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In our Friday articles, we take a deep dive into the current state of Bitcoin. Every Friday we will continue to publish brief State of Bitcoin newsletters to keep subscribers up to date on news from the Bitcoin industry. For full disclosure, Brandon is a strong believer in Bitcoin and has allocated portions of his portfolios to BTC (HODL baby).
Top stories from the week:
CPI Print of 8.5%: REJOICE INFLATION IS DONE! Just kidding, it is still at 8.5% and for some reason the market is celebrating? After the print, almost every stock in the S&P 500 finished in or near positive. The market seems to like that the estimated CPI was 8.7% and the actual was 0.2% less. Bitcoin and other “risk on” assets had a day which is leads to the case of Bitcoin being an inflation hedge, but it still is correlated to growth stocks as much as Bitcoiners don’t want to admit it. I see decoupling from “risk on” assets following the next halving, but that is all speculation. Bitcoin has been doing well as of late. It dipped to a low around $17k and is now floating around the $24k mark so we shall see if that trend continues. Either way I’m still stackin’ sats.
Methane Emissions Bill to give $1.5 billion for flare capture: I placed the entire bill in the link if you’d like to read it, but in summary the bill is the government is incentivizing natural gas and oil companies to find ways to capture the flare off gas that is generally sent into the atmosphere. This is absolutely HUGE for Bitcoin mining as many have already begun to do this. The government has also previously deemed capturing this flare off gas as not “green” or in line with the ESG policies. As Jack Dorsey once said, Bitcoin encourages the use of sustainable energy and that will persist as mining becomes more mainstream.
Government hires 87k more IRS agents for taxation: The Inflation Reduction Act of 2022 put together by Senate Majority Leader Chuck Schumer and West Virginia Sen. Joe Manchin would spend an extra $79.6 billion on the IRS over the next 10 years. This money is expected to go towards hiring 87k new IRS agents, doubling the size in an effort to “crack down on wealthy tax evaders and to modernize its technology.” As of 2019 the top 1% accounted for 20.1% of the adjusted gross income and paid 38.8% of the total federal income tax. Despite what politicians want to tell you this is NOT an increase of the IRS task force to come at the rich, it's to come at the middle class and majority of Americans making a living. This is another case of marketing by the government and I believe the majority of Americans are going to start waking up to these facts.
Bitcoin Lightning Network reaches ATH with 4.5k BTC: The Lightning Network may be one of the most powerful applications on the Bitcoin Network to date. For those that do not know, the Lightning Network allows big and very small transactions to occur instantly with a miniscule fee. This has already been popularized with the adoption of Bitcoin as legal tender in El Salvador and the Lightning Network has not stopped there. The growth of this aspect of the Bitcoin Network is encouraging and I look for it to continue to grow as more businesses accept Bitcoin globally and more countries make Bitcoin legal tender.
Crypto Mixing Service Tornado Cash Blacklisted: Earlier this week the crypto mixing service Tornado Cash was placed on the Specially Designated Nationals (SDN) list which bans the use of this service for all Americans. Any American attempting to use this protocol and any of its Ethereum wallet address may face criminal penalties. The Tornado Cash is an open-source project that allows users to shield their transactions histories from public view making it difficult for blockchain analysts to track the transactions. This comes after Blockchain analysis showed that Tornado Cash ‘has been the go-to mixer’ for the Lazarus Group, a North Korean hacking group tied to the $625 million hack of Axle Infinity’s Ronin Network. This is making it more difficult to avoid tracking of payments, which could be a great benefit of using Bitcoin. I believe this makes more of a case for Bitcoin as these services are needed in the shitcoin space but can be available in Bitcoin but not necessary. The power of non-KYC ways to obtain Bitcoin will be more prevalent when more of these mixing services get banned by governments and regulators.
BlackRock partners with Coinbase to offer Bitcoin services: There are a ton of layers to this story. Coinbase is being investigated by the SEC for staking services, and now, BlackRock partners with Coinbase to offer Bitcoin services, and now BlackRock is launching a private trust focused on Bitcoin. Coinbase has had its fair share of shady dealings in the past and now the world’s largest investment firm, BlackRock , is getting exposure to the hardest money ever created. It is somewhat surprising seeing BlackRock get in with how many assets they have under management and the size of Bitcoin’s market cap but the higher ups at BR must see a prime opportunity. If Bitcoin is big enough for BlackRock, it’s big enough for you anon.
A quick look on chain:
Current price: $22,933
Market Cap: $457.5B
Spent Output Profit Ratio: 1.0022
Current block height: 748901
Mean block interval: 9min. 40sec.
Meme of the Week
What would the BTC community do without memes? Every week on State of Bitcoin, we feature our favorite meme of the previous week. If you create or see a meme that you like and want us to consider featuring it, tag us on Twitter or instagram (both @Greencandleit)! This week we’re featuring a meme we came across on the @Meditation_Man page:
Video Version!
For our complete rip, check us out on the pod:
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Happy Friday everyone - get after it this weekend!
Brandon
Disclosure: The authors of this writing hold positions in cryptocurrency mentioned in this article. That cryptocurrency is Bitcoin. The article was written by Brandon Keys and occasionally a guest writer; it expresses the author's own opinions. They are not receiving compensation for it. The information presented in this article is for informational purposes only and in no way should be construed as financial advice or recommendation to buy or sell any stock or cryptocurrency. None of the authors of this article are financial advisors. I encourage all readers to do further research and do your own due diligence before making any investments.
Thank you, great article.