Join me today for Episode 1056 of Bitcoin And . . .
Topics for today:
- Bank of Korea Woodsheds Itself
- Metaplanet Buys BTC
- Demand Pool (DMND) Launches Stratum V2
- Strategy Unveils $500 Million STRIFE Stock
#Bitcoin #BitcoinAnd
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https://www.theblock.co/post/346721/south-korean-central-bank-to-start-hangang-cbdc-pilot-with-100000-citizens-next-month-report
https://bitcoinmagazine.com/news/dmnd-to-launch-first-stratum-v2-bitcoin-mining-pool-and-closes-venture-capital-investment
https://www.theblock.co/post/346744/metaplanet-btc-bonds
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https://decrypt.co/310433/strategy-unveils-500m-stock-raise
https://decrypt.co/310268/xapo-bank-debuts-bitcoin-loans-calls-out-predatory-crypto-lenders
https://bitcoinmagazine.com/featured/bitcoin-covenants-what-are-they-and-what-do-they-do
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[00:00:02]
David Bennett:
It is 08:40AM Pacific Daylight Time. It's the March 2025, and this is episode ten, fifty six of Bitcoin. And, you know, screw it. Let's just jump right in with the Bank of Korea putting a gun to their head and pulling the trigger. Oh, I'm I'm sorry. I spelled Korea says no to bitcoin as a reserve asset. Wrong. Yeah. Yeah. Bitcoin news written by Alex Larry. The Bank of Korea has ruled out the possibility of including Bitcoin in its foreign exchange reserves despite rising global talk about Bitcoin being part of national financial strategies, South Korea's central bank remains firm, citing, of course, high volatility and liquidity concerns.
Only one of those is actually correct, people. Not there is no liquidity concern. Volatility? Yes. Liquidity? Not an issue. Anyway, representative Cha Gyu Jin of the National Assembly Planning and Finance Committee asked the Bank of Korea if they had ever discussed or reviewed the possibility of adding Bitcoin to the reserves, and the answer was neither discussed nor was it reviewed. Officials said a cautious approach is needed when it comes to digital assets. One of the reasons for this caution is the extreme price fluctuation of Bitcoin. The central bank pointed out that Bitcoin's price recently went up to a hundred and $8,000 and down to 76,000 before stabilizing at somewhere around 84,000, and such volatility makes relying on it impossible as a stable financial asset.
The Bank of Korea warned that, quote, in the case of cryptocurrency market instability, transaction costs to cash out Bitcoins could rise drastically. This means they believe that during financial crises, converting Bitcoin to cash could get expensive and inefficient. Also, the central bank said its foreign exchange reserves must be liquid and available when needed, something Bitcoin does not guarantee. Reserves also need to have investment grade credit rating, another factor Bitcoin fails to meet. The Bank of Korea's decision is in line with the International Monetary Fund, you guessed it, which sets strict standards for foreign exchange reserves.
According to the IMF, reserve assets must be liquid, marketable, and have high credit ratings. The b o k or Bank of Korea said that Bitcoin does not meet these criteria, so it's not suitable for South Korea's reserve because we get on our knees and service what the IMF says to please the crown. No. That was actually not in the story, but whatever. Many central banks are still cautious, but some countries have been more open. The Czech Republic and Brazil have considered holding Bitcoin in national reserves. The United States government even has a strategic Bitcoin reserve consisting, of course, of stolen Bitcoin acquired through legal actions. Yeah. They didn't say stolen, but it is stolen.
And I don't think it's legal either, but whatever. Major institutions like the European Central Bank, however, and the Swiss National Bank have rejected Bitcoin as a reserve asset. The Bank of Korea is declining Bitcoin as a reserve, but the country is still active in the Bitcoin space. Reports say that South Korea is planning to lift a long standing ban on institutional digital asset investments and allow corporate entities to trade them. This could boost the country's already booming digital asset market where 30% of the population invests in digital assets of one form or another.
Meanwhile, the government is also exploring the possibility of launching a wand backed stablecoin, a digital asset tied to the country's currency. And some experts think stablecoins, not Bitcoin, will play a bigger role in future financial strategies. Quote, whether the IMF will recognize stablecoins as foreign exchange reserves in the future is important, said professor Kang Tae Soo from the Case Graduate School of Finance. The debate about Bitcoin as a reserve asset is getting more intense after Donald Trump's executive order to create such a national reserve. Okay. That's the end of the article. So we're we're we're we've determined that South Korea has taken themselves behind the woods yet.
However, here's the thing. I wanna read this back to you. The government is also exploring the possibility of launching a wand back stablecoin because some experts think stablecoins, not Bitcoin, will play a bigger role in future financial strategies. Yeah. In the short term. And a lot of people are saying, well, we don't need Bitcoin because we've got these stablecoins. They're missing the point. They're completely missing the point. They're 100% missing the point because the stable coin is backed by the bullshit fiat currency that is causing the problems to begin with.
Just because you've yeah. What what's what's what's the description here? Just because you mold a thing into something else that looks completely different but is still made of the material the original thing came from, you've got the same thing. It doesn't matter what shape, color, format it comes in. Stablecoins is fiat currency. It's not it's not Bitcoin. It's it's not going to play a bigger role in the world financial markets because it's because it's like some kind of Bitcoin 2 point o. No. It is going to be an instrumentation that nations use to transmit their debt to other nations.
And the bit the the biggest debt that's going to be transmitted to other nations, essentially making the citizenry of the world even more poor, is gonna be The United States through Tether, USDC. Okay? That's the circle version of of Tether. United States treasury bonds and their issuance. That that's what's going to happen in the short to medium term. So, yes, in a way, they're not exactly lying. It's gonna take play a bigger role in financial markets other than, you know, more moreover than Bitcoin will in the short to medium term, but it's not going to be doing what Bitcoin does. It's going to be doing what fiat currency was always designed to do, to make people poor and then keep them that way. And that's exactly how South Korea is falling in line.
This next one by Danny Park from The Block headline South Korean Central Bank to start Hangang CBDC pilot with 100,000 citizens next month. Now they alluded to this in the last story that I just read you. We're gonna get the meat and potatoes here. The Bank of Korea will hold trials for its CBDC project from April to June according to local media reports. This pilot named Hangang is expected to involve 100,000 participants in seven major local banks including KB Cookman, Shinhan, Hana, and Woori Bank. When the BOK issues pilot CBDCs, participants can convert their bank deposits into tokenized deposits to pay local vendors including convenience stores, coffee shops, supermarkets, and online shops.
Local news outlet, Junang Ibo, reported that mobile banking apps would make payments via QR payment functions. With the experiment, the Bank of Korea plans to examine whether distributed ledger technology can replace the traditional settlement method of local banks that rely on central bank reserves. See see how this is all that's happening to stablecoins. I I'm pretty sure that Tether, when they came up with Tether what Bitfinex came up with Tether, right, they weren't possibly thinking that this is what was going to be done. But this is in fact what is happening. Stablecoins are just being converted into a tool of legacy financial markets to extend their life because they are, in fact, on life support.
Anyway, a a Bank of Korea representative reportedly said that tokenized deposit payments can minimize involvements of intermediaries in transactions and enable merchants to receive real time settlements. And according to the report, the maximum number of deposit tokens an individual participant can hold is 1,000,000 Korean won, which is about $689 US. Participants tokenized bank deposits back into cash. The block has reached out to the BOK for further comments on the CBDC trial. But while the South Korean Central Bank is forging ahead with its own CBDC efforts, it recently announced that it has not considered creating a Bitcoin reserve. And then we go into what we just covered in the last story.
Do not think for an instant that stablecoins are going away. Also, do not believe the hype. Stablecoins were never designed to take the place of Bitcoin. And the guys over at Tether will tell you that too. And I'm sure even though Jeremy Allaire is one of the scummiest people on the face of the planet, he'd probably say the same damn thing. That is not Stablecoins function. You're not gonna save in Stablecoin because Stablecoin continues to be printed to reflect its fiat cousin, the dollar, the yuan, the yen, the ruble, whatever. Right? It stablecoins are not Bitcoin.
