BITCOIN TODAY

The Spaces brought together Eric (host), co-hosts Terrence and Lauren, and guests including Fred Krueger, G Money, Thomas, Small Cap, Robert, Prescott, Dom, Taylor, Bad Dog, TC, Puncher, Bram and others to dissect Bitcoin across custody, mining, macro, metals, and adoption. A core thread contrasted self-custody sovereignty versus financialization via ETFs and institutional products (BlackRock, MicroStrategy), with most speakers endorsing self-custody yet acknowledging custodial rails can boost price and adoption. Mining took center stage: a sharp hashrate drop was linked to winter storms and a downward difficulty adjustment, grid curtailment, and economics ranging from 5–11¢/kWh; TC flagged 12-minute average blocks and a potential ~16% difficulty drop. Macro analysis focused on likely rate cuts, housing affordability, and dollar policy: Rick Rieder (BlackRock) was discussed as a potential Fed chair, the DXY’s downtrend, BOJ and US Treasury (Scott Bessent) rate checks on USD/JPY, and risks from a yen carry unwind, repatriation, and currency wars. On metals, Fred compared silver’s market cap to Bitcoin and forecast BTC overtaking silver; others argued metals are physical-era assets while Bitcoin is native to a digital, energy-linked economy. Adoption was framed as power-law (slow users, faster price), with nation-states mining and eventual central bank reserve inclusion. The room closed with practical guidance: keep accumulating, self-custody, educate newcomers (including ETF buyers), monitor difficulty and macro signals, and build on Bitcoin’s layers.

Bitcoin Today – Comprehensive Notes and Analysis

Participants and roles

• Eric (host): Bitcoin miner and self-custody advocate; led discussion across mining, energy, macro, and adoption.
• Terrence (co-host): comments across macro and policy.
• Lauren (co-host): closing remarks and community tone.
• Puncher: co-host; personal mining/adoption perspective; closing on transitioning out of fiat assets.
• Dom (Don): heading to El Salvador Plan B conference; panels with Patrick J. Witt (White House), Saifedean Ammous, Jack Mallers, Adam Back; aims to ask about the Samurai case.
• G Money: strong sovereignty and self-custody stance; anti-ETF; “bitcoin as weapon of freedom.”
• Fred Krueger: market strategist; silver vs bitcoin market caps; adoption power-law; view on lower rates and financialization/income products; supportive of a BlackRock-linked Fed candidate.
• Thomas: macro framing (truth vs crowd psychology); asset-backed lending/yield strategies; housing supply/regional dynamics; currency and carry-trade risks.
• Small Cap: macro-tech thesis; metals vs networks; bitcoin as native settlement layer for the digitized economy.
• Prescott: finalist in “Race to Revenue” app competition; AI ‘word of the day’ experiment; government shutdown odds.
• Gary: trader/miner; pricing/mining questions; curtailed energy in practice.
• Bad Dog: self-custody maximalist; against ETFs and custodial solutions.
• Taylor: sold house for bitcoin; 100% cold storage; pro-adoption via ETFs (won’t use them personally); generational wealth transfer angle.
• TC: mining/difficulty analytics; hash rate dynamics; decentralization/security explanations (51% attack reality).
• Leonidas: questions on the pace of adoption and timelines.
• Bram: author of “Bitcoin for Millennials” (draft in review; targeting Q2 release).
• Robert: FX/macro strategist; DXY, BoJ/Fed rate checks, yen carry trade and repatriation; currency war implications; pathway for sovereign mining/reserves.
• Dark: caution on tokenized gold auditability; fiat disarray.

Key developments referenced in the last 24–48 hours

• Consumer-grade mining devices proliferating (e.g., novelty “mining watch,” residential water-heater miners). Eric emphasized mining’s accessibility.
• Network hash rate saw a sharp drop (reported range from ~1.12 ZH to ~690 EH, then a +300 EH rebound overnight). Causes cited: downward difficulty adjustment plus winter storm-driven miner shutdowns (curtailed energy contracts, physical access/weather).
• Ongoing media narratives revive environmental FUD; Eric countered with claim that ~62.5% of mining uses renewable/captured otherwise-wasted energy and miners increasingly balance grids. Presented as his assertion.

