so many of you will remember my reporting around "operation choke point 2.0" from the spring of 2023; TLDR, Biden's financial regulators, namely the Fed, FDIC, and OCC launched a crackdown on banks covering the crypto space... the first casualty was Silvergate bank, which _voluntarily liquidated_. the common reporting around Silvergate was that they lent to crypto depositors, those depositors were flighty, when rates rose they suffered m2m losses on bond portfolios, and ended up insolvent

Chainalysis has released their 2024 Global Adoption Index. Let's analyze trends over the last five years of the index:



(reposting due to mistakes) chainalysis.com/blog/2024-glob…
India and Nigeria occupy the top two spots this year for a second consecutive year. Indonesia has surged into third place. The US is unchanged at fouth. Top 10 has largely solidified.

Gm! Excited to present our new whitepaper, written in collaboration with @BHDigitalAssets, @Visa and @artemis__xyz

castleisland.vc/writing/stable… Pop in a zyn, grab a cold brew, and let's dig in. First: why did we do this? Well, everyone knows stablecoins are the killer app of crypto. The numbers tell a compelling story:

- Supply is >$170b
- >20m addresses onchain use a stablecoin every month
- >120 addresses hold a nonzero balance
- Stablecoin settlement volume annualizes at >$5 trillion in 2024

a few comments on this new genre of reporting – crypto is threatening democracy etc

first of all, it's definitely amusing that the critics have pivoted from writing crypto off to being deeply concerned about its effect on Our Republic

https://twitter.com/molly0xFFF/status/1811836793353884053

molly seems to have pivoted smoothly from web3isgoinggreat (a sarcastic blog dedicated to showing how broken crypto is) to being very worried about Crypto Dark Money influencing politics. maybe web3 is going a little greater than you thought? maybe take a beat to introspect?

This Rep gets my bozo of the week award. His thread in which he claims to unpack and debunk trumps post is wildly off base in so many ways

https://twitter.com/seancasten/status/1801038344681353716

“CBDCs are largely theoretical”

Uhh no. There are 3 fully deployed CBDCs (Jamaica, Bahamas and Nigeria), 36 countries with CBDC pilots, and 68 countries in an advanced stage of development

hey @AABerwick and @IanTalley

now that your erroneous reporting has been rebuked by the literal undersecretary of the treasury, do you recant?

hey @EmmaMoodyWSJ, how are those "standards and ethics" you adjudicate holding up?

https://twitter.com/GOPMajorityWhip/status/1757848617895829954

@AABerwick @IanTalley @EmmaMoodyWSJ the people defaming us have names, faces, and emails. they think their press credentials are a shield from accountability. they have been completely brazen and unapologetic. they remain uncowed.

https://twitter.com/nic__carter/status/1716454297683079507

"a cold snap in texas causes bitcoin fees to rise" is such a fun relationship, the kind of thing you expect to learn about on odd lots

https://twitter.com/jamesmcavity/status/1745883173345513689

here's all the pieces you need to tease out the relationship:

bitcoin stuff
- bitcoin targets 144 blocks per day and these each contain up to 4mb of data
- if bitcoin mining power drops suddenly, the next adjustment to difficulty can take as long as two weeks, so a sudden drop in hashrate can cause blocks to be "slow" for a while
- slower blocks during a time of moderate or high usage cause users to compete with each other for inclusion, driving up fees

bitcoin mining/ energy stuff
- texas has a deregulated power market, and scarcity is expressed as real time price signals (to sophisticated users). when prices rise, firms that can afford to turn off
- industrial bitcoin mining lends itself to rapid curtailment; that is, miners can stop consuming power at any time, and they don't suffer a nonlinear deterioration in their economics when they curtail, aka nothing breaks when they turn power off. Bitcoin is unique relative to other forms of industrial demand, in this respect. I wrote a whole paper about this with others:
- bitcoin miners have a variety of arrangements that enable them to react to changing grid conditions (in texas): they might be enrolled in formal "demand response" or "ancillary service" programs (whereby they willingly curtail at ERCOT's request to free up power for other uses); or they might be trading power in real time, and simply curtailing when real time prices reach their economic breakeven point; or they might be hedged and long a fixed power contract, which becomes more economical to sell (rather than use) when prices are high.
- either way, as a general rule of thumb, bitcoin miners in texas are generally not operating when power prices are high
- texas is the largest hub of bitcoin mining in the US, and the US is the largest market for bitcoin mining worldwide. texas accounts for 10-15% of worldwide bitcoin mining activity in my estimate

putting the pieces together
- it's cold in texas, and that is straining the grid. that means power prices will rise in texas.
- bitcoin miners in texas will be offline for a day or two
- hashrate will probably drop temporarily, by maybe 10% or so (but this is hard to measure, because hashrate is calculated based on block arrival time, and we don't have enough datapoints per day for an accurate calculation)
- this will drive down block arrival time (because bitcoin difficulty can't react in time)
- this means that there will be a lower supply of block space available for people that want to use bitcoin
- the mempool of waiting txns is full right now, so net new transactional demand will be expressed in the form of higher fees
- fees are pretty high right now to begin with, so new transactions will have to further outbid them to get into blocks
- hence fees will probably rise on bitcoin due to the cold weather in texaspapers.ssrn.com/sol3/papers.cf…

