about $24.3k per coin. and the $500 million more is going towards Bitcoin. And the one difference with this note offering that I found was interesting is that it's not a convertible note. And so the prior offerings can be converted into equity. And so there's some dilution there to the equity holders of micro strategies. This is going to be senior.

So it's going to be secured with the future Bitcoin purchases, which basically means that if micro strategy goes out of business, if you hold these bonds, you have a claim against the Bitcoin. itself, which is, you know, you can see how that would be pretty attractive. Yeah, I think Michael Siler wants to get over 100,000 bitcoins, and this should take them there. So you can't stop short of 100K. I mean, but why stop at 100? It's a nice round number.

Yeah, I guess so. So one does wonder, you know, how much more debt they can issue. but apparently capital markets still have an appetite for it. I mean, capital markets are wide open for business on this clearly. People just, this is a roundabout way to hold Bitcoin exposure if you're in a seat where you can't just go out and buy it. So there was some interesting, I don't want to say FOD, but there was some interesting FUD regarding this colonial pipeline hack

whereby the FBI somehow retrieved most of the coins paid to the ransomware hackers and they did not really elaborate on how they seize the coins which that might have been deliberate to sort of imply that they can get access to coins anywhere which obviously they can't did they break the elliptic curve

yeah so it was breathlessly reported in the press in various other places that you know the long arm of the FBI can reach ubiquituins anywhere some people thought this meant that the cryptographic primitives Bitcoin relies on or broken. Of course, it's not the case. Most likely the hackers stupidly used a custodial service or stored the coins on a server that could be subpoenaed. Anyway, we don't know exactly how they acquired the coins.

It's very likely they acquired them through coercion, through standard kind of enforcement techniques as opposed to, you know, the U.S. possessing a secret quantum computer that they chose to reveal the existence of to, you know, steal, you know, $2 million worth of Bitcoin. Yeah, a lot of, a lot of fud there. Bitcoin kind of crashed on the news there, which was pretty interesting. All is funny when that happens. I took note of this speech by Dan Berkowitz this week. So he's a CFTC commissioner.

He made a speech to the asset management derivatives forum, and he, in the speech, he called out the legality of defy derivatives markets, basically questioning whether or not they were legal. Would you make of that? Yeah, I was listening to a few kind of crypto-regulatory experts talk about it, and they don't really have a lot to disagree with. It's not like he's basing his points on some misinformed view of defy. I mean, defy is just completely operates with no regard for, you know,

laws governing derivatives. or anything like that. I mean, his comments seem true, frankly. I guess the question is, what are you going to do about it? Well, that's the question is, you know, who are you going to go after? Some of these teams you don't even know. The genies, I feel like the genius is pretty out of the bottle on some of these things. I mean, they're going to exist, even if there was someone to go after,

which in some cases, to be clear, there definitely are people to go after that live in the United States and that are running some of these things. But you're just going to see these things fork. I guess what you could do is cut down on the ability to get, you know, money into these systems. And maybe that's a lever they have. Oh, I mean, they definitely have tools should they decide to actually enforce the law here. I mean, most of these things are issued by known entities. The fact that the protocols would get forked doesn't mean that they just wouldn't do anything.

This seemed like a real shot across the bow. I think it's a real statement of. intent. So this was probably one of the more alarming pieces of news that I saw last week. Yeah, certainly for the defy portion of the market. Speaking of the CFTC, so Crackin is no longer offering margin to certain U.S. clients, and this is a direct result of CFT interpretation of how they're doing margin is my guess. And so several exchanges have come to that same conclusion over the past couple of years and halted that margin profile. So CFTC, getting more active here is kind of my takeaway. Yeah, and they are typically known as like the smaller

of the two main financial regulators and lease intrusive, but they've clearly taken note of crypto markets and they're getting to work. Another fund launch this week, so Square is launching a $5 million dollar Bitcoin fund to promote financial inclusion. So it looks like this is a vehicle that will give grants out to ecosystem participants. Black Bitcoin billionaire is a group that provides wealth education to its members. They're the first recipient. So Square continuing to do more and more things. And I'd say Jack was one of the highlights of the whole thing down in Miami. Yeah, that was a fantastic conversation you had with Gladstein. And Gladstein made a lightning transaction live during that conversation. It was great. And it went off without a hitch. I mean,

how nervous must you have been during that? He was practicing with me backstage beforehand. I actually met Gladstein for the first time in person down there. It was great to meet him. So many people down there in Miami. Yeah, I mean, speaking of, you know, financial inclusion, educating people on the usage of Bitcoin worldwide. I mean, Gladstein, he gets my MVP for, you know,

chief and best Bitcoin educator for the last 12 months. He's done some really great work. Yeah, totally great. So here is some interesting bank news. The Basel Committee on Banking Supervision proposed a 1,250% risk weight to be applied to banks exposure to Bitcoin and other cryptocurrencies. So this is a little complicated, but basically it means that banks have to hold a dollar of regulatory cash. for every dollar of Bitcoin that they hold and the math works out because the standard amount of capital they have to hold to match a deposit is 8% and so 8 times 12.5 gets you to

