TFTC: A Bitcoin Podcast - Ten31 Timestamp: In It For The Tech

Episode Date: June 8, 2026

🔗 https://bitcoinproducts.com In this episode: Why AI's recursive self-improvement could lead to exponential growth How the US government's interest in Bitcoin and AI could drive demand The potential implications of a strategic Bitcoin reserve Signs Bitcoin may have bottomed while traditional assets struggle The intersection of economic security and national security TIMESTAMPS: 00:00:00 - Introduction to AI development 00:05:00 - US government's interest in Bitcoin and AI 00:10:00 - Potential implications of a strategic Bitcoin reserve 00:15:00 - Bitcoin's price and market conditions 00:20:00 - Economic security and national security 00:25:00 - Conclusion and final thoughts SUBSCRIBE › Newsletter (free): https://tftc.io/bitcoin-brief/ › YouTube: https://youtube.com/@TFTC?sub_confirmation=1 FOLLOW US › X: https://x.com/tftc21 › Nostr: https://primal.net/tftc FOLLOW MARTY › X: https://x.com/MartyBent › Timestamp: https://www.ten31timestamp.com/ › John Arnold: https://x.com/JohnArnoldTen31 › Ten31: https://ten31.xyz

John, it's over. Bitcoin's dead. For the 285th time, we have to unfortunately attend Bitcoin's funeral. It's as sad as it always is. The eulogies are getting better, though. They're getting better. It was fun. It was a nice college try. We kid. We kid. Obviously, a lot of people out there wondering what's going on with Bitcoin. What is happening? We'll get to it. But I think we want to start on another side of the market, AI. I think a continuation of our conversation from last week but first before we get into uh any sort of ai dividend funds for for localities we'll talk about the progression that uh anthropic is is really pointing at here in terms of what the models could do it was actually funny i was at a lunch on friday where we were talking about this

and we naturally got in the conversation of humans thinking linearly not being able to think in exponentials and if what anthropic said last week is true which was in this when ai builds itself blog that they publish we may be getting closer to some weird moment where maybe agi who knows but basically anthropic saying that what are the 80 percent of the code for new models is being written by claude itself yeah well we say you know you said it's it's uh we're starting on the other side of the market and you know we'll get to bitcoin but i think it's it's worth remembering as we talk about all these that like increasingly, I think, you know, not to go too Pepe Silvia on it, but I think it is all, it is all increasingly connected given how big AI is becoming on various

dimensions. But yeah, I thought it was good, good to start here just because I think this maybe didn't get enough airplay in mainstream press, at least as far as I saw. This is the kind of thing that, you know, recursive self-improvement, this has been like the goal that, you know, if you, a lot of us probably only really started paying meaningful attention to AI and progress in AI over the last few years as it's become mainstream and more involved in our lives. But this is the kind of thing that if you go back and look at like what people in like five square miles in San Francisco were, you know, talking about in like the late 2010s, early 2020s, you know, this is like the hurdle that you kind of want to get to if you're

extremely call it AGI pilled. And, you know, you're whether you're positive or negative on that future, if that's what you're looking for, you're looking for the moment where AI can be the best AI researcher Right. So, you know, when you take humans out of the loop or minimize their involvement and AI analyzes itself to build like the next, you know, one generational model analyzes itself to build the next generation of itself. Right. And obviously that can lead to some some potentially frightening conclusions and some paperclip maximizer type futures that we could think about. But I didn't despite all that, like I didn't really see this picked up on a lot of like mainstream press headlines. And it's, you know, to some extent they're talking their own book here. Right. this is a marketing document from Anthropic. They're incentivized to tell you that, you know,

they're just, they're just on the cusp of getting to this big milestone, but there's a good amount of data in there that points to the fact that this probably is, you know, happening. And, uh, it seems, it seems important. Uh, so if this is going to, to the extent that they're, you know, this is not just marketing BS, you know, it, I think it validates a lot of what we said last week about the pace of progress here. Uh, if you want to call it progress, potentially leading to some some meaningful discontinuous changes in the the economy in the next few years and you know that'll have a lot of downstream implications that uh you know we we have talked about that we'll talk about yeah and it's funny too not only did this uh this blog post come out and i agree i

don't think it was picked up by enough people i was happy that uh it was recognized at lunch on friday when i brought it up but another you mentioned human in the loop taking them out for the model building themselves but i'm not sure if you caught this but you had a boris from anthropic and peter steinberger from the open claw project basically coming out and saying the same thing but on the prompting side like they don't actually prompt agents anymore they simply set up these loops of agents prompting each other and they basically set it off once and the way their looping architecture works the the ai just builds everything for them they don't even prompt anymore. Yeah. That's wild. It's, it's only going to get weirder. And, you know, I think