Mining, difficulty, and energy dynamics

• Drivers of the hash rate drop:
  • Weather-related curtailment (mining contracts that shut off during peak grid load) and physical constraints.
  • Recent difficulty adjustment downwards.
• Expectation: quick hash rate recovery once weather normalizes; discussion of “organic” network behavior.
• TC’s difficulty tracker: current period ~12-minute average block times; if sustained, could yield ~16% difficulty drop in ~10 days—very material for miner profitability.
• Economics are highly heterogeneous:
  • Reported hosting rates ~7–8.5¢/kWh; some operators claim all-in costs from ~$18.5k to ~$90k per BTC, while others report ~$29k (additional ancillary revenue like CO2 sales can offset costs).
  • Different pools (Luxor, Braiins, Bitmain stock) and Joules/Terrahash optimizations matter; profitability depends on price, difficulty, firmware, and facility contracts.

Adoption, custody, and the Wall Street vs self-custody debate

• Eric’s framing: two camps often talk past each other—self-custody purists vs structured product/custodial adoption. Both can be true at once:
  • ETFs/custodians accelerate adoption and remove coins from market float (price positive) but centralize ownership and add counterparty/6102-style seizure risk.
  • Self-custody maximizes sovereignty and censorship resistance; harder on the user but the only way to truly own BTC.
• G Money and Bad Dog: insist on self-custody; ETFs “give power to the top of the pyramid;” the weapon is personal custody (not “proof-of-stake democracy”).
• Fred: financialization is inevitable and beneficial (income products, covered-call strategies, borrowing against BTC); most growth likely via custodians; sees Sailor/MicroStrategy as part of building financial rails.
• Taylor: personally 100% cold storage, nevertheless pro-ETF for funneling boomer wealth into bitcoin; expects heirs to move toward self-custody.
• Eric: pragmatic bridge—welcome ETF buyers, then educate them to withdraw to self custody. Focus on grace and patience in education.

Metals vs Bitcoin

• Fred charted silver vs bitcoin market cap ratios: from 100x (silver vs BTC) in 2015 to 10x (2017), to ~1x four months ago, now ~3x—his takeaway: silver is in a bubble; bitcoin likely to exceed silver’s market cap again this year.
• Eric: metals are “catching up” to bitcoin; expecting parity periods before LinkedIn-leaning finance audiences migrate to bitcoin’s superior monetary properties.
• Small Cap: metals matter (physical world), but bitcoin moves with networks and digitally-native settlement; adoption velocity and addressable market favor bitcoin.
• G Money: metals are for boomers; celebrating gold/silver is celebrating central bank balance sheets; bitcoin is about power projection.
• Practical aside: humorous werewolf vs vampire lore around silver.

Macro: rates, housing, and credit

• BlackRock-linked Fed chair candidate raised: Fred sees it as bullish; expects a shift to low rates likely starting by May, with the curve steepening then longer tenors following down.
• Fred’s thesis: Lower rates mainly improve housing affordability; inflation is not mechanically driven by rates alone—stimulus checks inflate, but lower mortgage payments shift household spend without necessarily causing general inflation.
• Eric challenged: Lower rates still expand monetary supply via more mortgages; debt grows even if cheaper; potential sector-specific inflation and deeper indebtedness.
• Thomas: in low-rate regimes, asset-backed loans collateralized by appreciating assets (e.g., bitcoin) will likely beat classical coupons; sees yield products tied to BTC (like MSTR strategies) becoming dominant.
• Housing supply vs regional reality:
  • Thomas: US likely short >1 million single-family homes; intense bidding wars in regions like NJ; affordability constrained by cash buyers; solutions include builder incentives and carefully structured mortgage support (mindful of 2008 lessons).
  • Eric: caution that national housing data can be misleading; supply/demand is hyper-local; many homeowners locked by 2–3% mortgages; policy shifts (lower rates) will change turnover dynamics.

Sovereignty, taxation, and philosophy

• G Money: bitcoin is a weapon for global sovereignty; urges opting out (e.g., adjusting withholding, stopping filing); sees bitcoin as Digital 1776, strengthening constitutional freedoms.
• Eric: balance present reality with future sovereignty—use the current system to accumulate bitcoin while advocating for self-custody and personal freedom.
• Several participants emphasized patience, education, and building bridges across camps.