They do not have a cap on the amount of tokens that can be generated. These things will be created and they will be burned pretty much in line with United States treasury bonds or if we're talking about, like, Korea, whatever it is they're doing over there in their own legacy financial markets. Don't let anybody fool you into believing that we don't need Bitcoin because we have Stablecoin. We still need Bitcoin because Stablecoin ain't nothing but Fiat. Now the Circle p is open for business. And once again, I bring to you SoapMiner. And you can go to soapminer.com to get your soap. In fact, it's handmade tallow soap.
Looks pretty good. Now me, myself, I haven't actually tried it. I know. Bad host. Bad host. But, hey, this is value for value advertising. I SoapMiner didn't reach out to me and say, hey. I'll pay you I'll pay you money if you talk about my product on the air. No. Because if that were to happen, I kinda do need to actually try the product. This is plebs like me bringing plebs like you, goods and services from plebs like you. Because everybody needs a hand up. I've, you know, I've got an audience. It may not be massive, but I have one. And if you're part of this audience and you're interested in having soap that's made out of fat, lye, and water, which is pretty much all the ingredients that are involved in this soap, unless you get, like, peppermint tallow or lavender, you know, or pine tar, you know, or tea tree. It's gonna have a little bit of essential oils in it for the for the, aroma. But other than that, man, this this looks like really clean soap. So go over to soapminer.com.
That's soap miner, s o a p, miner dot com. And if there's any way you can tell Soap Miner that you bought his soap because he hurt you heard it here on the circle p, maybe he'll kick back some to me. And I haven't even really talked to SoapMiner about that. That's what's beautiful beautiful about the value for value advertising model here on the Circle p is I have a tendency not to ask people's permission, and they don't kill me. Now let's get into this one. DMD, Demand, is launching its first stratum v two mining or Bitcoin mining pool and closes venture capital investment. This is written by Nick out of Bitcoin magazine. Demandpool, otherwise known as DMND, the world's first stratum v two buy Bitcoin mining pool has officially opened applications for miners to join as launch partners according to a press release.
In addition to the launch announcement, they also confirmed the successful closing of its venture capital financing. Quote, the Bitcoin mining industry has a key problem, which I've pointed out over my ten year career. Mining pool centralization, said Alejandro de la Torre, DMND cofounder and CEO. Quote, this is why it's paramount that we make Stratum v two a reality. SV two will help decentralize Bitcoin mining by allowing miners to build their own blocks. With the release of Demand Pool, the world's first Stratum v two pool, we help combat this problem, a historic moment for Bitcoin. Stratum v two represents a major evolution in Bitcoin mining, offering enhanced decentralization, privacy, and security by enabling miners to construct their own block templates.
Unlike traditional mining pools where pool operators dictate transaction selection, Stratum v two shifts control back to the miners. Demand pools implements end to end encryption to prevent hash rate hijacking, ensuring greater security of minor operations. Additionally, its slice payment system introduces auditable transactions and no hidden fees guaranteeing maximum miner payouts in a fair and transparent manner. The mining industry has long struggled with opaque fee structures and centralized block constructions. Demandpool's implementation of Stratum v two and the slice payment system aims to address both these issues ensuring fair payouts and greater control for miners while reinforcing Bitcoin's decentralization.
Quote, the mining pool industry is one where murky fee payouts and relative centralization have become the norm, said Christopher Calicott, TVP's managing director and founding partner. Quote, by empowering miner operations to securely and privately design their own block templates while facilitating radical transparency and fairness of payments to mining pool participants, Demand Pool will bring a new era to the mining industry. Mining operators of any size from small home miners to publicly traded giants will all work to enhance Bitcoin's decentralization. Mining operators interested in contributing to the first ever Stratum v two block can apply via Demand's official website, and website, of course, is www.dmnd.work.
So go to dmnd.work. That's dm,nasinNancy,d.work. Applications for launch partners will close March 2025 at midnight PST. I wonder if they'll accept my bid acts. I might actually have to apply for that. Let's move on. This is probably gonna be a shorter show, by the way. Meta Planet is buying $12,500,000 worth of BTC. It issues bonds to purchase more Bitcoin as well according to Timmy Shin out of the block. Meta Planet, a Japanese investment firm that continues to accumulate Bitcoin, purchased an additional $12,500,000 worth of the world's largest cryptocurrency.
The Tokyo listed firm disclosed on Tuesday that it acquired an additional 150 Bitcoin for about $12,500,000 at an average price of $83,508 per Bitcoin. The latest purchase boosted the firm's total holdings to 3,200 BTC acquired for about 266,200,000.0 according to Meta Planet CEO Simon Gurevich. And based on the current market prices, the firm's 3,200 BTC is worth about $265,900,000, so they're kinda sitting on a loss. Also on Tuesday, Meta Planet raised 2,000,000,000 yen, about $13,300,000 US, through bond issuance to buy yet more Bitcoin. Meta Planet has embarked on a Bitcoin buying spree since adopting a Bitcoin accumulation strategy back in April of twenty twenty four. It aims to hold 10,000 BTC by the end of twenty twenty five.
And Meta Planet stock closed down almost half a percent, you know, on Tuesday. So, hey, it is what it is. People are calling for the bear market. We had a huge whale with a $40,000,000 short yesterday, fighting all the bulls trying to keep their everything in place, and he won. The bear won. He closed all his shorts successfully and walked away with something like, I don't know, $6,800,000 or something like that. Hey, this I'm, you know, I'm not sure if I would call bears or bull markets right now because this crab walk down, I think, is just a huge lull because nobody knows what the hell Trump's gonna do.
Nobody knows what the rest like, these states with their Bitcoin reserve acts. Nobody knows if any of them are actually going to be successful because until the governor of one of these states actually signs one, it's all just up in the air. Right? It's all conjecture. And markets hate conjecture even if it's the Bitcoin markets. So just I hold on. Yeah. I don't know. BTFD, dude. I I don't know what to tell you other than that we're gonna run the numbers. Futures and commodities, we got West Texas Intermediate Oil taking it on the chin down a half point to $67.24. Britney is down a third to $70.86.
Natural gas, however, moving the opposite direction as it always does, up 1.52% to just above $4, $4.07, in fact. And gasoline is down point 44% to $2.17 a gallon. I swear I I swear in the in the commodities markets or at least for energy futures that natural gas is used as a hedge to to balance out oil. I'd be it always moves in the opposite direction. If oil goes up, natural gas goes down. If oil goes down, natural gas goes up. And I don't think it has anything to do with demand. I think it's the energy guys trying to make sure that they don't completely tank the energy production companies because once you start getting at the at the numbers that we're at right now on just crude oil, that's it's not all that good for oil companies.
So that's why I think that natural gas is used as a hedge on the other side of that gamble so that these people don't start shutting in their wells and stopping production and wait until higher prices. Because some that's what some of these companies do. Do not be fooled about that shit. They don't just continue to pump no matter what the price is. Now metals, doing okay, kind of mixed. Gold, however, shooting for a new all time high at $3,038.80 after rising another point. Silver is up almost a full point. Platinum is down a half. Copper is down a half. Palladium is down. No. Copper is actually up a half. Palladium is down a quarter of a point. Biggest winner in ag today looks to be chocolate. 2.4% to the upside.
Biggest loser is lumber, one and a third on the down. Live cattle is down a third. Lean hogs down 1%. And feeder cattle, basically crab walking sideways for the day. Nobody is happy in equity markets, so I don't know what happened. I don't know if orange man said tariffs again. Bitcoin's down. Legacy financials are down. Everything's down. So whatever caused the blood in the street today, I'm not sure, but the Dow is down almost a full point. That's it shedding 376 off of its, its, quote, unquote, price, relative anyway.
S and P is down one and a third. Nasdaq is down almost two full points. It's blood. Blood everywhere. It's showers. It's raining blood. S and P Mini is down a point as well. And so was Bitcoin. We well, we saw that short close and, well, we're down to $81,710. That puts us at a $1,620,000,000,000 market cap, and we're losing ground against gold. 26.8 ounces of shiny metal rocks can be had now with your one Bitcoin of which there are 19,838,369.71 of, and fees are really low. 0.03 BTC taking fees on a per block basis, and there are about 12 blocks carrying 14,000 unconfirmed transactions waiting to clear at high priorities of five Satoshis per vbyte. Low priority is gonna get you in at three.