there's, it's to be fair and not get too sensational, sensationalist that there's always a diffusion curve and the vast majority of people like have never, largely never even heard of this stuff. There are enterprises everywhere that, you know, will be slow to adopt for reasons that we've talked about. They may get disrupted and they may ultimately be, you know, kind of dinosaurs that go extinct. But, uh, you know, the, the call here is not that, uh, in, in 12 months, every white color worker will be without a job. But on the margin, you could start to really see if this continues and accelerates, even with the diffusion delays that you would expect to see some meaningful impacts on at least segments of the economy, which maybe flows into the next slide nicely

with longtime political allies, Bernie Sanders and Donald Trump, both arguing for the government or the public as it were to take a stake in uh leading ai labs so that uh the the public at large can you know can benefit from all of this uh this crazy growth that we're seeing here yeah i mean they were listening to us last week you know must have been and they said hey we need we need to do this i've got some thoughts on this is tom mazziero from nelsphere 3d post-murder i mean he's been beating the drum about this for about a month now and behind the scenes i mean I've worked with Tom going back to Great American Mining. And in the context of Bitcoin mining, we had this idea almost a decade ago,

which is when we were running into similar problems with Bitcoin mining operations and the questions that neighbors would have about what we're doing and complaints about the noise. The idea of replicating the Alaskan Permanent Fund, which I mentioned last week, but bringing it to either Bitcoin mining centers or now, I think, AI data centers is something that is obviously becoming part of the conversation. But then you get into, like, okay, if we're going to have the conversation, I think implementation details are important.

And both Bernie Sanders and Trump's approach, I would not agree with. I think we should get more local like these. If you're going to do something like this, a dividend, a compute permanent fund, whatever you want to call it, it should be between the individual companies and then their individual operations within specific counties and specific states, and you get it hyper-local. This idea of the U.S. government buying a 50% stake or any material stake and us expecting for the revenues

derived from those data centers to actually be used and allocated appropriately by the federal government is simply like a non-starter. We know the government can't allocate capital efficiently, at least the federal government. Yeah, I mean, I agree with all that. I think all of this is so preliminary still that it's tough to give a ton of weight to the exact implementation. But I just think I will say like the horseshoe theory here is like really interesting, right?

Like you're seeing all sides, you know, starting to see the idea that, you know, something like this would be tractable and feasible. And, you know, I think the interesting implication of that, too, is like if something happens at the federal level, it kind of goes back to and reminds me of what Sarah Fryer, OpenAI CFO, said last year, you know, briefly mentioning the idea of like a federal backstop for the OpenAI build out. And, you know, if the federal government indeed did take some kind of stake in these companies that are becoming, it's clear based on the Department of War's stance and the State Department's stance, like key national security assets, you know, you start to really move into the direction of the big labs, the frontier labs, and maybe some of the key infrastructure players effectively becoming too big to fail. Right. And what does that then mean for the state of public finances and actually making that happen in practice and providing that backstop with, you know, federal debt load where it already is? You know, I think as it relates to how things connect to Bitcoin, that's something to keep in mind. Right. So think about for the next few years, like if these become truly too big to fail, what's required to drive the acceleration that's necessary to kind of keep them ahead of, you know, open source labs and open source models? and what would be potentially necessary if and when there's a meaningful hiccup or slowdown in the rollout or the adoption to the extent that ever happened

or if they could make the economics work on frontier models. I'm not saying that's my base case, but it introduces a lot of spiraling public obligations on both sides, whether you're bullish or bearish, to kind of keep this going. Yeah, to your last point there, I think another underappreciated theme of the last week, maybe two weeks is the recognition that the open source models are maybe not exactly where the frontier models are at any given point in time, but they're close enough. And when you consider the fact that a lot of these hyperscalers running closed source frontier models are beginning to actually charge people for the compute companies are having to really weigh the opportunity cost

of using a frontier model versus a open source model that's 90% cheaper. And so I think what we're seeing, too, is on the implementation of actually using these tools, companies are getting smarter about how much they use the expensive frontier models versus siphoning off subtasks and subagents to open source models that are 90% cheaper. And so then you get to the question like, oh, is the US going to back these hyperscalers? And then the demand for their compute wanes because the open source models are so much cheaper. Yeah, I mean, I think it's a legitimate open question. You know, if you get to the point of if we hit the recursive self-improvement fast takeoff moment, then perhaps, you know, the the lead that that frontier labs have over the open source models might expand and, you know, meaningfully increase.