one. I don't know if I explained that in the way that made sense at all but anyway the point is banks are going to find it very capital capital inefficient to hold Bitcoin, assuming this Basel guidance goes through. Yeah. So my takeaway on this one is that if this proposal is actually has any legs, then you're just not going to see a lot of banks that offer Bitcoin custody because it won't make any sense from a balance sheet perspective. You hold $500 million worth of Bitcoin. You have to hold $500 million worth of cash just as a reserve against that. And Bitcoin is very volatile. And so what happens if Bitcoin goes up 10x, how are you going to go out and get, you know, that much cash?

So to me, the net effect here would be we're going to have a really fragmented custody landscape for Bitcoin custody. And maybe the banks won't be very big players in that custody landscape. So, of course, you know, there's a million nuances here. The laws will have to be written. The interpretations will have to come down. But on the face of it, it doesn't seem very conducive to banks being custodians for Bitcoin. And I guess my question would be, would something like this actually push the banks in the direction of where we should be going anyway, which is multi-sig collaborative custody? You know, wouldn't it be great if as a user you could have a custody account with fidelity and a two of three multi-sig with, you know, CASA or unchained, signing one and you hold one key and two of three need to come together?

Something like that from a user experience and a security perspective and a not creating central honeypots perspective makes a ton of sense and you know maybe something like this from a regulatory perspective also adds the rationale to put something like that into practice well it may be true but i think there's always going to be demand for banks i mean some people just don't want to hold keys period in fact most bit corners as we've seen empirically would rather hold their keys with a third party than then hold their keys directly. So what I'm saying is that maybe this is an impetus for the banks to see themselves more as technology companies and not pure play custodians, where the banks say, look, I'm not, I don't want to hold billions of dollars worth of U.S. dollars against this. This makes no sense

from a business case perspective to be a Bitcoin custodian, given these high capital requirements. What if I'm a technology signer on this? And we have a relationship with another kind of arm's length company that can be a signer as well, and that the user holds a key on their smartphone. And whatever. If the user loses the key, that's fine. We can have some redundancy in the system. But maybe banks just redefine the nature of custody for a digital asset as a result of something like this. That's a very optimistic take.

I don't think any of these people, bank regulators, banks themselves understand the nature of collaborative custody yet. certainly the accounting bodies don't. But maybe we'll get there. Well, I mean, we know for a fact that forward-thinking companies like Fidelity understand this stuff. And so you would only think that if there's a business to be had here, if there's money to be made, the banks will start to figure it out. It's clear that they're already looking at centralized custody.

And so if that is a bottleneck to getting those businesses launched, you know, maybe we'll see collaborative custody. Now, a lot needs to happen, to be clear. I mean, you'd have to redefine possession and control. There's all sorts of stuff to figure out a good control location. So we'd have to see some regulatory changes, but I'm optimistic. So speaking of bank regulation, what did you make of the FDIC request for information on digital assets? Yeah, this happened a couple weeks ago, and it sort of slipped below my radar.

So the FDIC is kind of the primary oversight body over state chartered banks, and they have special authority over OCC and federal reserve banks in the sense that they oversee the insurance funds, the deposit insurance funds for all of those companies. So it's a broad mandate. It's a powerful body. And they put out a request for information to the industry basically saying, what are you thinking about digital assets? tell us a little bit about the industry, tell us a little bit about what you're thinking from projects and strategies perspective. So I didn't think much of it at the time, but I was kind of going back and forth to some people that are a lot more knowledgeable than I am around what this actually means.

And the sense I'm getting now, in the way I'm starting to think about this, is this actually could be a good opportunity for folks that are in the startup ecosystem, who are thinking about what it's like to engage with banks and want to see things happen. It could be a big opportunity for smaller banks that actually, want to launch projects and products to just put their thoughts forward. And the interesting thing about these requests for information is, you know, when rules start to be written, they oftentimes go back to the request for information and they reference some of the comments that were set in.

So you could have a tweet storm and they're never going to reference that. But if you put that tweet storm in a letter, then they'll reference that and they'll take it into account. So I actually would encourage anyone who wants to do business with FPA. DIC regulated banks or that is working at a FDIC regulated bank, just take a look at this request for information and see if you have anything to say about it. Yeah, we wrote one response to the proposed FinCEN ruling. Maybe we'll have to put pen paper once again.

Yeah, I mean, I think my overall takeaway would be let's think about what it would take for a bank to custody digital assets and, you know, whether that be Bitcoin, stable coins, let's think about payment systems. Let's think about how we define possession and control of a digital asset. I mean, there are a lot of things that need to be taken into account here. Let's think about lending. There's a bunch of businesses that some of these smaller banks are trying to launch right now. So in local news, we have a long tradition on the show of being sorely disappointed by our local policymakers, whether it's Stephen Lynch or in this case Elizabeth Warren, our cherished local senator has come out with a real broadside attack on Bitcoin and cryptocurrency.

