Rabbit Hole Recap: Bitcoin Week of 2021.06.21
6/25/2021 · 100 min · transcript via mlx
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Key topics
— China's Bitcoin mining crackdown is forcing significant hash rate migration out of the country; blocks are coming in at ~12.5 minutes as difficulty will likely drop 21% by July 1st, with miners relocating to the U.S., Kazakhstan, Europe, and Latin America.
— GBTC trading at a persistent 12% discount to spot Bitcoin despite Grayscale's efforts to convert it to an ETF; institutional investors should hold their own keys rather than use custodial products.
— El Salvador's government-issued Chivo wallet includes KYC requirements and seamless dollar-to-Bitcoin conversion, representing a custodial entry point but not solving core financial inclusion issues that self-hosted wallets can address.
— "The B Word" conference (July 21st) brings institutional education on Bitcoin with Jack Dorsey, Elon Musk, and Cathie Wood discussing adoption; Matt will speak on Bitcoin ethos and self-custody.
— Lightning Network shows healthy growth with ~15,000 nodes, 50,000+ channels, and 1,500+ BTC in public capacity; private channels likely hold more volume via institutional routing nodes and regulated services.
— British FCA has approved only five crypto firms while issuing warnings to 111 unregistered companies, making the UK hostile to Bitcoin business compared to jurisdictions like El Salvador and U.S. states courting adoption.
Market & price signals
— Bitcoin trading at $33,085; one dollar gets 3,023 satoshis—the most sats per dollar available on recent RHR broadcasts. Whirlpool unspent capacity sits at 2,995 BTC (just under 3,000); mempool clearing aggressively with low transaction fees attributed to SegWit adoption, Lightning batching, and exchange efficiency gains—though most new retail remains on custodial platforms rather than withdrawing to self-custody. MicroStrategy added more coins, now holding 105,000 BTC at a cost basis of $37,617 (currently underwater ~$4,500/coin). Network difficulty adjustment expected July 1st showing –21% retarget; blocks at 12 min 39 sec average due to Chinese exodus.
Actionable insights
— Recognize political grid risk: Mining operations in any jurisdiction face regulatory seizure if they compete with local electricity demand during peak usage; prioritize off-grid and smaller distributed mining over large on-grid facilities to reduce sovereign risk.
— Do not use custodial Bitcoin products (GBTC, BlockFi, etc.): Hold your own keys with multi-sig solutions, Lightning wallets, or hardware wallets; Grayscale's persistent discount and regulatory capture examples show that counterparty risk will always carry a financial penalty long-term.
— Prepare sovereign tools for adoption waves: Build and test privacy-preserving Bitcoin acceptance tools (e.g., CypherPunk Pay, BTCPay, Samourai Whirlpool) and run your own Lightning node now, so when normies wake up to surveillance and financial censorship, decentralized alternatives are ready and proven.
Episode sponsorships
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