So maybe it's, you know, first first person to that milestone kind of kind of wins. I think you could have that that argument. I think some people make that argument. You know, I don't think either of us are smart enough to totally predict that, but it is absolutely a reasonable question. How does compute stratify long term? And, you know, is there a long term business model that can sustain the amount of capital that's already been raised by the frontier labs? I think it's still TBD. So we'll see.

Yeah, we will see. And as it pertains to the closed-source frontier models, Anthropic, OpenAI, Gemini, others in the space, Google, they're juxtaposed to the open-source models, which are predominantly being produced out of China. And a lot of what we discussed over the last six months is everything from this AI race to what's happening in the Strait of Hormuz being a proxy war for the U.S. versus China

and this great power struggle in the 21st century. and you have some headlines here out of basically describing some moves that China's been making recently yeah I think it was an interesting week last week you know I don't necessarily have a grand narrative on top of all these but I do think it's connected to to your point kind of the AI race right that's that's the the open source versus closed source race and you know Chinese local competition on you know semiconductor technology trying to catch up to you know leading edge in the west I think that's a key dimension of everything that we're seeing with the OSIS policy toward China. And, you know, I think we got several headlines last week, I think showing

that there is, you know, a building amount of pressure in the Chinese economy. The EU is now moving to be much more restrictive on Chinese imports and then crack down on various elements of the trade relationship. You've got questions over like, are U.S. companies going to find ways to basically build substitutes for Chinese rare earth minerals that have been thought of as, these massive choke points on AI, on defense, on all kind of key industries and growing questions around increased friction of the alternative payment rails that China and Russia have been building for bilateral trade. And I think all of this, it's worth keeping in mind as we kind of move forward on this great power competition. The CEO of Payments Canada, I don't have it on here,

but she also last week had a really good speech I recommend people read. I highlighted in the newsletter, um, where she called, you know, payment rails, uh, basically weapons of economic statecraft. They're weapons of, of political influence. She talked about how, you know, 80% of Canadian cross-border flows route through us correspondent banks. And I think, you know, with, uh, with everything that we're seeing, I think you should expect all of that to be more and more weaponized. And this is a, so as a result, like, I just, I think things like this are worth keeping in mind as, as you consider, um, the U S position vis-a-vis China, what it can leverage and what it can't. Because I think this is going to color, this colors the boundaries

and the constraints that China has in responding to the U.S. and also, you know, the leverage points that the U.S. is going to push on, whether it's AI or tariffs or something else. Sounds like more people are waking up to the thesis that Bitcoiners have been putting out there for quite some time. They can weaponize the payments rails? Who would have thought? You'd think we would have been aware of that in 2022, you know, more broadly after everything happened with Russian assets and the Ukrainian invasion. But it looks like we're going to get further examples of that here over the next year or so. Be prepared. Make sure you have Bitcoin in cold storage. Money that is permissionless that you can always access. It's going to be important

as we move into this crazy world where you have superpowers competing on that competition. Another topic is, okay, China's making their moves. And we've been talking a lot about the industrialization of the united states and you're highlighting the um the ism manufacturing pmi which is over 50. so it seems like the the investment and the spend in the industrial capacity of the us is certainly rising getting more expensive and this tends to be a leading indicator because it's tied to ppi to a certain extent too for for inflation down the road yeah i think there's a there's a ppi element but there's also just like you know we've you can You can see under the red line there, we've been bobbing along basically just under expansion for like since pretty much the rate hiking cycle began at the end of 2021.

You know, we moved down aggressively and by the summer of 2022, we're basically in contraction mode for three full years, essentially on the manufacturing side. And now kind of definitively bobbing our heads above that for the last five months with a recent month on month acceleration in May. So, you know, this aligns, I think, with some other data points we've pointed out over the past couple months, whether it's, you know, freight volumes or, you know, other industrial data points. And, you know, I think that's this is it's not saying that the strategy is necessarily working, that it necessarily will work. But certainly, like the data that you would be looking at to respond to the administration's current policies like thus far directionally are. I think it's interesting because last week we got the GDP print and you actually had Q1 GDP revised down primarily because of investment spending was lower than originally had been forecasted or had been included in the original data set. Which is odd if you, you know, if you were seeing like an industrial renaissance, like you wouldn't want to see like business investment spending being revised down in GDP. So that was kind of a counter indicator.

