Last week’s most memorable moments

Greetings, Bitcoin History subscriber!

You might’ve heard things are changing around here. Pete Rizzo, the Bitcoin Historian, has just launched a brand-new Bitcoin podcast with Blockworks, Supply Shock — hence the new name on these emails.

Twice a week, join Rizzo as he digs into Bitcoin current events and maps them alongside everything that has come before. 

The arc of crypto is long, but it bends toward ₿itcoin. Read more about the Supply Shock vision.

Recent episodes have featured guests including investor and advisor Dan Held, advocate Dennis Porter and cypherpunk Jameson Lopp. Check out episodes on YouTube, Spotify and Apple.

We’re now ramping up to deliver these emails five times a week instead of two, with fresh formats and deeper perspectives. In the meantime, onto this week’s roundup:

Zero to 13

Wyoming Senator Cynthia Lummis has been plugging Bitcoin from as long as it was — or at least since 2013 when she bought her first bitcoin.

Now, Lummis’ passion for Bitcoin is coalescing. Last Tuesday, Lummis reintroduced her monumental BITCOIN Act to the Senate, which if passed, would expand Trump’s strategic reserve by buying 1 million BTC ($83.6 billion) over five years — “mirroring the scale and strategic importance of US gold reserves.”

Lummis first introduced the bill last July with no co-sponsors. This time around, there were five — all Republican — while Alaska representative Nick Begich told the National Press Club that he would be introducing Lummis’ bill to the House of Representatives along with six co-sponsors, bringing the total number of sponsors across both bills to 13.

There’s still a long road ahead before the bills would pass with majority votes in both the House and Senate. Then again, nothing says Bitcoin like steady, incremental progress.

Honest work

Bitcoin mining is everything, everywhere, all at once: a multi-billion dollar industry covered by Wall Street; a techno-vocation to uncensorable peer-to-peer cash; a critical revenue stream for communities big and small.

It’s also a lottery system for hobbyists. And it’s paying out again. Early last week, yet another bitcoin miner running DIY equipment discovered a block to immediately earn 3.125 BTC ($262,000), plus an additional ‎0.025 BTC in fees ($1,950).

Data logs indicate the miner was using an open-source BitAxe capable of up to 480 GH/s of hash rate — which is a measly 0.000000894% of the hash rate wielded by industry giant Marathon.

The BitAxe was pointed to Solo CKPool, which despite its name is not a pool but more of a web proxy which facilitates bitcoin mining without running a full node. This was the sixth block mined by a SoloCK participant in the past six months.

Cold War II: Bitcoin Boogaloo

On the world stage, Bitcoin is no longer a theoretical construct. Case in point: Some Russian oil companies are now using BTC during trade with India and China, alongside ETH and USDT, according to a Reuters report.

It goes like this: A Chinese buyer of Russian oil pays yuan into the offshore account of a middleman, who converts the yuan into crypto before sending it onto a second and then finally a third account in Russia, where it’s converted into Russian rubles. 

In one case, tens of millions of dollars in oil are reportedly traded in this way every month. Bolivia’s state energy provider YPFB meanwhile told reporters that it will use crypto to pay for energy imports as dollar and fuel shortages persist.

Separately, guests on this week’s Supply Shock roundup wondered whether BTC could be adopted by BRICS nations as both the pricing and settlement system for global oil trade separate from the US, “because then you're not allowing any country to take over the oil market and America could live with that,” said Nolan Bauerle.

Follow the money

Depending on who you ask, bitcoin is either locked into the four-year halving cycle, or it’s now forever tightly correlated with US tech stocks.

It pays to zoom out. Apparently, the price of bitcoin is actually positively correlated with how much money is sloshing around the global financial system — cash, deposits and other highly-liquid cash equivalents — a measure of total money supply referred to as M2.

This week, independent analysts ran the numbers to learn how that correlation tends to work, finding bitcoin indeed follows the trajectory of the M2 global money supply but with a 105-day lag.

So, considering the M2 global money supply has been trending upwards since January, the historic correlation suggests bitcoin could follow starting sometime in April or May. For all our familias.

Bull Stearns

Last Tuesday also marked the 17th anniversary of arguably the quintessential Mad Money segment — when Jim Cramer reassured viewers that Wall Street bank and brokerage Bear Stearns would be fine in the leadup to the 2008 global financial crisis.

Spoiler alert: Bear Stearns stock crashed by 90% six days later after facing billions of dollars in margin calls, and within weeks was sold to JPMorgan for $10 per share after starting the year at close to $90. 

The bank had a highly leveraged balance sheet overexposed to subprime mortgages. CNN reported that Bear had “$11.1 billion in tangible equity capital supporting $395 billion in assets, a leverage ratio of more than 35 to one.”

It was this unchecked largesse of Wall Street — alongside the hundreds of billions in government bailouts given to failing banks around the world — that is believed to have directly inspired Satoshi Nakamoto to release Bitcoin. 

Thanks, Cramer, I guess.

— David Canellis