Still though, hash rate gaining again. We're up to 813.4 exahashes per second. The miners continue to be optimistic. Maybe they know something. I don't know. Anyway, let's get on over to Kentucky Fried Bitcoin. That was yesterday's episode of Bitcoin, and let's see what I got here. Do I have anybody? Oh, Oak Grove with 1,055 says Putin had stayed at the beginning of the sanctions that he would take gold or BTC. Oh, stated Stated at the beginning of the sanctions that he would take gold or BTC for oil. What more do you want in money? Even an enemy of our, quote, all powerful state can use it. That's right. Bitcoin is for enemies. Psyduck with 507 60 6 sat says Psyduck.
Pies with $4.20 says thank you, sir. No. Thank you. Bitcoin Sandy with 500 gives me a fire emoji. Yodl with 300 says, hi. Anonymous with a hundred says, great show as always. Keep up the good work. Thank you, sir. No. Thank you. Oak Grove made a correction to his spelling with a hundred sats. He paid for his own correction. Oak Grove, you are the man. He says, stated. Stated, not stayed. Sailor closes. Oh, so sorry. Sailor closer to his spending limit? No. I think he's just waiting, Oak Grove. I think he's I think he's, like, figured finally figured it out that maybe he shouldn't be pulling triggers the way he's been pulling triggers. And with orange man said you know, just deciding every once in a while to get up off the toilet and flush and come out of the bathroom and just look at the cameras and go tariff and everybody shits the bed, you know, it was it is in his best interest to let this geopolitical landscape kinda, I don't know, kinda smooth out a little bit. But, anyway, that's the weather report.
And welcome to part two of the news you can use where MicroStrategy, which is now strategy, has unveiled yet something new. I thought it was something old. I thought somehow or another Andrei Begonski from Decrypt was talking about something like the the strike stock that they invented and conjured out of thin air a few weeks ago. No. No. No. No. No. This is brand new. This is like today. So strategy has unveiled a $500,000,000 stock raise to buy more Bitcoin. Okay. That sounds familiar. Does it not? If you've listened to the show, you've probably heard me say something along those lines as as far as headlines are concerned several times. Yet here we are one more time and it's different.
Strategy, formerly known as MicroStrategy, said that on Tuesday, the software firm plans to raise as much as $500,000,000 through a brand new offering to buy more Bitcoin. Well, the company plans to issue a new form, a brand spanking new form of perpetual preferred stock, and they're calling it Strife. Now remember, the other one was called Strike. This one is different. This one is not only named different, it does a different thing. It's called Strife, and it's going to cost $100 per share, and it's going to pay a fixed rate of 10%, the company said in a press release.
And, of course, because plebs are the most hated scum of the earth, this is available only to institutional investors. Strategy's new stock would pay its very first dividend in around a hundred days unless you're a pleb, in which case, screw you. What makes the new offering distinct to Strategy's so called strike, which was another form of perpetual preferred product. Well, its dividend is only payable in cash. Strategy was able to raise billions of dollars last year by selling stock in so called convertible bonds, which offer 0% interest.
Strategy's Strife offering pays 10% interest, which is more than the 8% dividend for Strategy's Strike offering back in January. On Monday, the company announced that it had purchased around $10,700,000 worth of Bitcoin. Within holdings of the asset that are currently worth around 41,400,000,000.0, the recent purchase grew strategies Bitcoin stash by a measly 0.026%. Although the company waited several weeks to unveil its latest Bitcoin purchase, analysts told Decrypt that there's no indication strategies Bitcoin buys will cease soon despite market conditions that have made it harder for the company to raise cash to buy Bitcoin.
On Tuesday, the company's strike or stock price dropped when markets opened, showing a 6.5% decrease at around $275 according to Yahoo Finance. Strategy shares have fallen 5.5% on the year, but have still doubled in value over the past six months. Wow. Speaking of future proof citywide wait. Sorry. Speaking at future proof citywide in Miami on Monday, strategy cofounder and executive chairman, Michael Saylor, noted Bitcoin's recent price drop, shifting rate cut expectations, tariffs, and economic fears have led to a macro risk off zone.
Quote, when that flips, I think Bitcoin will rip forward with a vengeance. That's the end of the article. I agree. I I you know, and it's not because I'm trying to, you know, blow smoke up your ass. Nobody knows what to do in any of these markets. When if we can get this whole, what is it, rate cut expectations, tariffs, economic fears, possibility of World War three. If we can get just some of this crap figured out, ironed out, and put to bed, then it won't be just Bitcoin that rips. It'll be, you know, gold's ripping right now because, you know, most people know that. They're like, yeah, I'm I'm familiar with gold, but they're still mostly holding paper. You know? That's a that's a very dangerous thing. If you don't possess the physical asset, which means you need a safe, and depending on how much gold you actually physically possess, you're gonna need guards. And now you're either gonna do this at a bank with use the bank guards or somewhere else. But if you're doing it at your house, this can become a very expensive proposition to hold gold. I don't have anything against gold. Other than that, it's very much more expensive to hold versus actual physical Bitcoin. That's much easier and way cheaper to hold.
But equity markets will rip too. The guys that are in equity markets and they want to play around with their Dow and they wanna they wanna have fun with their Nasdaq and all that stuff, those markets are gonna rip as well. You're gonna see oil prices go up too, and probably the rest of the commodities outside of gold. Nobody knows what to do. That's what's going on. We we talk about fear. It's not really fear as much as nobody knows what to do. This is like being lost in the middle of, you know, I don't know, Arizona, and there's, like, one gas station, and you can't read a map, and you pull in, and you're embarrassed as hell trying to ask directions to a yokel who looks at you going, oh, you're one of them big shitty boys, ain't you? Yeah. I'm just gonna mess with you. See, no you don't even trust this guy. Nobody can tell you what to do. You have no idea where the hell you are. And if you think you're the only one in this market, you're lying to yourself.
There are suits that have been wearing ties for forty years that have absolutely no freaking idea what to do with themselves. Anyway, let's move on where I bring it to you one more time. Soap miner, he has a shopster, s h o p s t r dot store. That's shopster.store. It's based on Nostr, and he has his own little stall on shopster where he's selling rough cut tallow soaps. And this stuff, man, you it's like $21, and you get three four ounce bars of it. Shipping in The United States is free. So and by the way, not only is soapminer.com available to you to get this wonderful what I'm assuming is wonderful soap because, yes, I have not tried it.
You can also get it on Shopster and all of that, all of those URLs, his Twitter account, his nostril handle, his this shopster. Store stall, and soapminer.com. All of those URLs are in the show notes under the heading circle p. Make sure you tell SoapMiner you heard about his soap here on the Circle p. In fact, even if you don't buy soap, tag him on Twitter. Tag him on Noster and say, hey, SoapMiner. I heard about your soap, dude. It was on the Circle p. Just tell him. Just just let him know that I'm I'm I I I'm looking at his bars of soap. They look actually really, really cool, and I love his packaging, very minimal. But what I love the most is the ingredient list, especially in the rough cut tallow. It's got, like, no perfume. It's got three ingredients.
Absolutely amazing. I love it when people do that, when they respect simplicity and they respect nature. Now here's some people that probably do not respect nature. Zappo Bank. Now I'm sure they're fine. I'm I'm sure they're they're staffed by some good wholesome folk, But I don't like what I'm about to read you. Out of Decrypt and Andrei Begonski. Again, Zappo bank debuts Bitcoin loans. And then they go so far as to call out predatory crypto lenders. Ladies and gentlemen, does this sound familiar? It should. BlockFi.
Do I have to say the name twice? I will. BlockFi. If you don't know what happened to BlockFi as it was connected to FTX and Alameda and all the rest of the debacle that happened, you might wanna go check it out, and you also might wanna look at what they used to say about their Bitcoin loans and who they called out for predatory loans. Be freaking careful with this Gibraltar based private bank, Zappo, because it said on Tuesday that it's now accepting members' Bitcoin as collateral for cash loans. The new brand spanking new service allows customers to access up to $1,000,000 in Bitcoin backed debt. This is not good except for those located in, of course, The United Kingdom and Australia.