But, you know, thus far, I think over the last first half of this year, like I think you are seeing, you know, green shoots on the domestic industrial side, which, again, points to all of the activity we just talked about vis-a-vis China. And I think where the administration is trying to, you know, steer the ship right now. Yeah, PMI is one of those one of those indexes that people look at in relation to Bitcoin, say if it's over 50 bitcoins, typically going to do well as a lagging indicator to that. And so on that note, you have other indicators that people like to look at when it comes to Bitcoin. And we had Decode highlighting that each time the copper to gold ratio reclaims its prior low, Bitcoin rallies bottom to top for an average of 20 months, setting projected peak at the end of 2027. So are you calling for a reversal in the Bitcoin price here? I definitively, I don't call bottoms.

I don't call tops. I don't publicly, maybe in the 1031 team chat, I think we've all been known to call bottoms and tops. and super cycles and everything like that. So I'm definitely not calling for any of that. I thought it was an interesting, you know, data point here. Copper to gold is kind of this loose, loosely held relationship that is a very like blunt instrument to think about, you know, where the business cycle is and kind of whether, you know, it's inflecting upward or downward or not.

And so the data set here suggests, as you said, there might be some green shoots in play if you think that this is, you know, it's an N of what, like three. So it's not a super powerful data set, but I think it's directionally interesting to keep in mind and to watch, especially relative to some of the other data we're about to go through. On the flip side, you know, Michael Howell, the kind of liquidity, global liquidity godfather has a view that we might be heading to more bearish territory for liquidity for financial market assets like Bitcoin, because, yeah, you may have, you know, this major industrialization spend, but it's going to be, you know, in his view, drawing liquidity out of financial assets and into a major kind of industrial build out. I would think the kind of pivot point is how accommodative is our fiscal and monetary policy to kind of – can they be accommodative enough to allow all assets to essentially benefit from this upward impulse or is it really going to be kind of net contractionary out of one kind of pool of liquidity into industrial activity? So I think that's a TBD, but with some of the data that we have on the next few slides, I think it's at least worth keeping in mind and watching. Yeah. And the next slide we have here is the amount of Bitcoin in profit versus the amount of Bitcoin in loss. And another historical indicator, again, and of a few data points considering the relative nascency of Bitcoin,

but typically when the total supply of Bitcoin in loss begins to cross with the total supply of Bitcoin in profit, that is typically an area that marks a bear market bottom or consolidation level. And having been in this for 13 years, I will say, just anecdotally, pattern recognition coming in, it does feel like we are at that sort of chop-solidation, low-setting territory. It could last months, could last for the rest of this year, but it feels like that's where we are. Yeah. Yeah, I mean, I think, again, not trying to call a bottom or timing or anything like that, but I think data like this would directionally suggest, and, you know, the same as the next slide, if you want to pull that one up, too, from James Van Straten. And, you know, this would all tell you, like, you're probably closer to the bottom, a lot closer to the bottom than the top. Doesn't mean you can't go lower.

Doesn't mean you can't have like a violent whip down, a final, just absolute capitulation puke. Maybe that's what we've seen over the last couple of weeks. But, you know, having invested in different markets in my career, like the very common like human thing is when something is just constantly going against you. And when it's painful to hold, like you get to a point where you're just like, just get me out of this. Just I don't want to look at this. I'm tired of it. i'm i'm angry at myself for buying way higher like just uh give me out and i'll i'll hold cash right i won't do anything i'll just like maybe i'll rotate the stocks maybe i'll just hold cash but

i gotta get out of this thing and typically when you feel that you know it's the wrong time to sell like you missed it right like don't not financial advice but don't try to ameliorate or correct for the fact that you should have sold whatever if you were if you were going to sell bitcoin yeah you should have sold 125 you should have sold 100 you should have sold 80 well now it's at 60 so don't don't sell to recapture the opportunity to to sell at 100 or whatever right because you missed it so now if you think we're going to zero if you think we're going to 20k and you can buy back cheaper then you know make your call on that um but i think if you look at these last couple charts if you look at sentiment um and everything we've been talking about here you know i think probably

it is fair to say we are closer to the bottom than the top not a bottom call but you do with out what you will yeah and then it's important to pair these technical levels and these indicators with some qualitative fundamental news and i think uh we've gotten that out of the institutions charles swab launches 24 7 bitcoin futures trading on thinkorswim and we have better and coinbase issuing the first crypto backed conventional mortgage and fannie mae really leaning into this i think the last couple slides here you're trying to make the point that uh there's no reason that fannie mae or scott besant needs to be championing bitcoin and broader crypto i would hope it wouldn't be that way but it is there's no reason for them to do

