Category: Crypto

What We’re Reading: Bitcoin: A Global Liquidity Barometer

I have been intrigued by the significant increase in global liquidity during 2024, driven by extensive money printing and debt expansion, and how it impacts Bitcoin’s price. 

Bitcoin is an expression against the government’s monetary expansionist policies, so its price follows global liquidity, as seen here on this chart.

It was fascinating to read the recent report by Lyn Alden and Sam Callahan analyzing Bitcoin’s correlation to global liquidity. This further reconfirmed my view that more monetary expansion drives more people to Bitcoin, increasing prices. 

Their rigorous analysis found that over 12-month periods, Bitcoin’s price moves in the same direction as global liquidity a remarkable 83% of the time. This is higher than any other major asset class, making Bitcoin a uniquely pure barometer for global liquidity trends.

The report quantified Bitcoin’s correlation with global M2 money supply, finding a very strong 0.94 overall correlation between May 2013 and July 2024. Bitcoin’s average 12-month rolling correlation was 0.51, while stocks and gold showed moderately high correlations as well in the 0.4 to 0.7 range.

Of course, Bitcoin’s correlation isn’t perfect. Shorter-term breakdowns can occur around crypto-specific events like exchange hacks or Ponzi schemes collapsing.

Supply-demand imbalances also cause temporary decoupling when Bitcoin reaches extreme overvaluation levels during market cycle peaks. Yet despite these breakdowns, the long-term relationship persists. 

Right now, liquidity is soaring to unprecedented levels, suggesting Bitcoin could soon embark on a massive bull run if this relationship holds. While I believe no model perfectly captures Bitcoin’s complexity, recognizing its role as a monetary canary in the coal mine can lend valuable insight. If history rhymes, Bitcoin’s sirens are ringing loudly that a liquidity-driven boom will soon be underway. 

WHERE WE’RE SHOPPING: SLNT

If you’re like me (and you’ve been stacking Bitcoin relentlessly), you’ve probably looked for ways to improve your privacy. 

I’ll admit, it’s a bit of a battle for me. As someone who had a public presence from writing their first article in Bitcoin back in 2013, I don’t have much of a choice – a lot of my personal information is out there, probably forever.

That said, little improvements go a long way (or so they say). At least, they make me feel better about the fact that I’m guarding basically all my wealth with no one to hold accountable but myself these days… 

Anyway, one practical upgrade that I’ve made is to store my Bitcoin hardware devices and seed material in faraday bags, which repulse radiation and block frequencies. I’m not an expert, but I’ve been told this makes the devices harder to tamper with, and as far as additional steps, all you have to do is buy a specific storage bag.

I got my first faraday bags for free with my Casa service (a multi-sig Bitcoin security provider that assists me with my self-custody). (They give out free faraday bags from this cool producer called SLNT for people who sign up, but I’ve bought a few more since then along the way.)

That’s what turned me on to this privacy masterpiece. 

I’ve been in need of a new backpack, and I have to admit, despite the $1,000 price tag, the SLNT Submersible Faraday Backpack has my attention.

SLNT Faraday Backpack (0:05)

Not only does it look pretty sleek, but apparently it can keep your laptop (and any other devices) safe in up to 100 feet of water.

As someone with a constant phobia of plane crashes, it’s tempting. Is this more than I need to protect my hardware devices in transit? Do I need to care about solar flares and EMF radiation?

Maybe not, but given we may be on the cusp of World War III, that’s another reason to skip a stack and buy this right? I mean, it’s the kind of thing I should own as a “bitcoin expert?”

I’ve asked Shinobi if he can make one out of Saran wrap, but alas, this is apparently beyond even his security acumen. Until then, I guess I’m stuck with this on my wishlist.

Because there has to be a reason for me not to buy this right? 

What We’re Reading: HODL15Capital

Follow Nikolaus On X Here

For the past few weeks I have been keeping up with HODL15Capital on X, who has done a tremendous job at posting some of the quickest incoming market data regarding the U.S. spot Bitcoin ETFs. Recently, there have been two charts in particular he has posted that have caught my eye.

Nine months ago, the SEC approved spot Bitcoin ETFs for trading, and since then, the ETFs have seen huge inflows during eight out of those nine months. Since their inception, these ETFs have seen inflows of 312,488 BTC while miners have only created 169,942 new bitcoin.

Number of Bitcoin purchased by 🇺🇸 #Bitcoin ETFs each month👇$IBIT $FBTC $GBTC $ARKB $BITB $HODL $BRRR $EZBC $BTCW pic.twitter.com/mpeurOCUcR

— HODL15Capital 🇺🇸 (@HODL15Capital) October 1, 2024

These ETFs have been the fastest growing ETFs in history, like BlackRock CEO Larry Fink stated, with no real signs of slowing down, especially as we head into a period of time that has been historically bullish for Bitcoin. 

These ETFs are gobbling up all the available BTC leaving many thinking: Who could possibly be selling right now? And according to HODL15Capital, it appears to be smaller BTC holders, selling directly into the hands of the ETFs and institutions.

🚨 Small Bitcoin holders continue to sell to ETFs and $MSTR 🤷‍♂️ pic.twitter.com/hV42fDVlps

— HODL15Capital 🇺🇸 (@HODL15Capital) September 26, 2024

We’re seeing state pension funds, large institutions, wealthy investors and other major players buy and hold shares of these ETFs. Even ETF issuers like BlackRock are buying shares of its own Bitcoin ETF for their other funds. Long story short, I’m seeing smart money pouring into this asset class and, while that is great for the price of BTC, it pains me to watch smaller holders sell their bitcoin directly to the institutions.

