Google Wants to Custody Banks' Bitcoin. Brazil Shows Why You Hold Your Own | Rabbit Hole Recap 426
10/29/2026 · 99 min · transcript via mlx
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Key topics
— Google announces MPC (multi-party compute) custody solution for institutions targeting early 2027 launch; competing with Fireblocks and BitGo for enterprise digital asset custody.
— Bitcoin Core patches two medium-severity vulnerabilities discovered by Lupe Project; AI auditing now accelerating bug discovery and shortening disclosure embargoes.
— Brazil's leftist victory under Lula triggers 13.88% stock market collapse and 25-year worst day for the real; illustrates capital flight from jurisdictions weakening property rights.
— Jason Calacanis argues Bitcoin should be sold for superintelligence; dismissed as rage bait, though raises questions about AI capex sustainability versus hard money.
— Anthropic S1 filing shows significant capex commitments; Paul Kedrosky argues frontier model training costs are rising and first lab to stop training may win most profitably.
— eCash (Bitcoin dividend fork) launches with difficulty adjustment; requires node operators running Bitcoin Core 32.1 to update before fork block 973728.
Market & price signals
— Bitcoin trading in $79k–$81.3k range; volatile, range-bound movement described as "crab walk" boring the hosts. Difficulty adjustment of 5.6–5.7% expected. Hash rate coming back online despite narrative that miners are selling ASICs for GPUs. Brazil's Ibovespa fell 13.88% and real crashed 25% in single session after Lula's election, signaling market's loss of confidence in government property rights protection. Bitcoin collateralized lending rates dropping (some providers in six–seven handles) approaching HELOC rates (~7.36%); when lending rates drop below HELOC rates, potential catalyst for capital inflow into Bitcoin as superior collateral.
Actionable insights
— Update Bitcoin Core nodes to version 29.5, 30.4, 31.2, or 32.1 to patch unbounded memory growth vulnerabilities; eCash fork operators must update before block 973728 (~2.5 hours from recording).
— Avoid touching any free coins or dividend forks in first 1–2 weeks; expect phishing/scam attempts in DMs; do not connect cold storage to internet without verifying software integrity given spyware risks from AI-enhanced exploit discovery.
— Monitor Bitcoin-collateralized lending rates below HELOC benchmarks as early signal of institutional capital rotation; better collateral profile (24/7 liquidation, no foreclosure friction) compared to home equity loans positions Bitcoin for next adoption wave.
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