She had some very, very unkind words to share about our favorite asset class. But she just rolled the fud dice, right? I mean, what would she say? It's burning down the environment. Did she have anything original? Nothing original. It was just a torrent of pretty misinformed opinions in my, in my view.

The environmental narrative was, you know, front and center. There's the classic canard about illicit usage. She felt that Bitcoin doesn't increase financial inclusion. That's only used for speculation. That is volatile, et cetera.

So, yeah, she's not a fan. She's not a fan. Well, if you have Donald Trump and Elizabeth Warren knocking you, maybe you're doing something right. Yeah, the weird thing is Warren's also a big skeptic of the big banks or purportedly a skeptic. So it's like, if you don't like banks, you don't like Bitcoin, what do you like?

You know, the door is wide open here to a Dan Matashefsky junior Senate run. There's a political action committee that is being formed. And we're doing a study right now. Yeah, it is interesting to contrast these molecular. millennial politicians in Latin America that are embracing Bitcoin and then to look at our much, much older politicians that apparently run things here in the U.S. who seem to either not understand Bitcoin or to despise it because they're clinging on to, you know, this fiction that the U.S. is going to retain hegemony forever and the dollar is never going to be questioned.

with Warren, I think a lot of it stems from her embrace of this still theoretical CBDC. She clearly wants to push through some sort of completely nationalized state money system, which is, of course, not how money works yet right now. You know, money is kind of a public-private partnership. And it appears that Elizabeth Warren wants to push through a CBDC. with all the nice surveillance benefits that that would provide. And so that's what she's selling against. She's selling against Bitcoin,

and her proposed alternative is effectively a fully nationalized electronic money system, which might be fast settling and everything like that, but it seems very unlikely to me that would actually give you any measure of transactional privacy. It's kind of a false paradigm to think that you can only have one or the other, though, right? I mean, it seems inevitable that we would have a CBDC like that with full surveillance, the ability to, unfortunately, but full surveillance, the ability to have transfer payments occurring whenever politicians want. I mean, that can exist and Bitcoin can exist in a parallel contact. Right. And, you know, more consumer choice is always better than less, as. as George Saldon always points out about monetary regimes,

why does the state need to be a monopolist on money, on financial rails? That's not, it's divine right? That's not how it was set up. This new Fiat standard is an aberration in history, and there have been plenty of times when money has only been a privately issued phenomenon. So I don't see why we need to move to this completely monopolistic. approach. Yeah.

It was interesting. Tim Wu, who's the top antitrust expert in the Biden administration, there's a disclosure report that got released this week that he holds quite a bit of Bitcoin. I think it was like 20, 30% of his net worth in Bitcoin. Yeah.

And Bitcoin is not a partisan issue. People react to it in a partisan way, but at its core, Bitcoin is just about an open and free system that's available to anyone, regardless of who they are. and a system of very strong property rights. And so it tends to reveal a lot of how people think about society, but in of itself, it's not a partisan thing at all.

All right. So I think that's it for the week. When do you think your voice is coming back? It's been, yeah, it's been a few days now, and it's still pretty rocky. Hopefully in time for my next Twitter spaces with another head of state, fingers crossed. Yeah, well, you know, I don't know how you can one up that one.

You're going to have to go, maybe you can get like the president of Brazil to adopt Bitcoin or something. Well, you know, the interesting thing is that when these politicians like say good things about Bitcoin, they get love bombed by hundreds of thousands of Bitcoiners. And the serotonin boost must be incredible. I mean, they're politicians. So they thrive on this stuff. But so many more people know President Bucheli's name today than a week ago, right? Oh, it's amazing.

That must be a rush. I mean, Stephen Lynch, our local congressman, he should stop trying to shut down startups with this stable act nonsense and start just embracing it. He would get a lot better DMs and likes and engagement. Well, and yeah, and so we say this kind of in a joking way, but like as the Bitcoin political, you know, unit, the Bitcoin demographic grows and it is always growing, the incentives to embrace this thing grow ever greater. and that's not going to reverse any time soon. So the smart politicians are hopping on the Bitcoin lobby while it's young. Well, I think you've put the nail in the coffin on Clubhouse. Twitter space is just on the scene now.

Oh, yeah. I think this was the biggest Twitter space of all time. Crazy. I had Twitter product people messaging me and thanking me for actually sort of pop popularizing Twitter spaces. It's, it's incredibly. You can have 20,000 people on a space. It's crazy.

Yeah, 25. I mean, think about the net worth of all they accumulated. There are many billionaires in the audience. Crazy. It was insane. Crazy. All right, everyone, that's it for the week. We'll see you on Monday.

Have a great weekend.