Kane McGukin recently wrote an excellent article, "Bitcoin Is Change Management," sharing his reflections on the Bitcoin Conference. From the conclusion:

The message was clear throughout Bitcoin 2024 we are headed for a paradigm shift on the other side of this 4th turning, and the Bitcoin tribe is believed to have the leaders that will shape the culture of our future.

Bitcoin is now mainstream. It's still early in the adoption phase, but the Bitcoin network will be a crucial tool for our future.

How that future is shaped, and Bitcoin's role in our financial system, will depend on which side of the aisle gains control and how they choose to use it. Will it be an asset and means to rebuild our aging energy infrastructure or is it just another monitoring device? Only time will tell.

The concept of bitcoin being at the forefront of a paradigm shift is particularly intriguing. We're living through what some historians and sociologists refer to as a "Fourth Turning" – a period of crisis and upheaval that occurs roughly every 80-100 years. These turnings are characterized by major societal changes, and it appears that bitcoin may play a crucial role in shaping the outcome of this current turning.

Bitcoin isn't going away. Regardless of one's personal views, it's clear that it has become too significant to ignore. As we move forward, it will be essential for policymakers, business leaders, and ordinary citizens to educate themselves about it and its potential impacts.

Those involved must think and act strategically to effectively navigate what's shaping up to be a tumultuous future. Onward!

🏳️ IMF (almost) admits defeat

In 2021, the International Monetary Fund (IMF) warned that El Salvador’s move to adopt bitcoin as legal tender carried "a number of macroeconomic, financial, and legal issues." Three years later, the IMF admitted that the risks it predicted had not materialized. Still, it called for the country to be "more transparent" about its bitcoin policy. Since setting forth a robust bitcoin policy for El Salvador, President Nayib Bukele has continued to accumulate bitcoin using government funds.

Bitcoin stays strong

El Salvador's bitcoin strategy remains a point of contention for legacy institutions, but the IMF's reaction highlights an important point: Bitcoin hasn't failed the people of El Salvador as the IMF predicted (and no doubt, hoped). Instead, the Salvadorian people are navigating uncharted territory, mapping a territory that other countries will likely put to use soon.

Doubling down, Bukele has announced a $1.6 billion investment from Yilport Holdings that will be used to operate a seaport at his proposed "Bitcoin City."

📈 Money supply growth accelerates

For the second consecutive month, the U.S. money supply, as measured by the "True Money Supply" (TMS) metric developed by Murray Rothbard and Joseph Salerno, has grown year-over-year, marking a change after more than a year of sharp contractions. This turnaround ended 18 months of decline in the money supply, which included some of the largest contractions since the Great Depression.

As the U.S. economy teeters on the precipice of a recession, bankers and Wall Street pundits will likely demand a more inflationary monetary policy. Per the Mises Institute's Ryan McMaken,

Last week’s weak jobs report led to numerous calls from Wall Street pundits for more dovish policy from the Federal Reserve. On Monday, economist and longtime Wall Street “expert” Jeremy Siegel seemed nearly hysterical as he demanded the Fed hold an emergency meeting and slash the target policy interest rate by 150 basis points over the next two months. This can only be described as “panic.” This followed a cloud of other establishment economists who declared on Friday that the Fed should have begun cutting rates many months ago.  

Wall Street is buying bitcoin

Goldman Sachs has reportedly purchased $418 million worth of bitcoin ETF shares, with a significant portion invested in BlackRock's iShares Bitcoin Trust. Tracking alongside is Morgan Stanley, which has also increased its exposure to bitcoin, signaling that two of the most prominent financial institutions are recognizing bitcoin's growing importance in global markets.

More institutions enter the arena

The entry of Goldman Sachs and Morgan Stanley is more than just a headline – it's a harbinger. As traditional financial giants embrace bitcoin, they will amplify its network effects, accelerating a virtuous cycle of adoption.

“Crypto For Harris” in dire straits

Although she has reportedly tried to reposition herself as friendly to the crypto industry, Vice President Kamala Harris now appears poised to maintain the Biden administration's harsh stance in opposition to financial innovation.

By reportedly working with former economic advisors Brian Deese and Bharat Ramamurti, widely known for their anti-bitcoin and crypto views, Harris is now expected to continue her current administration's stringent approach in a potential presidential term. The thread below, written by Galaxy's Alex Thorn, has the details.

BITCOIN ADOPTION CONTINUES

Bitcoin mining company Marathon Digital Holdings acquires $249 million worth of bitcoin.

Bitcoin pioneer Wang Chun to command SpaceX's first mission over Earth’s polar regions.

MetaPlanet purchases an additional ¥500 million worth of bitcoin.

City of Santa Monica's Bitcoin Office to host an open-source bitcoin festival in October.

Marathon Digital now stamps all bitcoin mined in America as "Made in USA."

Jay-Z and Jack Dorsey-backed Bitcoin Trust appoints a Bitcoin Core developer as interim CEO.

HOW BITCOIN WORKS

Learn one key idea about bitcoin each week. This week:

What is a Strategic Bitcoin Reserve?

The concept of a strategic bitcoin reserve has gained traction in recent political discussions, with various U.S. leaders proposing that the federal government accumulate and hold significant amounts of bitcoin. This idea stems from bitcoin's potential to act as a strategic asset, similar to gold or oil.

Key proposals include former President Donald Trump's idea of retaining bitcoins acquired through law enforcement as the foundation of a national bitcoin reserve. Robert F. Kennedy Jr. proposed a more aggressive approach, suggesting the government should acquire 550 bitcoins daily until it holds 4 million bitcoins – nearly 20% of the total supply. U.S. Senator Cynthia Lummis of Wyoming proposed a reserve of one million bitcoins for at least 20 years, aiming to enhance the returns on Treasury assets and reduce national debt.

Proponents argue that a Strategic Bitcoin Reserve could improve the government's balance sheet. As bitcoin’s global adoption grows, holding a substantial reserve could give the U.S. an advantageous position in international trade and geopolitics.

However, the idea has been criticized. Critics suggest that the funds required to purchase bitcoin could be better utilized by paying down the national debt or reducing taxes, allowing citizens more freedom to invest their money. The same argument could be made for the government’s current gold holdings. Since they no longer “back” the dollar, they too could be sold and the funds returned to taxpayers or used to pay off the national debt.

To summarize, while the idea of a Strategic Bitcoin Reserve presents intriguing possibilities, it also raises important questions about the proper role of government in owning such assets in general.

For more on this topic, check out River’s excellent breakdown.

COIN CHECK

What justification did President Nixon give for suspending the dollar’s convertibility of the dollar into gold or other reserve assets on this day, 53 years ago in 1971?

1. To inflate the money supply

2. To defend the dollar against speculators

3. To free the dollar from being tied to a “barbarous relic”

4. To back the dollar with silver

Check your answer at the end of the page.

FROM THE MEME POOL

ANSWER

1. To defend the dollar against speculators. From his speech, “Address to the Nation Outlining a New Economic Policy: The Challenge of Peace."

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