Holding Bitcoin over the long term has been proven to be one of the best ways to build wealth. This is a real chance for those interested in investing for their future, who may not currently have proper savings, to start building up wealth in a sovereign way by accumulating BTC and holding the keys to their coins. Instead, these coins are being mostly “locked up” in these ETFs, where those who buy them can only redeem their shares for US dollars and don’t experience the benefits of the attributes that make bitcoin so unique (e.g, freedom to transact globally without permission from a third party).

Based on this data, I fear many of these smaller bitcoin holders are letting a great opportunity to build wealth via holding BTC slip through their fingers. Also, buy not buying bitcoin directly and holding it in self-custody, as opposed to purchasing shares of the ETFs, investors are missing out on what it truly means to own censorship resistant sovereign money. Such a feeling often has the effect of making investors hold bitcoin for the long-term as opposed selling in the short-term based on fear.

The smart money knows exactly what opportunity is here, and they don’t care too much about the freedom aspects of Bitcoin. They’re just filling their BTC bags in a vehicle that suits them better. 

Cheap BTC does not last forever. Major players will continue scooping up huge swaths of shares of the ETFs as we hit a new all time highs and beyond. If there’s one thing I leave you with today: Don’t sell your BTC to the corporations, and hold the keys to your coins.

Company Name: Bitrefill

Founders: Sergej Kotliar + others

Date Founded: 2014

Location of Headquarters: Stockholm, Sweden

Amount of Bitcoin Held in Treasury: Undisclosed

Number of Employees: 76

Website: https://www.bitrefill.com/

Public or Private? Private

Since 2014, Bitrefill has been helping users spend their bitcoin and other cryptocurrencies on everything from gift cards to mobile phone top ups to eSims.

One might think that, after a decade, the company’s leadership has uncovered the secret to growing Bitrefill with relative ease. However, one of Bitrefill’s co-founders and its CEO, Sergej Kotliar, says that the company still faces a number of challenges in broadening its user base.

“The main difficulty continuously in our company is finding customers,” Kotliar told Bitcoin Magazine.

“It’s difficult because it’s still a niche. Especially people who use some kind of internet money in a wallet app on a regular basis is some small percentage or even a fractional percentage spread out across the world,” he added, referring to the less than 10% of the world’s population that owns crypto, and even fewer who use it regularly.

“You need to figure out how to reach them.”

While Kotliar and the team at Bitrefill may not yet have reached every potential customer out there, they’ve learned a lot about what to do and what not to do to keep a crypto company alive through multiple bitcoin epochs.

In my conversation with Kotliar, he shared with me some of the lessons he’s learned.

Lesson 1: Don’t Believe The Hype

Kotliar claims that one of the biggest illusions in the bitcoin and broader crypto space is that communities of crypto enthusiasts and users are bigger than they actually are. This becomes particularly dangerous when founders of crypto startups get lured into believing the hype on social media about their company.

“There is definitely a phenomenon where a startup launches, they get cheers on Twitter, they very quickly sort of manage to convey their message and their value proposition to that audience who might be inclined to use their thing and are able to convert them — and then they hit the wall,” explained Kotliar.

“The people that they acquired in that way are also very opinionated, which makes it difficult to go outside of that group. Companies get stuck because they become captured by their initial audience, which, in the best case scenario, are customers, but, in the mid scenario, are just fans — people on Twitter that don’t really need whatever the company is offering,” he added.

For this reason, Kotliar focuses less on what people have to say about Bitrefill on social media and more on providing the best possible customer experience.

This includes constantly adding more items and services people can purchase with bitcoin and crypto via the site as well as developing new products like the Bitrefill Card, which lets users spend their crypto just like a traditional debit card lets users spend fiat.

According to Kotliar, avoiding the crypto echo chamber and focusing on solving real problems for customers has been key to his company’s success.

Lesson 2: Stay Alive — Without Requiring VC Funding

Bitrefill has survived for 10 years because it’s capable of standing on its own two feet financially, without requiring repeated doses of venture capital funding to remain afloat.

“There are companies that are default dead, and there are companies that are default alive,” he explained.

“This means if the current trajectory continues, is it going to be a dead company with no extra funding or is it going to be a live company? When you reach that ‘we’re default alive’ point, it lets you focus more on the things that matter and less on the things that will attract investment,” he added.

Kotliar went on to share that “things that attract investment in our industry often are not necessarily the things that require customers,” alluding to the fact that hype tends to drive investment in the crypto space more than a company meeting certain qualitative standards.

Focusing on the things that matter, like helping customers easily spend their crypto on gift cards for almost anything as well as other services, has been essential in keeping Bitrefill in business for ten years, despite the inherent waves of volatility in the Bitcoin and crypto space.

Lesson 3: Ride The Waves And Learn To Swim

One of the secrets to surviving as a Bitcoin or crypto company is learning how to keep a business afloat during market downturns. It’s easy for crypto companies to keep their doors open and even thrive when the bull market is in full swing, but only the strong survive when the bear market comes around.

“During a bull market, we grow very rapidly, and during the bear market, we manage to stay flat,” Kotliar explained.