Gotti Chait, a Zappo investment manager, told Decrypt, quote, we think it's a great piece of collateral to lend against, Chait said, referring to the asset that Zappo has safeguarded on behalf of customers since 2013. As Wall Street firms like Cantor Fitzgerald develop their own Bitcoin financing businesses, Chetan Zappo is expanding its one stop shop to give customers more options in most regions. Zappo was among the very first crypto banks to establish a physical headquarters in Europe, settling down in the British overseas territory of Gibraltar during crypto's pandemic era boom.
And last year, the firm said that it gained regulatory approval in The UK, allowing it to provide interest bearing Bitcoin accounts among other banking services to customers in the region. Within The United States, Bitcoin backed lending has recently made a return. Yeah. Much to the chagrin of anybody who doesn't wanna lose their money. While companies like Coinbase ceased issuing Bitcoin backed loans in 2023, San Francisco based exchange restarted them in January, tapping a decentralized lending protocol called Morpho. Some asset managers are using decentralized finance or DeFi to earn yield. Dangerous word here, guys. When you hear the word yield, your question is what?
Where does it come from? Where does the yield come from? That's the only question that's relevant. Anyway, to earn yield from Bitcoin backed loans as well, Among them is Bitwise, which recently made an allocation on Maple Finance, the lending protocol said earlier this month. Zappo, of course, is a centralized entity, and the bank's customers need approval, and the corresponding Bitcoin is held in a vault until the loan is repaid over a period of time. No. Sorry. Over a period of time that can last as long as a year according to his statements. The crypto lending industry was among the busiest corners of crypto heading into 2022, but following a series of high profile bankruptcies that culminated in the collapse of FTX.
The practice fell out of favor with market participants while drawing regulatory heat in The US. Quote, many long term Bitcoin huddlers have steered away from crypto asset backed lending after seeing predatory lending practices and products that they couldn't count on. That's why we're doing things differently, Zappos CEO Seamus Roca said in a statement. Zappos was founded by Wences Saceras, an entrepreneur born in Argentina. In 2015, LinkedIn cofounder Reid Hoffman described him as patient zero for Bitcoin in Silicon Valley and among the earliest Bitcoin devotees in The United States per Entrepreneur Magazine.
Okay. Zappo has been around for a long time. I've I've known about this company for a long time, and they've they've pretty much been above board. Okay? I've got to say that. I have not seen Zappo do anything that is outside the realm or that is outside the purview of the general Bitcoin ethic. However, when we're talking about Bitcoin loans, you have to be careful because you're you're looking at your Bitcoin right now and you're saying, hey, man, I got two Bitcoin. I'm gonna I'm gonna leverage one, and I'm gonna take out an $81,000 loan.
Yeah. If that song bitch drops to 75, you're liquidated. If it drops to 80, you may depend and this clearly depends on what kind of deal you work out with any Bitcoin lending service. But if your collateral drops below the value of the loan that you took out against the collateral, that bank is gonna hello? We want our money. They're gonna want liquidation. Alright? So then you go, okay. I'll tell you what. I really only need a $40,000 loan. Bitcoin's chilling out at $81,000. What could possibly go wrong? Well, I don't know. Ask the people that got liquidated out of BlockFi, and those are the people that got liquidated before BlockFi themselves got liquidated in bankruptcy.
Don't do this. Like I said, don't you know, I am the person that tells you exactly the opposite of what a bill what billionaires tell you, which is maybe why you shouldn't listen to me. But even Michael Saylor is like, rack up your credit cards, get a second mortgage. I'm saying no. Don't do that. That can put you in a world of hurt if shit turns south on you. And in this market right now, this is the worst product. This is the absolute god awful worst product that could come to market. They should've just waited until they figured out what Trump was gonna do with the damn tariffs to announce this thing. But no. No. They're announcing it right now, which, you know, leads me to believe that maybe maybe they can't wait.
Well, who knows? Loans may be governed some loans may be governed by covenants. And you hear a lot about covenants, and hardly anybody actually knows what it means when we talk about these Bitcoin covenants. Shinobi to the rescue from Bitcoin magazine. Bitcoin covenants, what are they, and what do they actually do? Let's find out. This word has become one of the most charged words in the Bitcoin space. They're the best thing since sliced bread. They're the most dangerous thing since the atom bomb. They aren't really going to do anything to scale Bitcoin, but they're neat. Everyone has a completely different attitude towards them. We have the pro faction, the anti faction, the ambivalent faction. And to make matters worse, covenant is frankly a very vague term in its description of mature and concrete proposals to the protocol that would be classified as covenants.
The degree of difference between the functionality of different proposals that have been put forward is enormous, and some of them create entirely new design spaces for what it is possible to build on top of Bitcoin, while others, strictly speaking, don't add any new functionality at all. They simply optimize things that already are currently possible with a large degree of complexity and overhead. Let's create a new definition specific to Bitcoin covenants. Covenant. Any script that guarantees some or all of the outputs created by a transaction spending an input with a covenant script will have to fit certain specified criteria for the spending transaction to be consensus valid.
So in less strict terms, if a Bitcoin script currently restricts who can spend a coin by demanding an authorization proof, I e, the cryptographic signature, or when it can be spent, I e, after a time lock expires, or Descender can show the preimage to a hash, a covenant script restricts how it can be spent. Like, for example, to who? How much? To which person? Etcetera etcetera. A covenant script can even restrict a coin so that it must be spent to some other covenant script. That last part is the core of what has made covenants such a contentious word.
Many people have large reservations about adding a new way to, quote, lock Bitcoin that can self propagate and ensure future coins are restricted in a similar fashion. Many people have concerns about this being used to damage fungibility or institute censorship regimes. I feel it necessary to point out that both of these things can be accomplished right now with no covenant script capabilities simply by using multisig. Any authority can refuse to allow withdrawals to be processed from exchanges unless they are a two of two multisig where that authority holds one key.
From there, they can simply refuse to sign transactions sending to addresses where they do not hold a required key and establish whatever blacklist or whitelist scheme they desired opaquely and entirely off chain. Well, with that said, it's still important for Bitcoin users to have a grasp and understanding of the difference of power and flexibility between the different covenant proposals that currently exist. There are two core things that covenants seek to enable in order to apply restrictions on how coins are spent. Introspection and forward data carrying.
Introspection is the ability to inspect different parts of the transaction that is being evaluated while trying to spend a specific coin. So for instance, if you want to restrict a coin so that it has to be spent to some specific address, you have to be able to compare the address specified in the input's covenant script to the address specified in the output of the transaction that is spending it. Opcodes that enable introspection are ones that give us the ability to compare different parts of the spending transaction against restrictions included in the script being evaluated.
And the more granular you can get with introspection concerning which particular parts of the transaction you can examine, the more powerful it becomes. Forward data carrying is related to introspection and, in many ways, a consequence of it. That allows you to ensure some piece of information is carried forward and included in each new covenant script so that it can be used in the next evaluation of the covenant script. This is accomplished by using introspection to restrict certain parts of the transaction so tightly that they must include the exact desired data or they're invalid.
The more powerful introspective capability you have, the more flexibility you can carry data forward, and the more flexibility you can use that data. This is just the first introduction to a series of articles to come over the next few weeks looking at all the major covenant proposals that are in a mature state, have received recent interest, or are conceptually critically important enough that developers agree on their usefulness, but not yet a concrete design. This won't be 100% complete, but it will be relatively comprehensive. A few of them are are sorry. A few of them also are not strictly covenants per se, but compose very tightly with them. And this will include check template verify, check sig from stack, TX hash, alt vault, check contract verify, cat, and tweak verify.