FX interventions, yen carry trade, and DXY

• Robert:
  • DXY breaking a 4-year low; bitcoin trading in line with the dollar index (contrary to what it should be in theory).
  • BoJ “rate check” (threatening to intervene) following dovish hold despite 3% inflation; US Treasury (Scott Bessent) subsequently conducted a rate check during US hours—unusual; ESF can fund currency operations.
  • Yen carry trade unwind risks: with negative/near-zero rates ending, repatriation from US Treasuries/equities could mean dollar selling and yen buying; a sharp dollar/yen reversal can trigger leveraged short squeezes.
  • Populism cycle globally: pendulum swing away from globalist policies; currency wars likely as no country wants an overvalued currency; devaluing debt via negative real rates becomes policy tool; reindustrialization requires weaker dollar.
  • PPP suggests much more downside possible in USD/JPY (IMF PPP ~115)—positioning/hedging will determine severity.

Nation-states and the path to bitcoin reserves

• Robert & Eric: plausible pathway is covert sovereign mining first, then formal BTC allocation in FX reserves; major players beyond early adopters (El Salvador, Bhutan) may already mine (e.g., Russia; speculation around China and Gulf states).
• Eric: US states’ treasuries could be early domestic adopters; critical mass among states could pressure G7-level adoption.
• 6102 risk: custodial holdings (ETFs, centralized exchanges) more exposed than self-custody, reinforcing the self-custody imperative.

Education, tools, and community

• TC encouraged tracking difficulty and average block time over next ~10 days.
• Chris framed two separate systems—fiat protocol vs bitcoin protocol—advising individuals to choose their mix knowingly; timing markets is risky.
• Tech stack mentions: Nostr, Freedom Tech, Cashu, Fedi, “white noise,” and a non-bitcoin tool “Upscroll” to explore; call for a future deep-dive session.
• Bram’s “Bitcoin for Millennials” draft under review; target Q2.
• Dom’s El Salvador panels aim for deeper, non-redundant discussion.

Actionable takeaways

• For prospective adopters:
  • Start with self-custody education: seed management, multisig, wallet hygiene; practice with small amounts.
  • If entering via custodians/ETFs, plan and timeline to withdraw to self-custody.
• For miners:
  • Watch difficulty and block intervals; prepare for potential ~16% difficulty drop.
  • Review contracts (curtailed energy, hosting rates), firmware efficiency, and pool selection.
• For macro positioning:
  • Expect lower rates and negative real yields to favor risk assets and financialization of bitcoin (covered-call, lending).
  • Watch USD/JPY and DXY—yen carry trade dynamics and repatriation can move US markets.
  • Anticipate currency wars and policy-induced devaluation; consider the implications for gold and ultimately bitcoin as a neutral reserve.

Highlights and notable viewpoints

• Fred Krueger: Adoption grows ~15%/yr; price follows power-law and can grow faster. Lower rates likely, bullish for bitcoin and income products.
• Thomas: Truth vs crowd psychology—short-term moves can be crowd-driven; long-term thesis matters. Asset-backed yield on BTC could dominate in low-rate regimes.
• Small Cap: Physical settlement moves slower by design; bitcoin is the monetary physics for an internet-scale, exponential world.
• G Money: Bitcoin is about power and sovereignty; think beyond fiat mindsets and traditional politics; self-custody is the weapon.
• Eric: Two truths can coexist—Wall Street adoption lifts price while self-custody secures freedom; bridge the gap with patient education.
• Robert: FX policy is increasingly active (rate checks, ESF); expect a weaker dollar, reindustrialization push, and currency wars—bitcoin’s proof-of-work energy link suits a system money role.
• TC: Mining/difficulty are live levers of the network; decentralization/security scale makes 51% attack impractical; watch the 10-day difficulty window.

Open questions to monitor

• How quickly will lower rates materialize, and how will they transmit across mortgages, personal loans, and asset yields?
• Will state treasuries or sovereign wealth allocate BTC meaningfully in 2025–2027? Which jurisdictions will lead?
• How much of the yen carry trade is currency-hedged today, and how severe could a squeeze be if USD/JPY breaks lower?
• Can structured income products on BTC (covered calls, collateralized lending) scale without undermining decentralization risk-wise?
• Will ETF buyers transition to self-custody at scale, and how can educators accelerate that journey?

Closing tone

• Consensus across perspectives: accumulate with conviction, prioritize self-custody, educate patiently, and prepare for a volatile but structurally bullish environment as bitcoin continues to integrate with global finance while remaining the sovereign option for individuals.