“A lot of companies in our industry, in a bear market, will go under and fire people. We’re not like that, but it definitely takes a lot of swimming to remain in the same place,” he added.

The fact that Bitrefill serves customers in over 180 different countries also helps to keep it alive, as new waves of adoption happen in different countries at different times for a variety of different reasons.

Kotliar says Bitrefill often experiences “regional waves” of adoption.

“There’s currently a wave going on in Argentina,” he said. “There is this 30% tax on foreign transactions, and so some Argentinians are using Bitrefill to buy games and stuff like that to avoid the 30% tax.”

Lesson 4: Be Where The People Are (Or Where They Might Be)

Despite the fact that Bitcoin and crypto have become more mainstream in the 10 years that Bitrefill has existed, Kotliar comes back to the point that to be successful as a company you have to aim to serve everyday people versus solely the Bitcoin enthusiast.

“The world doesn’t care,” said Kotliar about Bitcoin ideology.

“In the Bitcoin world, some parts of it care more about which features you don’t offer as opposed to which features you do offer, which is strange. Nobody would go to a store and be like, ‘Hey, you also sell this stuff!’” said Kotliar, referring to the notion that some Bitcoin enthusiasts have taken issue with the fact that Bitrefill accepts other cryptocurrencies.

Kotliar argues that users tend to be indifferent to what other technologies do and don’t offer, so long as they serve the purpose they need them to serve.

“You seem to care about the Riverside [FM],” said Kotliar, referring to the app I used to record my interview with him, “but I don’t know if you would go to a conference about it or get into an argument with someone over a feature that it has or maybe a feature that it should not have.”

He went on to explain that Bitrefill accepts different cryptocurrencies for different reasons, one of which is meeting the consumer where it’s at, a core tenet of Kotliar’s approach. He shared that the core of Bitrefill’s strategy is getting the product in front of people who otherwise wouldn’t seek something like it out. He wants people to stumble upon it, which he claims “doesn’t always happen by itself.”

“The big takeaway is that it’s not enough to be at the Bitcoin conference,” he said. “You need to be in where people are, especially the people that do not particularly care about Bitcoin.”

Lesson 5: Listen, Don’t Speak

Some of Bitrefill’s growth has been fueled by its being receptive to feedback from users.

“We get a lot of feedback, and we have all kinds of channels open,” said Kotliar. “I think that the main function of marketing is actually to listen more than to speak.”

Kotliar also noted that this process requires some discretion.

“We try to listen in every channel, but then also try to figure out — to sift,” he explained, pointing out the company gets its fair share of messages from people pushing certain tokens.

“[We] find out what the real requests are, and if you get enough real requests, you get a sense that this is real,” he added, referring to the suggestions that the company ends up taking seriously.

What’s Next For Bitrefill?

After 10 years, Bitrefill’s mission remains the same: focusing on what best serves customers (and ignoring the noise in the process).

“We have a whole team now that’s working on adding gift cards,” said Kotliar, “and we’re still putting a lot of effort into the Bitrefill Card.”

While Kotliar believes that Bitrefill is “the best in the world at everything Bitcoin payment related,” he and his team are currently looking into adding functionality for stablecoins on Lightning.

Other than that, it’s business as usual at Bitrefill.

“Our aim is to be the, you know, the one stop shop for everything day to day usage of cryptocurrency in the real world,” said Kotliar.

“That’s where we’re putting our attention.”

WHO WE’RE FOLLOWING: Wicked Bitcoin

It’s 2024 and there’s a new mystery surfacing around Bitcoin’s creator Satoshi Nakamoto.

In this case, discussion of a new enigma first surfaced on X, where everyone’s favorite ch-artist Wicked Bitcoin posted the discovery.

Essentially, the finding boils down to this:

It’s clear that Satoshi Nakamoto was an early Bitcoin miner – after all, he sent bitcoins to early contributors, and since he didn’t set himself up with a sweet “founder’s allocation,” they could have only come from mining.

That said, we don’t really know how many bitcoins Satoshi mined. (He never commented on it publicly, aside from one reported instance where he claimed to “own a lot” of bitcoins.) Most of what’s “common knowledge” is from one study done in 2013, and while it’s become something like lore, there’s a lot of dispute about what it proves.

Essentially, the study suggested Satoshi’s mining activity was visible on the blockchain via what’s been called the “Patoshi pattern.” Long story short, an early, very large miner changed the way they embedded data on the blockchain (via a non-standard iteration of the ExtraNonce), and most believe that this could have only been done by Nakamoto (who knew the most about the software in its infancy).

Jameson Lopp (co-founder of Casa) built on this work in 2022. He added new analysis about this mystery miner, including the finding that they weren’t seeking to maximize their profitability. Some felt this was another strong data point Patoshi was Satoshi.

Now, Wicked is adding to the mystery, one that alludes to earlier “Patoshi” analyses. Essentially, by plotting this miner’s blocks on a date-time axis, he finds that there’s a notable gap in the timestamps of this miner’s blocks in early 2009.

Of course, as to what we can conclude from this data, as Wicked’s comments section shows, that’s up for debate.

Adding to the issue is that here is a dearth of historical information about Bitcoin from 2009. What’s been uncovered amounts to a few public email lists and private correspondences that have been published over the years (some forced by court hearings).

As far back as May-June 2009, there were no Bitcoin forums, and it’s possible there could have been only a dozen people mining the network. Martii Malmi, (Satoshi’s first real righthand developer) would have only just been starting his work.

