#827 Bitcoin Frees Us From Censorship NOW w/ Dylan LeClair
2/16/2022 · 28 min · transcript via mlx
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Key topics
— Bitcoin's hash rate has recovered above 200 exahashes per second following China's 2021 exodus, reaching historic highs and demonstrating robust network security and resilience.
— Lightning Network public channel capacity continues explosive growth, enabling instantaneous peer-to-peer settlement without intermediaries—a capability that legacy payment systems cannot match.
— Exchange outflows remain persistently negative, indicating strong hodling behavior; approximately 60% of circulating supply has been dormant for one year or more, suggesting diminishing liquid supply.
— Immutable value transfer on Bitcoin reached $1.4 trillion in early 2022, highlighting the asset's utility as "freedom money" in contexts of government financial control and asset seizure.
— Real yields remain deeply negative (CPI at 7.5% versus near-zero Fed funds rate), creating financial repression conditions that drive Bitcoin adoption as an escape valve against currency erosion.
— Energy companies including ConocoPhillips and other oil producers are now publicly mining Bitcoin using waste natural gas, signaling mainstream corporate adoption driven by production cost arbitrage.
Market & price signals
— Bitcoin consolidating sideways; price quoted at approximately $44,000. Publicly traded miners producing Bitcoin at ~$10,000 cost versus $44,000 market price, creating strong margin incentives. Equity market volatility (risk-on/risk-off sentiment) remains a near-term driver; credit markets show weakness. Institutional capital allocation currently halted pending Fed policy pivot; large funds waiting for hawkish central bank stance to reverse before re-entering. Real yields remain deeply negative at -7.5% (7.5% CPI versus ~0% Fed funds rate), intensifying financial repression narrative.
Actionable insights
— Monitor credit markets and Fed policy shifts closely; institutional capital is on the sidelines and will likely re-enter significantly once monetary conditions change, potentially triggering a major demand surge for Bitcoin given the existing supply constraints (illiquid supply shock ratio near all-time highs).
— Dollar-cost average into Bitcoin if you believe in the long-term thesis of scarce money and resistance to financial repression; the majority of Bitcoin supply is dormant (strong hands), reducing available liquid supply while production costs remain well below market price, favoring long-term holders.
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