And that's the end of the article. Thank you, Shenobi, for actually sitting down and telling me exactly what the hell you think a covenant is. And I think it's important that we get several different perspectives on this whole covenant deal because we we're we're not really talking about it right now because nobody knows what the hell is going on in the markets and we're all concerned with the price of Bitcoin and blah blah blah. But before that, we were really concerned with covenants. And like Shenobi said, there are people that are pro covenant and there are people that are anti covenant, and I've heard both the arguments. And I I'm not really sure, you know, where I'm at, but I think my gut is kinda telling me that I'm leaning towards pro covenant. And the reason is is because I like the idea of being able to say, I'm walking let's just give like, my for my kids.
I'm walking one Bitcoin. Not only do you get the Bitcoin upon my death and my lawyer who's got an active key that, you know, helps with the covenant or whatever, you you gotta do all that stuff, but you can't just spend it into cash. Nah. Uh-uh. You can't do that. I send that information forward as a covenant. Another way to look at covenants is like housing covenants in cities when they build houses. A lot of cities, almost all cities have some form of covenant or another. Like, one of the covenants that you'll find in the city is that when you buy a house, you don't own the sidewalk. In fact, in places like Lubbock, Texas, from the curb to the edge of the to the inner edge of the sidewalk, which is the one closest to your house, and then add three more feet.
You don't own the seven foot strip in front of your house in Lubbock, Texas. That's a covenant. Another covenant in Lubbock is that you cannot build a house with a basement. And that comes back from the slave days when they people were keeping slaves in their basements. So they were like, okay. We'll just make sure that nobody can build basements anymore and that will take care of it. That's a covenant. And that covenant is still in place in Lubbock, Texas to this very day. That's another way to think about covenants. So now when I lock this one Bitcoin for my kids that they can have when I die, the covenant is you can't spend it into cash.
You have to you have to do something else with it, and that's where the scripts come in. Be being able to describe in great detail how this Bitcoin can be used, and that is what activates the anti covenant guys. Because that's where where we start affecting fungibility. Well, I've got this Bitcoin that's not covenant locked, and I can spend it into cash. But then we have this, I've got my dad's Bitcoin, but I can't spend it into cash because it's just not going to allow that however it is that I work that script. Right? So those two Bitcoin functionally become different, which means what?
Those two Bitcoin are not like each other, which means what? Those two Bitcoin are not fungible. And this is one of the reasons why we've got the anti covenant crowd. I think it's a little overblown, but they've got a point. And if we don't listen to them very carefully, we could get ourselves into a situation where we activate something that we don't want activated. What does that remind you of? Can you say covenants and inscriptions? Except this time, it could be a lot worse. We should take our good sweet time when it comes to covenants and activation.
And I look forward to seeing whatever else it is that Shinobi writes. And I think that's gonna do it for the day. Ladies and gentlemen, episode ten fifty six of Bitcoin and is in the bag, and I'll see you on the other side. This has been Bitcoin and, and I'm your host, David Bennett. I hope you enjoyed today's episode and hope to see you again real soon. Have a great day.
It is 08:40AM Pacific Daylight Time. It's the March 2025, and this is episode ten, fifty six of Bitcoin. And, you know, screw it. Let's just jump right in with the Bank of Korea putting a gun to their head and pulling the trigger. Oh, I'm I'm sorry. I spelled Korea says no to bitcoin as a reserve asset. Wrong. Yeah. Yeah. Bitcoin news written by Alex Larry. The Bank of Korea has ruled out the possibility of including Bitcoin in its foreign exchange reserves despite rising global talk about Bitcoin being part of national financial strategies, South Korea's central bank remains firm, citing, of course, high volatility and liquidity concerns.
Only one of those is actually correct, people. Not there is no liquidity concern. Volatility? Yes. Liquidity? Not an issue. Anyway, representative Cha Gyu Jin of the National Assembly Planning and Finance Committee asked the Bank of Korea if they had ever discussed or reviewed the possibility of adding Bitcoin to the reserves, and the answer was neither discussed nor was it reviewed. Officials said a cautious approach is needed when it comes to digital assets. One of the reasons for this caution is the extreme price fluctuation of Bitcoin. The central bank pointed out that Bitcoin's price recently went up to a hundred and $8,000 and down to 76,000 before stabilizing at somewhere around 84,000, and such volatility makes relying on it impossible as a stable financial asset.
The Bank of Korea warned that, quote, in the case of cryptocurrency market instability, transaction costs to cash out Bitcoins could rise drastically. This means they believe that during financial crises, converting Bitcoin to cash could get expensive and inefficient. Also, the central bank said its foreign exchange reserves must be liquid and available when needed, something Bitcoin does not guarantee. Reserves also need to have investment grade credit rating, another factor Bitcoin fails to meet. The Bank of Korea's decision is in line with the International Monetary Fund, you guessed it, which sets strict standards for foreign exchange reserves.
According to the IMF, reserve assets must be liquid, marketable, and have high credit ratings. The b o k or Bank of Korea said that Bitcoin does not meet these criteria, so it's not suitable for South Korea's reserve because we get on our knees and service what the IMF says to please the crown. No. That was actually not in the story, but whatever. Many central banks are still cautious, but some countries have been more open. The Czech Republic and Brazil have considered holding Bitcoin in national reserves. The United States government even has a strategic Bitcoin reserve consisting, of course, of stolen Bitcoin acquired through legal actions. Yeah. They didn't say stolen, but it is stolen.
And I don't think it's legal either, but whatever. Major institutions like the European Central Bank, however, and the Swiss National Bank have rejected Bitcoin as a reserve asset. The Bank of Korea is declining Bitcoin as a reserve, but the country is still active in the Bitcoin space. Reports say that South Korea is planning to lift a long standing ban on institutional digital asset investments and allow corporate entities to trade them. This could boost the country's already booming digital asset market where 30% of the population invests in digital assets of one form or another.
Meanwhile, the government is also exploring the possibility of launching a wand backed stablecoin, a digital asset tied to the country's currency. And some experts think stablecoins, not Bitcoin, will play a bigger role in future financial strategies. Quote, whether the IMF will recognize stablecoins as foreign exchange reserves in the future is important, said professor Kang Tae Soo from the Case Graduate School of Finance. The debate about Bitcoin as a reserve asset is getting more intense after Donald Trump's executive order to create such a national reserve. Okay. That's the end of the article. So we're we're we're we've determined that South Korea has taken themselves behind the woods yet.
However, here's the thing. I wanna read this back to you. The government is also exploring the possibility of launching a wand back stablecoin because some experts think stablecoins, not Bitcoin, will play a bigger role in future financial strategies. Yeah. In the short term. And a lot of people are saying, well, we don't need Bitcoin because we've got these stablecoins. They're missing the point. They're completely missing the point. They're 100% missing the point because the stable coin is backed by the bullshit fiat currency that is causing the problems to begin with.
Just because you've yeah. What what's what's what's the description here? Just because you mold a thing into something else that looks completely different but is still made of the material the original thing came from, you've got the same thing. It doesn't matter what shape, color, format it comes in. Stablecoins is fiat currency. It's not it's not Bitcoin. It's it's not going to play a bigger role in the world financial markets because it's because it's like some kind of Bitcoin 2 point o. No. It is going to be an instrumentation that nations use to transmit their debt to other nations.
And the bit the the biggest debt that's going to be transmitted to other nations, essentially making the citizenry of the world even more poor, is gonna be The United States through Tether, USDC. Okay? That's the circle version of of Tether. United States treasury bonds and their issuance. That that's what's going to happen in the short to medium term. So, yes, in a way, they're not exactly lying. It's gonna take play a bigger role in financial markets other than, you know, more moreover than Bitcoin will in the short to medium term, but it's not going to be doing what Bitcoin does. It's going to be doing what fiat currency was always designed to do, to make people poor and then keep them that way. And that's exactly how South Korea is falling in line.
This next one by Danny Park from The Block headline South Korean Central Bank to start Hangang CBDC pilot with 100,000 citizens next month. Now they alluded to this in the last story that I just read you. We're gonna get the meat and potatoes here. The Bank of Korea will hold trials for its CBDC project from April to June according to local media reports. This pilot named Hangang is expected to involve 100,000 participants in seven major local banks including KB Cookman, Shinhan, Hana, and Woori Bank. When the BOK issues pilot CBDCs, participants can convert their bank deposits into tokenized deposits to pay local vendors including convenience stores, coffee shops, supermarkets, and online shops.