This means that we don’t really have a concrete timeline or what occurred and why besides what’s visible by looking at the data, and there, there isn’t even that much to discuss – there were many days in 2009 where there weren’t any Bitcoin transactions.

Wicked’s thesis here is that the above gaps show instances where the “Patoshi miner” went offline, and then had to restart operations. At this point, the miner was so powerful that they simply overwrote any blocks found by other miners in their absence.

Wicked draws a few conclusions from this, going so far as to suggest Satoshi may have been testing how well the network held up to “51% attacks.” This would be plausible – after all, the idea that Bitcoin was robust enough to operate as long as a majority of participants were honest was his major contribution to digital cash as a concept.

(Really, you could argue (as I have) that’s the only thing Satoshi brough to Bitcoin that was new, his primary skill taking hardened computer science concepts and stitching them together.)

That said, there’s a bit of a bearish read here. An accidental 51% attack would have still made honest mining moot, and this could be fodder for critics who like to paint Satoshi as the kind of errant experimenter we see on other chains today. 

Still, there’s a lot of conjecture here, and without more analysis (or more corroborating evidence) it’s hard to draw a firm conclusion. 

At any rate, we can marvel at the mystery that nearly 16 years later, Satoshi has succeeded so well in hiding his tracks from history. 

Follow Aaron on Nostr or X.

It’s difficult to find a more fundamental threat to Bitcoin’s continued existence than mining centralization. If —say— there are only a few mining pools, there is a very real possibility that these organizations face regulatory pressure of the kind that exchanges have also had to deal with: they could be forced to only include KYC’ed transactions into blocks. Since censorship resistance is arguably its core value proposition, I seriously doubt that Bitcoin would, in this scenario, have much long-term viability at all.

To that end, it was great to see Ocean launch DATUM (Decentralized Alternative Templates for Universal Mining) this weekend. Similar to Stratum V2 (implemented by Demand Pool), DATUM allows miners (or: “hashers”) to select the transactions they include in the blocks they find, while still splitting the block reward with other users of the pool. In other words, hashers get the benefit of pooled mining, without having to outsource transaction selection to the Ocean pool operators, thus making it more difficult to apply regulation. (It’s much easier to regulate a few big businesses —mining pools— in a handful of jurisdictions, than it is to regulate many smaller businesses and individuals —hashers— from around the world.)

Of course, the adversarial mindset will recognize that this doesn’t in itself solve the problem of mining centralization in its entirety. Most obviously, draconian lawmakers could ultimately just ban this type of pooled mining altogether. Besides, it’s not really clear that there is a demand from hashers to construct their own blocks in the first place– though that might of course quickly change if and when there in fact is regulatory pressure that stops pools from including certain transactions in blocks. (And Ocean is providing an incentive for hashers to select their own transactions by cutting fees for those that make use of the new feature.)

Either way, DATUM is an important step in the right direction. If nothing else, it should take away a lot of the concerns of Ocean themselves refusing to include certain “spam” transactions in their blocks: now every hasher can decide for themselves what transactions they do and do not want to include.

The more difficult it is to thwart Bitcoin’s censorship resistance, the brighter Bitcoin’s future looks.

Lebanon is back in the headlines as the conflict in the Middle East intensifies. Before these latest developments, Lebanon had already become a symbol of how quickly a seemingly stable society can descend into chaos.

If you follow major events in the global economy, you’ll probably recall that Lebanon’s recent past serves as a vivid example of what a full-blown currency collapse looks like in a modern, advanced economy. While there are some great books that describe hyperinflation in detached, academic terms, what’s often missing is the human story – what it’s actually like to be a normal, productive person with a family and a bank account, and to live through the collapse of your country’s currency.

For a while now, I’ve known that my friend Tony Yazbeck, co-founder of The Bitcoin Way, had experienced this reality. But it wasn’t until I watched this interview with him that I realized how valuable his story is for everyone to hear. Tony’s story offers a rare, personal glimpse into what it means when your country’s banking system disintegrates, when you lose access to your savings, when food prices rise 10-fold in a few months, and when even basic necessities like medicine and fuel become luxuries.

I asked Tony if he could explain not only why Lebanon collapsed, but also how bitcoin could have been a lifeline in such a dire situation.

Lebanon: A country on the brink

Before its economic collapse, Lebanon was a vibrant, cosmopolitan country, often called the “Paris of the Middle East.” Its economy thrived on banking, tourism, and services, positioning it as a bridge between East and West. For Tony, this prosperity wasn’t an illusion—it was his daily life. “My life in Lebanon was extraordinary,” he recalls. “I ran three thriving businesses and lived a luxurious lifestyle. Whether it was the latest cars, the best restaurants, or the hottest clubs, Beirut had it all.”

Yet beneath the surface, cracks were forming. Lebanon’s banking sector, once a source of pride, was built on unsustainable practices, and the country was drowning in debt. For years, Lebanon’s central bank had pegged the Lebanese pound to the U.S. dollar at an artificially high rate, creating a false sense of stability.

This currency peg required constant inflows of dollars to maintain. When those inflows dried up, the house of cards collapsed.

In 2019, Lebanon’s banks began restricting access to savings, imposing informal capital controls without any legal framework. “Overnight, people lost access to their funds,” Tony says. “You couldn’t withdraw your own money, and even if you could, it was in Lebanese pounds that were rapidly losing value.”