There still remain otherwise serious people who in 2023 earnestly believe “unbacked fake tether issuance drives up the price of bitcoin”, despite

- no actual documented evidence of this ever
- tether surviving a brutal bear market when other major stablecoins collapsed and virtually every lender and several exchanges collapsed
- tether honoring massive redemption events
- tether settling with NYAG and providing two years of attestations to them without any issue
- the “Chinese commercial paper” conspiracy being false
- the “tether will collapse when evergrande does” theory being proven false (evergrande collapsed)
- tether continuing to reduce the maturity and increase the liquidity of their assets
- multiple occasions of tether supply and bitcoin price going in totally different directions
- tether supply rallying while bitcoin sold off (impossible according to the theory)
- bitcoin enduring a brutal bear market while tether reached ATHs
- tether securing and maintaining relationships with credible US based intermediaries like cantor
- tether containing their quarterly atteststions like clockwork

It’s time to admit that the truthers are wrong. You don’t get an unlimited moral license to be intellectually short with absolutely no evidence in favor of your position. Yes - bad things could happen to tether in the future. But regardless, the truthers have been wrong from 2017-23, and everyone can agree on that. And if they’ve been actually short USDT, I respect their conviction to losing money by confusing their normative beliefs with objective reality - at least you tried 💫

Is today the day that the @WSJ admits they overstated the bitcoin terrorist financing figures by ~200x and committed journalistic malpractice? Let’s find out @AABerwick (angus.berwick@wsj.com) and @IanTalley (Ian.Talley@wsj.com) are the men responsible

Feel free to let them know that they are failures who can’t read a block explorer - and stubborn failures at that, because they refuse to admit their lie

Excited to announce that we've led a seed round of financing for Mountain Protocol, a Bermuda-based interest bearing stable stablecoin

https://twitter.com/MountainUSDM/status/1701208170931081576

Mountain is a permissionless, nationally regulated, rebasing interest-bearing stablecoin that passes on yields from short term treasuries held in reserve (not available to US users)

theblock.co/post/250201/mo…

quick thread reacting to the Fed's 'novel activities' press release

TLDR it looks neutral to negative for me

federalreserve.gov/newsevents/pre… let's start with the novel activities supervision program

first of all, this looks like an attempt to codify the informal pressure they've been applying to banks which I have been calling OCP2.0

https://t.co/zfUCBDWWbJfederalreserve.gov/supervisionreg…

Today we sit down with David Thompson, managing partner at Cooper & Kirk, to talk about their OCP2.0 memo and what can be done about it

onthebrink-podcast.com/thompsonocp/ David was instrumental in ending OCP1.0 and he has quite a few ideas for addressing 2.0 including a 5th amendment defense

Proud of my contributions to the “conspiracy”

npr.org/2023/03/31/116… Dying at the idea of some NPR disinfo researcher trawling the internet for the origins of “eat the bug; live in the pod” meme

Liz Warren update (sigh)

She took some time off from encouraging bank runs and has resumed harassing the PCAOB (regulator that oversees CPAs doing public co audits) into pressuring audit firms into deserting crypto clients

warren.senate.gov/imo/media/doc/… Her contention is that bc some audit firms supervised Proof of Reserves (not audits) and some industry firms (but NOT audit firms) wrongly referred to them as "audits", (in reality they were always "agreed upon procedures"), PCAOB should rein in CPAs

Crypto business not included

fdic.gov/news/press-rel…

Shocking interview with Barney Frank -- pushes back at DFS' assertion that Signature wasn't closed due to an anti-crypto animus... whole thing worth reading

@jenwieczner 👏👏

nymag.com/intelligencer/… @jenwieczner the whole thing is absolutely bananas. some extracts

- if FDIC/Fed had acted on Friday, the run wouldn't have taken place
- Signature was ready and able to open on Monday

Dear God. Barney Frank openly admits that Signature was arbitrarily shuttered despite no insolvency because regulators wanted to kill off the last major pro-crypto bank. Colossal scandal

cnbc.com/2023/03/13/sig… Heard this independently from other sources as well. I suspected as much last night but confirmed today. Signature was executed last night not due to any runs but as a political scalp, intended to be veiled by the fog of war.

Starting imminently - House Financial Services committee hearing on Biden admin attack on crypto

Whip Emmer is on right now!

The politicians are now telling us that because a single bank, peaking at $16b in assets, wound down - in an orderly manner, making depositors whole, affecting no one but shareholders, causing no knock on effects - that crypto firms must be shut out of the banking system They cry out "safety and soundness" while chipping away at the foundation, and act vindicated when the structure starts to crumble.

not knowing much about this stuff, i'm pretty optimistic in the greyscale v SEC case today, but it's completely obvious that the SEC is stonewalling the spot ETF for arbitrary political reasons, and there's 0 good reason to deny it ... any decent court should see that live audio here

Forget AGI, we’re headed toward extinction anyway

https://twitter.com/elonmusk/status/1631126559015747585

South Korea’s TFR is 0.79, and they have a massive spending campaign to get people to have kids. No govt program has been successful at raising TFR for a meaningful amount of time.