Local news outlet, Junang Ibo, reported that mobile banking apps would make payments via QR payment functions. With the experiment, the Bank of Korea plans to examine whether distributed ledger technology can replace the traditional settlement method of local banks that rely on central bank reserves. See see how this is all that's happening to stablecoins. I I'm pretty sure that Tether, when they came up with Tether what Bitfinex came up with Tether, right, they weren't possibly thinking that this is what was going to be done. But this is in fact what is happening. Stablecoins are just being converted into a tool of legacy financial markets to extend their life because they are, in fact, on life support.
Anyway, a a Bank of Korea representative reportedly said that tokenized deposit payments can minimize involvements of intermediaries in transactions and enable merchants to receive real time settlements. And according to the report, the maximum number of deposit tokens an individual participant can hold is 1,000,000 Korean won, which is about $689 US. Participants tokenized bank deposits back into cash. The block has reached out to the BOK for further comments on the CBDC trial. But while the South Korean Central Bank is forging ahead with its own CBDC efforts, it recently announced that it has not considered creating a Bitcoin reserve. And then we go into what we just covered in the last story.
Do not think for an instant that stablecoins are going away. Also, do not believe the hype. Stablecoins were never designed to take the place of Bitcoin. And the guys over at Tether will tell you that too. And I'm sure even though Jeremy Allaire is one of the scummiest people on the face of the planet, he'd probably say the same damn thing. That is not Stablecoins function. You're not gonna save in Stablecoin because Stablecoin continues to be printed to reflect its fiat cousin, the dollar, the yuan, the yen, the ruble, whatever. Right? It stablecoins are not Bitcoin.
They do not have a cap on the amount of tokens that can be generated. These things will be created and they will be burned pretty much in line with United States treasury bonds or if we're talking about, like, Korea, whatever it is they're doing over there in their own legacy financial markets. Don't let anybody fool you into believing that we don't need Bitcoin because we have Stablecoin. We still need Bitcoin because Stablecoin ain't nothing but Fiat. Now the Circle p is open for business. And once again, I bring to you SoapMiner. And you can go to soapminer.com to get your soap. In fact, it's handmade tallow soap.
Looks pretty good. Now me, myself, I haven't actually tried it. I know. Bad host. Bad host. But, hey, this is value for value advertising. I SoapMiner didn't reach out to me and say, hey. I'll pay you I'll pay you money if you talk about my product on the air. No. Because if that were to happen, I kinda do need to actually try the product. This is plebs like me bringing plebs like you, goods and services from plebs like you. Because everybody needs a hand up. I've, you know, I've got an audience. It may not be massive, but I have one. And if you're part of this audience and you're interested in having soap that's made out of fat, lye, and water, which is pretty much all the ingredients that are involved in this soap, unless you get, like, peppermint tallow or lavender, you know, or pine tar, you know, or tea tree. It's gonna have a little bit of essential oils in it for the for the, aroma. But other than that, man, this this looks like really clean soap. So go over to soapminer.com.
That's soap miner, s o a p, miner dot com. And if there's any way you can tell Soap Miner that you bought his soap because he hurt you heard it here on the circle p, maybe he'll kick back some to me. And I haven't even really talked to SoapMiner about that. That's what's beautiful beautiful about the value for value advertising model here on the Circle p is I have a tendency not to ask people's permission, and they don't kill me. Now let's get into this one. DMD, Demand, is launching its first stratum v two mining or Bitcoin mining pool and closes venture capital investment. This is written by Nick out of Bitcoin magazine. Demandpool, otherwise known as DMND, the world's first stratum v two buy Bitcoin mining pool has officially opened applications for miners to join as launch partners according to a press release.
In addition to the launch announcement, they also confirmed the successful closing of its venture capital financing. Quote, the Bitcoin mining industry has a key problem, which I've pointed out over my ten year career. Mining pool centralization, said Alejandro de la Torre, DMND cofounder and CEO. Quote, this is why it's paramount that we make Stratum v two a reality. SV two will help decentralize Bitcoin mining by allowing miners to build their own blocks. With the release of Demand Pool, the world's first Stratum v two pool, we help combat this problem, a historic moment for Bitcoin. Stratum v two represents a major evolution in Bitcoin mining, offering enhanced decentralization, privacy, and security by enabling miners to construct their own block templates.
Unlike traditional mining pools where pool operators dictate transaction selection, Stratum v two shifts control back to the miners. Demand pools implements end to end encryption to prevent hash rate hijacking, ensuring greater security of minor operations. Additionally, its slice payment system introduces auditable transactions and no hidden fees guaranteeing maximum miner payouts in a fair and transparent manner. The mining industry has long struggled with opaque fee structures and centralized block constructions. Demandpool's implementation of Stratum v two and the slice payment system aims to address both these issues ensuring fair payouts and greater control for miners while reinforcing Bitcoin's decentralization.
Quote, the mining pool industry is one where murky fee payouts and relative centralization have become the norm, said Christopher Calicott, TVP's managing director and founding partner. Quote, by empowering miner operations to securely and privately design their own block templates while facilitating radical transparency and fairness of payments to mining pool participants, Demand Pool will bring a new era to the mining industry. Mining operators of any size from small home miners to publicly traded giants will all work to enhance Bitcoin's decentralization. Mining operators interested in contributing to the first ever Stratum v two block can apply via Demand's official website, and website, of course, is www.dmnd.work.
So go to dmnd.work. That's dm,nasinNancy,d.work. Applications for launch partners will close March 2025 at midnight PST. I wonder if they'll accept my bid acts. I might actually have to apply for that. Let's move on. This is probably gonna be a shorter show, by the way. Meta Planet is buying $12,500,000 worth of BTC. It issues bonds to purchase more Bitcoin as well according to Timmy Shin out of the block. Meta Planet, a Japanese investment firm that continues to accumulate Bitcoin, purchased an additional $12,500,000 worth of the world's largest cryptocurrency.
The Tokyo listed firm disclosed on Tuesday that it acquired an additional 150 Bitcoin for about $12,500,000 at an average price of $83,508 per Bitcoin. The latest purchase boosted the firm's total holdings to 3,200 BTC acquired for about 266,200,000.0 according to Meta Planet CEO Simon Gurevich. And based on the current market prices, the firm's 3,200 BTC is worth about $265,900,000, so they're kinda sitting on a loss. Also on Tuesday, Meta Planet raised 2,000,000,000 yen, about $13,300,000 US, through bond issuance to buy yet more Bitcoin. Meta Planet has embarked on a Bitcoin buying spree since adopting a Bitcoin accumulation strategy back in April of twenty twenty four. It aims to hold 10,000 BTC by the end of twenty twenty five.
And Meta Planet stock closed down almost half a percent, you know, on Tuesday. So, hey, it is what it is. People are calling for the bear market. We had a huge whale with a $40,000,000 short yesterday, fighting all the bulls trying to keep their everything in place, and he won. The bear won. He closed all his shorts successfully and walked away with something like, I don't know, $6,800,000 or something like that. Hey, this I'm, you know, I'm not sure if I would call bears or bull markets right now because this crab walk down, I think, is just a huge lull because nobody knows what the hell Trump's gonna do.
Nobody knows what the rest like, these states with their Bitcoin reserve acts. Nobody knows if any of them are actually going to be successful because until the governor of one of these states actually signs one, it's all just up in the air. Right? It's all conjecture. And markets hate conjecture even if it's the Bitcoin markets. So just I hold on. Yeah. I don't know. BTFD, dude. I I don't know what to tell you other than that we're gonna run the numbers. Futures and commodities, we got West Texas Intermediate Oil taking it on the chin down a half point to $67.24. Britney is down a third to $70.86.
Natural gas, however, moving the opposite direction as it always does, up 1.52% to just above $4, $4.07, in fact. And gasoline is down point 44% to $2.17 a gallon. I swear I I swear in the in the commodities markets or at least for energy futures that natural gas is used as a hedge to to balance out oil. I'd be it always moves in the opposite direction. If oil goes up, natural gas goes down. If oil goes down, natural gas goes up. And I don't think it has anything to do with demand. I think it's the energy guys trying to make sure that they don't completely tank the energy production companies because once you start getting at the at the numbers that we're at right now on just crude oil, that's it's not all that good for oil companies.