For those unfamiliar with a currency crisis, the limitation of bank withdrawals is one of the first signs that the system is failing. The government and banks try to delay the inevitable by locking dA look at the lived experience of going through hyperinflation in Lebanon.own money in the system. By then, it’s too late.

From thriving businesses to $70 in hand

In early 2020, Lebanon defaulted on its foreign debt, and the value of the Lebanese pound plummeted. Hyperinflation set in, destroying the purchasing power of ordinary people.

Tony watched helplessly as his savings evaporated and his businesses crumbled. “I went from being a successful entrepreneur to having just $70 to my name in what felt like the blink of an eye,” he recalls. “I couldn’t pay rent, school fees, or even afford basic groceries.”

Hyperinflation took hold with shocking speed. “A loaf of bread that once cost 1,500 LBP shot up to over 30,000 LBP within months,” Tony explains. Fuel prices were even worse. “In early 2023, a gallon of gas went from 25,000 LBP to over 500,000 LBP in just a few weeks. It was impossible to keep up with the prices.”

The destruction wasn’t limited to material wealth; the psychological toll was immense. Tony describes the anxiety and panic that came with watching his hard-earned success disappear. “For the first time in my life, I didn’t know what to do. I felt completely helpless.”.

A fractured civil society

As Lebanon’s currency collapsed, so did its social fabric. People who once lived comfortable, middle-class lives suddenly found themselves struggling for survival. Basic goods became scarce, and the price of everyday items skyrocketed.

Power dynamics within communities shifted as those who controlled essentials like food and fuel gained disproportionate influence. “There were reports of gangs taking over neighborhoods, controlling access to goods and demanding protection fees,” Tony recalls.

Even electricity became a luxury. With the national grid in shambles, most people had to rely on private generators, but the cost of running them was astronomical. “Monthly generator fees jumped from 200,000 LBP to over 4,000,000 LBP,” Tony explains. Many families were forced to live without power for long stretches of time.

In response to the crisis, people turned to alternative forms of exchange. Bartering became common, with people trading goods and services directly. “If you couldn’t pay in cash, you might offer plumbing work in exchange for groceries,” Tony says. The U.S. dollar, already widely used before the collapse, became the default currency for many transactions. Digital currencies, and especially stable coins like Tether (USDT), also gained traction as people sought ways to preserve value outside the collapsing banking system.

What could have been: Bitcoin as a lifeline

As Tony recounts the collapse, questions loom large: Could this have been prevented? Or at the very least, could individuals have somehow protected themselves better? For Tony, the answer is clear: Yes – with access to bitcoin, many of the worst effects of the crisis might have been avoided.

“If I had known about bitcoin before the crisis, it could have saved me,” Tony says without hesitation. “Bitcoin would have given me a way to store value outside the banking system, which completely failed. I wouldn’t have been locked out of my own savings, and I could have preserved my wealth as the Lebanese pound collapsed.”

Bitcoin is immune to the kind of capital controls Lebanon’s banks imposed in 2019. No government or bank can freeze your bitcoin or restrict access to it. In a country where the banking system became a trap, bitcoin would have provided a way out.

Even as Lebanon’s currency lost over 90% of its value, bitcoin held its purchasing power globally. “Bitcoin isn’t tied to any government or central bank, so it can’t be manipulated the way the Lebanese pound was,” Tony explains. “It’s a hedge against hyperinflation, which would have been critical when prices were doubling and tripling every few months.”

Bitcoin’s status as a digital bearer asset would have been equally important. “When cash becomes worthless and banks stop functioning, how do you pay for things? How do you trade?” Tony asks.

In Lebanon, bartering and informal exchanges became necessary for survival. In many situations, bitcoin may have served as a viable alternative to barter, worthless Lebanese pounds, and U.S. dollars that were difficult to obtain.

Lessons for the world

Lebanon’s crisis offers a stark warning to the rest of the world. While many people in developed countries believe that their economies are too stable to collapse in such a way, Tony’s experience should give us pause. “What happened to me could happen anywhere,” he warns. “Don’t think you’re immune just because you live in a so-called stable country. The mechanics of fiat currency are the same everywhere.”

Tony points to the U.S. as an example of a country that is walking the same dangerous path as Lebanon. “The U.S. national debt now exceeds $35 trillion. Since 1971, when the dollar was taken off the gold standard, the money supply has increased by over 8,000%. That kind of money printing can’t go on forever.”

While the U.S. benefits from being the issuer of the world’s reserve currency, that status isn’t guaranteed indefinitely. “All fiat currencies are headed to zero eventually,” Tony cautions. “Some will fail sooner than others, but they will all fail. The U.S. dollar might be the last to go, but its turn is coming.”

The lessons from Lebanon’s collapse are clear: Protect your wealth before a crisis hits, and don’t assume that your government or banking system will be there to save you when things go south. For Tony, that means turning to bitcoin. “Bitcoin is the only asset that’s truly un-confiscatable,” he says. “It’s the only way to escape a broken system.”

A new mission to rebuild with bitcoin

In the aftermath of Lebanon’s collapse, Tony has dedicated his life to helping others avoid the same fate. He founded The Bitcoin Way, a bitcoin education and technical services business designed to teach people how to use bitcoin to protect themselves from currency crises. “The crisis forced me to study and understand money,” Tony says. “I realized that the fiat system is a scam, designed by thieves to steal and control us. Bitcoin is the solution.”