that if they really didn't believe that there's a there there and it's something that's strategic for the u.s yeah totally i mean i think this stuff has caught my eye because i just frankly find it odd relative to having been you know seeing a couple cycles now like you know we We remember like very clearly when 2022 happened, the rapidity with which corporate partnerships or, you know, government interest, like if some of our like portfolio companies or people that we knew in the space had been, you know, building rapport with different government officials or, you know, executives of big public companies or whatever, like the switch just turns off, right?

Once you're into like deep bear market mode, like emails don't get returned, things get put on the back burner. It costs them nothing. It costs like an incumbent, whether it's an incumbent company or, you know, a senator or a governor or whatever, like it costs them nothing to just like put this off for another year. They have 30 other things that are more important to them and more core for them. And if Bitcoin is not like ripping, if it's not making new all time highs and everyone's palpably excited about it, the natural, easy, low friction move is just like, you know, let's put it on hold, guys. We'll revisit it in six months or 12 months or whatever. And, you know, I think with that as a background, like it's very interesting that as price action has just been awful.

like unmitigated, you know, bear market type action for the last six months, basically since October, you've just seen all these initiatives continue to march forward from institutions and people that don't have to be dealing with this. Like Schwab, you know, is a massive, like $13 trillion asset management platform, very old, very, you know, white shoe caters to very mainstream audience, like has absolutely no obligation to continue moving forward with any Bitcoin products. You can easily just table it until next year. You know, Coinbase is obviously very Bitcoin levered, But like better, better, the their partner in the mortgage product like is not, you know, they're not like a giant of the mortgage industry, but they have a totally different business that has nothing necessarily to do with Bitcoin or crypto. Certainly Fannie Mae like could easily, you know, the FHFA could easily table this indefinitely, like it could just go into a black hole and never be thought of again.

You know, who cares what Bill Pulte said? Like they don't they're not under any obligation to do anything with this. And then the last one here that you see on screen is Scott Besson, the Treasury Secretary, right? Like, you know, he was he was teed up with this question, to be clear, by Senator Tim Scott, who is part of the digital assets push. But, you know, with Bitcoin going where it has gone, like there's no meaningful like political credibility that Tim Scott gets from bringing this up. And, you know, Besant could have easily been much more evasive than he was. This is really interesting language if you're trying to, you know, just move on from this. And, you know, that whole Bitcoin thing was was this embarrassing thing that we had to do to to win a voting bloc, to win the election.

But like we plan to never think about this again. like you could easily just completely avoid this right throw your hands up and forget about it and that's not what any of these people or institutions are doing which is like meaningfully different from prior cycles at this time right so you know it's just like uh i just i just have to ask why like what is the reason that you'd be doing this if you did not in this environment if you did not see some kind of ongoing durable benefit trend tailwind that you want to latch on to yeah for those of you who are listening to this not not watching it we have a a quote grab from uh treasury secretary besant's response to tim scott's question which is i couldn't agree

with you more that economic security is national security and part of that is our digital assets initiative the strategic bitcoin reserve is new technology new ground we're making sure we use best practices and things will be durable for the future so they're signaling that they're moving forward with the strategic bitcoin reserve which is very interesting yeah you know you know um we'll see right there there is an executive order on the books there have been you know multiple pieces of legislation suggested to codify it i don't necessarily know exactly what form it will take or how that will happen but this is something again that we could have abandoned long ago like this could have been you know a meme from like late 24 early 25 that no one is

under any obligation to talk about or think about again and so the fact that even in the middle of this awful drawdown that it's still being apparently taken seriously is like interesting at the very least. If I could leave people with one thing, it would be, I would say the show Mindprint Hash with Matt Dines and Cameron Otsuka at Build Asset Management is very underwatched, very underfollowed. I think Matt has a great Twitter follow, has a lot of great Pepe Silvia type takes on the government's interaction over time with Bitcoin. I'm not saying I fully endorse agree with all of them not saying he's right on everything but uh those guys are taking a very uh heterodox view on how things are developing and they're i think identifying a lot of same

headlines that we're identifying and drilling deeply into them so my alpha for the week is go subscribe to that show and go uh follow matt on twitter levered us the us usds usts on x we'll link to it in the show notes we'll be back next week Thank you.