So that's why I think that natural gas is used as a hedge on the other side of that gamble so that these people don't start shutting in their wells and stopping production and wait until higher prices. Because some that's what some of these companies do. Do not be fooled about that shit. They don't just continue to pump no matter what the price is. Now metals, doing okay, kind of mixed. Gold, however, shooting for a new all time high at $3,038.80 after rising another point. Silver is up almost a full point. Platinum is down a half. Copper is down a half. Palladium is down. No. Copper is actually up a half. Palladium is down a quarter of a point. Biggest winner in ag today looks to be chocolate. 2.4% to the upside.
Biggest loser is lumber, one and a third on the down. Live cattle is down a third. Lean hogs down 1%. And feeder cattle, basically crab walking sideways for the day. Nobody is happy in equity markets, so I don't know what happened. I don't know if orange man said tariffs again. Bitcoin's down. Legacy financials are down. Everything's down. So whatever caused the blood in the street today, I'm not sure, but the Dow is down almost a full point. That's it shedding 376 off of its, its, quote, unquote, price, relative anyway.
S and P is down one and a third. Nasdaq is down almost two full points. It's blood. Blood everywhere. It's showers. It's raining blood. S and P Mini is down a point as well. And so was Bitcoin. We well, we saw that short close and, well, we're down to $81,710. That puts us at a $1,620,000,000,000 market cap, and we're losing ground against gold. 26.8 ounces of shiny metal rocks can be had now with your one Bitcoin of which there are 19,838,369.71 of, and fees are really low. 0.03 BTC taking fees on a per block basis, and there are about 12 blocks carrying 14,000 unconfirmed transactions waiting to clear at high priorities of five Satoshis per vbyte. Low priority is gonna get you in at three.
Still though, hash rate gaining again. We're up to 813.4 exahashes per second. The miners continue to be optimistic. Maybe they know something. I don't know. Anyway, let's get on over to Kentucky Fried Bitcoin. That was yesterday's episode of Bitcoin, and let's see what I got here. Do I have anybody? Oh, Oak Grove with 1,055 says Putin had stayed at the beginning of the sanctions that he would take gold or BTC. Oh, stated Stated at the beginning of the sanctions that he would take gold or BTC for oil. What more do you want in money? Even an enemy of our, quote, all powerful state can use it. That's right. Bitcoin is for enemies. Psyduck with 507 60 6 sat says Psyduck.
Pies with $4.20 says thank you, sir. No. Thank you. Bitcoin Sandy with 500 gives me a fire emoji. Yodl with 300 says, hi. Anonymous with a hundred says, great show as always. Keep up the good work. Thank you, sir. No. Thank you. Oak Grove made a correction to his spelling with a hundred sats. He paid for his own correction. Oak Grove, you are the man. He says, stated. Stated, not stayed. Sailor closes. Oh, so sorry. Sailor closer to his spending limit? No. I think he's just waiting, Oak Grove. I think he's I think he's, like, figured finally figured it out that maybe he shouldn't be pulling triggers the way he's been pulling triggers. And with orange man said you know, just deciding every once in a while to get up off the toilet and flush and come out of the bathroom and just look at the cameras and go tariff and everybody shits the bed, you know, it was it is in his best interest to let this geopolitical landscape kinda, I don't know, kinda smooth out a little bit. But, anyway, that's the weather report.
And welcome to part two of the news you can use where MicroStrategy, which is now strategy, has unveiled yet something new. I thought it was something old. I thought somehow or another Andrei Begonski from Decrypt was talking about something like the the strike stock that they invented and conjured out of thin air a few weeks ago. No. No. No. No. No. This is brand new. This is like today. So strategy has unveiled a $500,000,000 stock raise to buy more Bitcoin. Okay. That sounds familiar. Does it not? If you've listened to the show, you've probably heard me say something along those lines as as far as headlines are concerned several times. Yet here we are one more time and it's different.
Strategy, formerly known as MicroStrategy, said that on Tuesday, the software firm plans to raise as much as $500,000,000 through a brand new offering to buy more Bitcoin. Well, the company plans to issue a new form, a brand spanking new form of perpetual preferred stock, and they're calling it Strife. Now remember, the other one was called Strike. This one is different. This one is not only named different, it does a different thing. It's called Strife, and it's going to cost $100 per share, and it's going to pay a fixed rate of 10%, the company said in a press release.
And, of course, because plebs are the most hated scum of the earth, this is available only to institutional investors. Strategy's new stock would pay its very first dividend in around a hundred days unless you're a pleb, in which case, screw you. What makes the new offering distinct to Strategy's so called strike, which was another form of perpetual preferred product. Well, its dividend is only payable in cash. Strategy was able to raise billions of dollars last year by selling stock in so called convertible bonds, which offer 0% interest.
Strategy's Strife offering pays 10% interest, which is more than the 8% dividend for Strategy's Strike offering back in January. On Monday, the company announced that it had purchased around $10,700,000 worth of Bitcoin. Within holdings of the asset that are currently worth around 41,400,000,000.0, the recent purchase grew strategies Bitcoin stash by a measly 0.026%. Although the company waited several weeks to unveil its latest Bitcoin purchase, analysts told Decrypt that there's no indication strategies Bitcoin buys will cease soon despite market conditions that have made it harder for the company to raise cash to buy Bitcoin.
On Tuesday, the company's strike or stock price dropped when markets opened, showing a 6.5% decrease at around $275 according to Yahoo Finance. Strategy shares have fallen 5.5% on the year, but have still doubled in value over the past six months. Wow. Speaking of future proof citywide wait. Sorry. Speaking at future proof citywide in Miami on Monday, strategy cofounder and executive chairman, Michael Saylor, noted Bitcoin's recent price drop, shifting rate cut expectations, tariffs, and economic fears have led to a macro risk off zone.
Quote, when that flips, I think Bitcoin will rip forward with a vengeance. That's the end of the article. I agree. I I you know, and it's not because I'm trying to, you know, blow smoke up your ass. Nobody knows what to do in any of these markets. When if we can get this whole, what is it, rate cut expectations, tariffs, economic fears, possibility of World War three. If we can get just some of this crap figured out, ironed out, and put to bed, then it won't be just Bitcoin that rips. It'll be, you know, gold's ripping right now because, you know, most people know that. They're like, yeah, I'm I'm familiar with gold, but they're still mostly holding paper. You know? That's a that's a very dangerous thing. If you don't possess the physical asset, which means you need a safe, and depending on how much gold you actually physically possess, you're gonna need guards. And now you're either gonna do this at a bank with use the bank guards or somewhere else. But if you're doing it at your house, this can become a very expensive proposition to hold gold. I don't have anything against gold. Other than that, it's very much more expensive to hold versus actual physical Bitcoin. That's much easier and way cheaper to hold.
But equity markets will rip too. The guys that are in equity markets and they want to play around with their Dow and they wanna they wanna have fun with their Nasdaq and all that stuff, those markets are gonna rip as well. You're gonna see oil prices go up too, and probably the rest of the commodities outside of gold. Nobody knows what to do. That's what's going on. We we talk about fear. It's not really fear as much as nobody knows what to do. This is like being lost in the middle of, you know, I don't know, Arizona, and there's, like, one gas station, and you can't read a map, and you pull in, and you're embarrassed as hell trying to ask directions to a yokel who looks at you going, oh, you're one of them big shitty boys, ain't you? Yeah. I'm just gonna mess with you. See, no you don't even trust this guy. Nobody can tell you what to do. You have no idea where the hell you are. And if you think you're the only one in this market, you're lying to yourself.
There are suits that have been wearing ties for forty years that have absolutely no freaking idea what to do with themselves. Anyway, let's move on where I bring it to you one more time. Soap miner, he has a shopster, s h o p s t r dot store. That's shopster.store. It's based on Nostr, and he has his own little stall on shopster where he's selling rough cut tallow soaps. And this stuff, man, you it's like $21, and you get three four ounce bars of it. Shipping in The United States is free. So and by the way, not only is soapminer.com available to you to get this wonderful what I'm assuming is wonderful soap because, yes, I have not tried it.