Every day, Tony educates his clients about how to take control of their financial future using bitcoin. “Once you understand how bitcoin works, you see the flaws in traditional fiat systems,” Tony explains. “You learn how to manage your assets securely, make transactions independently of banks, and protect your wealth from inflation and economic instability.”

The road ahead

Tony believes that the collapse of the Lebanese pound was avoidable, but that would have required structural reforms that never came. “If Lebanon had tackled corruption, maintained transparency, and adjusted the currency peg responsibly, things might have turned out differently,” he says.

But given the deep-rooted corruption in Lebanon’s political and financial systems, the collapse was almost inevitable.

As Tony reflects on his experience, he sees parallels between pre-crisis Lebanon and the current state of many developed economies. “We’re seeing the same issues – rising debt, unsustainable monetary policies, and corrupt institutions,” he says.

The warning signs are there, but many people ignore them, believing that their country is somehow different.

For those who are paying attention, Tony offers practical advice. “Start educating yourself about bitcoin now, before it’s too late,” he urges. “Diversify your assets and don’t rely on fiat currency to preserve your wealth. The mechanics of hyperinflation don’t change just because you live in a wealthy country.”

Lebanon’s collapse is not just a cautionary tale for people living in developing economies. It’s a wake-up call for the entire world.

As governments continue to print money at unprecedented rates, the risk of a global currency crisis grows. Bitcoin offers a way out – an inflation-proof alternative that can protect the wealth of individuals when fiat currencies fail.

Tony’s experience is a stark reminder of the fragility of fiat systems and the importance of financial sovereignty. “With bitcoin in your custody, you have the power to protect yourself from corruption, manipulation, and inflation,” Tony says.

“You don’t need permission from a bank or a government to manage your own money. And that’s exactly what makes bitcoin the ultimate tool for financial freedom.”

This is a guest post by Dave Birnbaum. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

WHAT WE’RE READING: Business Insider

Follow Nikolaus on X

Business Insider published a new report today on where Bitcoin currently stands in regards to the upcoming U.S. presidential election, with exactly what you would expect from a left leaning mainstream media outlet. The article states that “Trump and Harris have different reasons to try to attract the crypto community”, and while I agree it is true that it would be good for both candidates to win over this vote, only one of them has actually put in the work to do so.

The article begins by noting how Bitcoin, and cryptocurrency at large, is not at the top of the list of priorities for most voters nationwide, which I actually believe to be true. Earlier this summer I got the opportunity to attend the Republican National Convention (RNC) in Milwaukee, Wisconsin, and even there after everything Trump had said about supporting this industry, there was no broader discussion going on about it amongst anyone there really. There was also no discussion on it at the Democratic National Convention (DNC). Most voters do care about more prominent issues such as the illegal immigration problem, inflation, crime, and more. But I think this does appear to be changing, in more ways than they may think.

Business Insider continues the typical mainstream media narrative that this industry is just a bunch of “crypto bros” and how “maybe” the vote of a “dogecoin-loving guy” in a swing state might be important in deciding the upcoming election. They then flip flop and joke about just because someone might own $50 worth of Bitcoin, that it won’t play a factor in them deciding on who to vote for in this upcoming election. But they fail to recognize two important factors that negate their jabs at the industry.

Bitcoin has officially crossed the chasm and is now backed by traditional financial institutions, including BlackRock, Fidelity, etc. BlackRock is the world’s largest asset manager, and they’re not here to play around like the “crypto bros” Business Insider suggests. They’re here to make money, and their spot Bitcoin ETFs have been the fastest growing ETFs in history. The customers of their ETFs range from all different classes of investors, who also want to see this asset class soar. These large asset managers are amassing an army of new Bitcoin holders who come from traditional financial backgrounds, and I’m sure will want to make their voices heard this November.

Also, earlier this year, CNBC reported that half of Americans have $500 or less in their savings account, and 60% have $500 or less in their checking accounts. Americans have a savings problem, as CNBC noted, “The lack of cash in either savings or checking accounts suggests that many Americans are living paycheck to paycheck.” Everyone has to start saving from somewhere, and those with $50 worth of BTC will vote for who will advance their best interests, like building up their financial savings. So holders of BTC should not be written off because of the amount of BTC they may own when it comes to voting. 

So far, only Donald Trump has put in the effort to appeal to this group of voters. Former presidential candidate Robert F. Kennedy Jr. had also pledged to support the Bitcoin industry, but he dropped out to support Trump. Trump has gone above and beyond to earn the support of the Bitcoin and broader crypto industry, including speaking at the Bitcoin conference in Nashville earlier this summer, promising to help BTC miners get all the electricity they need for mining, promising to build a strategic stockpile of BTC for the country’s reserves, and so much more.

Meanwhile, Kamala Harris has said literally nothing on the Bitcoin industry let alone support it. She declined to speak at the same Bitcoin conference in Nashville this past summer, and has not added Bitcoin into the Democratic party platform like the Republicans did. She has attacked the Bitcoin industry non-stop since getting into office with Joe Biden almost four years ago. Business Insider touches on her lack of comments on Bitcoin, but attempts to frame it in a more bi-partisan way, as if she is going to support the industry in a similar fashion as to Trump.

And this is where I disagree with many when it comes to this issue. I believe Bitcoin is 100% a partisan issue in this country. I watch all the senate and congressional hearings when it comes to Bitcoin related topics, and witness how the majority of Republicans vote in favor of Bitcoin, while the majority of Democrats vote against it. Democrats vote in favor of central bank digital currencies (CBDC) while most Republicans vote against CBDC. There is a clear dividing line, being further proven by Trump being heavily pro-Bitcoin and Kamala being reluctant to support the industry.

If Kamala wanted to support the industry, she would have taken the time to do so by now. She has yet to even say the word Bitcoin publicly. She did say she would support “blockchain” in a recent speech, but based on her previous years of hostility, and the general directions Democrats vote, one can only assume she means CBDC and not supporting Bitcoin. A few times over the course of the last few months, Harris’ campaign has hinted at potentially supporting the industry, but has not acted on it in any way, leaving more empty promises.

Which leaves me to believe that if she wanted to support this industry, she would have by now — no excuses. Trump went to PubKey, a Bitcoin themed bar in NYC, purchasing almost $1,000 worth of burgers and drinks for everyone there using the Bitcoin Lightning Network, just a couple days after an assassination attempt on him. If Trump can do that, and Kamala can’t even get in front of a microphone and camera and say the word Bitcoin, then it is clear what their stances on the matter are.

After explaining all of Kamala’s shortcomings in supporting the Bitcoin industry, Business Insider ends the article by stating that “What Harris or Trump will actually do on crypto is unclear, but that’s not really the point right now.” This is pure gas lighting, considering Trump has put forth clear policies on the matter, while Kamala has not. And since she underperformed him in attempting to win over this vote, they try to pivot to suggest ‘oh that’s not really the point right now, that’s not what matters’. But it is what matters. It is reported that there are over 50 million people in the U.S. who own Bitcoin and crypto, they are spread out all across the country, and want their interests advanced this November. While Bitcoin is not near the top of the list of priorities for the average American, it is for those interested in this asset class. This ever growing voter bloc is dedicated to their cause and they are not willing to budge on the issue. 

So far, only Trump has taken the effort to support and get involved in this industry, while Kamala seems like she couldn’t care less about it.

Maximizing Bitcoin Gains with ETF Data

Since the introduction of Bitcoin Exchange Traded Funds (ETFs) in early 2024, Bitcoin has reached new all-time highs, with multiple months of double-digit gains. However, as impressive as this performance is, there’s a way to significantly outperform Bitcoin’s returns by utilizing ETF data to guide your trading decisions.

Bitcoin ETFs and Their Influence

Bitcoin ETFs, launched in January 2024, have quickly amassed large amounts of Bitcoin. These ETFs, tracked by various funds, allow institutional and retail investors to gain exposure to Bitcoin without directly owning it. These ETFs have accumulated billions of USD worth of BTC, and tracking this cumulative flow is essential for monitoring institutional activity in Bitcoin markets, helping us gauge whether institutional players are buying or selling.

Figure 1: BTC ETF Cumulative Flows (USD) have surpassed $18.5b. View Live Chart 🔍

ETF daily inflows denominated in BTC indicate that large-scale investors are accumulating Bitcoin, while daily outflows suggest they are exiting positions during that trading period. For those looking to outperform Bitcoin’s already strong 2024 performance, this ETF data offers a strategic entry and exit point for Bitcoin trades.

Figure 2: BTC ETF Daily Flows (BTC) show regular accumulation of over 10,000 BTC per day. View Live Chart 🔍

A Simple Strategy Based on ETF Data

The strategy is relatively straightforward: buy Bitcoin when ETF inflows are positive (green bars) and sell when outflows occur (red bars). Surprisingly, this method allows you to outperform even during Bitcoin’s bullish periods.

This strategy, while simple, has consistently outperformed the broader Bitcoin market by capturing price momentum at the right moments and avoiding potential downturns by following institutional trends.

Figure 3: Each trade following this institutional inflow/outflow strategy.

The Power of Compounding

The real secret to this strategy lies in compounding. Compounding gains over time significantly boosts your returns, even during periods of consolidation or minor volatility. Imagine starting with $100 in capital. If your first trade yields a 10% return, you now have $110. On the next trade, another 10% gain on $110 brings your total to $121. Compounding these gains over time, even modest wins, accumulate into significant profits. Losses are inevitable, but compounding wins far outweigh the occasional dip.

Since the launch of the Bitcoin ETFs, this strategy has provided over 100% returns during a period in which just holding BTC has returned roughly 37%, or even compared to buying Bitcoin on the ETF launch day and selling at the exact all-time high, which would have returned approximately 59%.

Figure 4: Over 100% compounded gains since ETF launch following this strategy.

Can Further Upside Be Expected?

Recently, we’ve begun to see a sustained trend of positive ETF inflows, suggesting that institutions are once again heavily accumulating Bitcoin. Since September 19th, every day has seen positive inflows, which, as we can see, have often preceded price rallies. BlackRock and their IBIT ETF alone have accumulated over 379,000 BTC since inception.

Figure 5: BlackRock alone has accumulated over 379,000 BTC in just a few months. View Live Chart 🔍

Conclusion

Market conditions can change, and there will inevitably be periods of volatility. However, the consistent historical correlation between ETF inflows and Bitcoin price increases makes this a valuable tool for those looking to maximize their Bitcoin gains. If you’re looking for a low-effort, set-it-and-forget-it approach, buy-and-hold may still be suitable. However, if you want to try and actively increase your returns by leveraging institutional data, tracking Bitcoin ETF inflows and outflows could be a game-changer.

For a more in-depth look into this topic, check out a recent YouTube video here: Using ETF Data to Outperform Bitcoin [Must Watch]

The judge in the Tornado Cash case delivered an oral ruling today, rejecting both the Defense’s motion to compel discovery and their motion to dismiss the charges. This represents a massive setback for the Defense, and the judge’s reasoning may not bode well for developers and projects going forward.

Motion to Compel

The Defense’s motion to compel discovery sought to access a broad range of government communications, including exchanges with foreign authorities under the Mutual Legal Assistance Treaty (MLAT) and with domestic agencies like the Office of Foreign Assets Control (OFAC) and the Financial Crimes Enforcement Network (FinCEN). Citing Federal Rule of Criminal Procedure 16, the Defense argued that these materials were essential to understanding the government’s case and could potentially include exculpatory evidence. The judge, however, made it clear that Rule 16 imposes a stringent requirement: the Defense must show that the requested information is material to their case, not merely speculate on its potential usefulness.

The court dismissed the Defense’s arguments as speculative, noting that references to what the information “might” or “could” reveal do not meet the necessary standard for materiality. For example, the Defense argued that MLAT communications with the Dutch government might shed light on the evidence against Tornado Cash or reveal the government’s investigative theories. The judge found this reasoning unpersuasive, emphasizing that materiality cannot be established through conjecture or vague assertions.

The court similarly rejected the Defense’s request for all communications between the government and OFAC and FinCEN. Although the Defense claimed these documents were necessary to understand the government’s theories and potential witnesses, the judge concluded that the Defense failed to demonstrate how these communications were directly relevant to the charges at hand. The court reiterated that the burden is on the Defense to show a specific link between the requested documents and their defense strategy, a burden they did not meet.

When the Defense suggested an in-camera review—a private examination by the judge of the requested documents—to determine their materiality, the court refused. The judge argued that granting such a request based on speculative assertions would set a dangerous precedent, effectively forcing in-camera reviews in all criminal cases when a defendant speculates about the relevance of certain documents. This, the judge stressed, would undermine the purpose of Rule 16 and transform the pretrial discovery process into an unrestrained search for potentially helpful evidence.

The Defense also raised concerns under Brady v. Maryland, arguing that the government might be withholding exculpatory or impeachable evidence. While the court acknowledged the government’s obligations under Brady, it found no indication that these duties had been neglected. Without concrete evidence suggesting the government was withholding information, the court saw no reason to compel additional disclosures. The judge cautioned that while the Defense’s arguments were theoretically possible, they lacked the factual support needed to warrant the court’s intervention. She did say, however, that if she later finds that the government has “interpreted its obligations too narrowly” then there will be “unfortunate consequences for their case.”

Motion to Dismiss

The motion to dismiss presented a much more significant set of issues. Central to the Defense’s argument was the definition of a “money transmitter” under the Bank Secrecy Act (BSA). The Defense contended that Tornado Cash did not qualify as a money transmitter because it did not exercise control over users’ funds; it merely facilitated the movement of cryptocurrencies. The court, however, rejected this narrow interpretation. The judge clarified that the BSA’s scope does not require the control of the funds; Tornado Cash’s role in facilitating, anonymizing, and transferring cryptocurrency was sufficient to bring it within the statute’s ambit. The judge likened Tornado Cash to custodial mixers, which have been deemed money transmitting businesses.

Further complicating the Defense’s argument was their reliance on the 2019 FinCEN guidance, which uses a four-factor test to determine whether a wallet provider is a money transmitter. The Defense claimed this guidance, which includes a “total independent control” standard, should apply to Tornado Cash. The court disagreed, stating that this standard is specific to wallet providers and does not extend to mixers like Tornado Cash. Consequently, Tornado Cash’s lack of “total independent control” over funds was irrelevant to its classification as a money transmitter.

Another key point in the court’s analysis was the distinction between expressive and functional code under the First Amendment. The Defense argued that prosecuting Storm for his involvement with Tornado Cash was tantamount to punishing him for writing code, which they claimed was protected speech. The judge acknowledged that while code can be considered expressive, the specific use of code to facilitate illegal activities—such as money laundering or sanctions evasion—falls outside the bounds of First Amendment protection. The judge emphasized that the court must focus on the conduct enabled by the code, not merely the code itself. Even under intermediate scrutiny, which applies to content-neutral restrictions on speech, the judge found that the government’s interests in preventing money laundering and regulating unlicensed money transmission justified the restrictions imposed by the relevant statutes.

The court also addressed concerns about the immutability of Tornado Cash’s smart contracts, an issue raised by both parties. The judge acknowledged the existence of a factual dispute but noted that it was not a decisive factor in the current motion. However, the issue of immutability may play a role at trial in determining the extent of Storm’s control over the service and his responsibility for its operations.

In concluding remarks, the judge underscored that while the use of code to communicate ideas may be protected under the First Amendment, using that code to facilitate illegal activities is not. This distinction is critical in the context of emerging technologies like blockchain, where the line between speech and conduct can be blurred. The court’s ruling serves as a reminder that the legal system is prepared to hold participants in the digital economy accountable, even as it grapples with the complexities of applying traditional legal principles to new and evolving technologies.

The full transcript of the ruling will be released once prepared by the court reporter.

This is a guest post by Colin Crossman. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.