You can also get it on Shopster and all of that, all of those URLs, his Twitter account, his nostril handle, his this shopster. Store stall, and soapminer.com. All of those URLs are in the show notes under the heading circle p. Make sure you tell SoapMiner you heard about his soap here on the Circle p. In fact, even if you don't buy soap, tag him on Twitter. Tag him on Noster and say, hey, SoapMiner. I heard about your soap, dude. It was on the Circle p. Just tell him. Just just let him know that I'm I'm I I I'm looking at his bars of soap. They look actually really, really cool, and I love his packaging, very minimal. But what I love the most is the ingredient list, especially in the rough cut tallow. It's got, like, no perfume. It's got three ingredients.
Absolutely amazing. I love it when people do that, when they respect simplicity and they respect nature. Now here's some people that probably do not respect nature. Zappo Bank. Now I'm sure they're fine. I'm I'm sure they're they're staffed by some good wholesome folk, But I don't like what I'm about to read you. Out of Decrypt and Andrei Begonski. Again, Zappo bank debuts Bitcoin loans. And then they go so far as to call out predatory crypto lenders. Ladies and gentlemen, does this sound familiar? It should. BlockFi.
Do I have to say the name twice? I will. BlockFi. If you don't know what happened to BlockFi as it was connected to FTX and Alameda and all the rest of the debacle that happened, you might wanna go check it out, and you also might wanna look at what they used to say about their Bitcoin loans and who they called out for predatory loans. Be freaking careful with this Gibraltar based private bank, Zappo, because it said on Tuesday that it's now accepting members' Bitcoin as collateral for cash loans. The new brand spanking new service allows customers to access up to $1,000,000 in Bitcoin backed debt. This is not good except for those located in, of course, The United Kingdom and Australia.
Gotti Chait, a Zappo investment manager, told Decrypt, quote, we think it's a great piece of collateral to lend against, Chait said, referring to the asset that Zappo has safeguarded on behalf of customers since 2013. As Wall Street firms like Cantor Fitzgerald develop their own Bitcoin financing businesses, Chetan Zappo is expanding its one stop shop to give customers more options in most regions. Zappo was among the very first crypto banks to establish a physical headquarters in Europe, settling down in the British overseas territory of Gibraltar during crypto's pandemic era boom.
And last year, the firm said that it gained regulatory approval in The UK, allowing it to provide interest bearing Bitcoin accounts among other banking services to customers in the region. Within The United States, Bitcoin backed lending has recently made a return. Yeah. Much to the chagrin of anybody who doesn't wanna lose their money. While companies like Coinbase ceased issuing Bitcoin backed loans in 2023, San Francisco based exchange restarted them in January, tapping a decentralized lending protocol called Morpho. Some asset managers are using decentralized finance or DeFi to earn yield. Dangerous word here, guys. When you hear the word yield, your question is what?
Where does it come from? Where does the yield come from? That's the only question that's relevant. Anyway, to earn yield from Bitcoin backed loans as well, Among them is Bitwise, which recently made an allocation on Maple Finance, the lending protocol said earlier this month. Zappo, of course, is a centralized entity, and the bank's customers need approval, and the corresponding Bitcoin is held in a vault until the loan is repaid over a period of time. No. Sorry. Over a period of time that can last as long as a year according to his statements. The crypto lending industry was among the busiest corners of crypto heading into 2022, but following a series of high profile bankruptcies that culminated in the collapse of FTX.
The practice fell out of favor with market participants while drawing regulatory heat in The US. Quote, many long term Bitcoin huddlers have steered away from crypto asset backed lending after seeing predatory lending practices and products that they couldn't count on. That's why we're doing things differently, Zappos CEO Seamus Roca said in a statement. Zappos was founded by Wences Saceras, an entrepreneur born in Argentina. In 2015, LinkedIn cofounder Reid Hoffman described him as patient zero for Bitcoin in Silicon Valley and among the earliest Bitcoin devotees in The United States per Entrepreneur Magazine.
Okay. Zappo has been around for a long time. I've I've known about this company for a long time, and they've they've pretty much been above board. Okay? I've got to say that. I have not seen Zappo do anything that is outside the realm or that is outside the purview of the general Bitcoin ethic. However, when we're talking about Bitcoin loans, you have to be careful because you're you're looking at your Bitcoin right now and you're saying, hey, man, I got two Bitcoin. I'm gonna I'm gonna leverage one, and I'm gonna take out an $81,000 loan.
Yeah. If that song bitch drops to 75, you're liquidated. If it drops to 80, you may depend and this clearly depends on what kind of deal you work out with any Bitcoin lending service. But if your collateral drops below the value of the loan that you took out against the collateral, that bank is gonna hello? We want our money. They're gonna want liquidation. Alright? So then you go, okay. I'll tell you what. I really only need a $40,000 loan. Bitcoin's chilling out at $81,000. What could possibly go wrong? Well, I don't know. Ask the people that got liquidated out of BlockFi, and those are the people that got liquidated before BlockFi themselves got liquidated in bankruptcy.
Don't do this. Like I said, don't you know, I am the person that tells you exactly the opposite of what a bill what billionaires tell you, which is maybe why you shouldn't listen to me. But even Michael Saylor is like, rack up your credit cards, get a second mortgage. I'm saying no. Don't do that. That can put you in a world of hurt if shit turns south on you. And in this market right now, this is the worst product. This is the absolute god awful worst product that could come to market. They should've just waited until they figured out what Trump was gonna do with the damn tariffs to announce this thing. But no. No. They're announcing it right now, which, you know, leads me to believe that maybe maybe they can't wait.
Well, who knows? Loans may be governed some loans may be governed by covenants. And you hear a lot about covenants, and hardly anybody actually knows what it means when we talk about these Bitcoin covenants. Shinobi to the rescue from Bitcoin magazine. Bitcoin covenants, what are they, and what do they actually do? Let's find out. This word has become one of the most charged words in the Bitcoin space. They're the best thing since sliced bread. They're the most dangerous thing since the atom bomb. They aren't really going to do anything to scale Bitcoin, but they're neat. Everyone has a completely different attitude towards them. We have the pro faction, the anti faction, the ambivalent faction. And to make matters worse, covenant is frankly a very vague term in its description of mature and concrete proposals to the protocol that would be classified as covenants.
The degree of difference between the functionality of different proposals that have been put forward is enormous, and some of them create entirely new design spaces for what it is possible to build on top of Bitcoin, while others, strictly speaking, don't add any new functionality at all. They simply optimize things that already are currently possible with a large degree of complexity and overhead. Let's create a new definition specific to Bitcoin covenants. Covenant. Any script that guarantees some or all of the outputs created by a transaction spending an input with a covenant script will have to fit certain specified criteria for the spending transaction to be consensus valid.
So in less strict terms, if a Bitcoin script currently restricts who can spend a coin by demanding an authorization proof, I e, the cryptographic signature, or when it can be spent, I e, after a time lock expires, or Descender can show the preimage to a hash, a covenant script restricts how it can be spent. Like, for example, to who? How much? To which person? Etcetera etcetera. A covenant script can even restrict a coin so that it must be spent to some other covenant script. That last part is the core of what has made covenants such a contentious word.
Many people have large reservations about adding a new way to, quote, lock Bitcoin that can self propagate and ensure future coins are restricted in a similar fashion. Many people have concerns about this being used to damage fungibility or institute censorship regimes. I feel it necessary to point out that both of these things can be accomplished right now with no covenant script capabilities simply by using multisig. Any authority can refuse to allow withdrawals to be processed from exchanges unless they are a two of two multisig where that authority holds one key.
From there, they can simply refuse to sign transactions sending to addresses where they do not hold a required key and establish whatever blacklist or whitelist scheme they desired opaquely and entirely off chain. Well, with that said, it's still important for Bitcoin users to have a grasp and understanding of the difference of power and flexibility between the different covenant proposals that currently exist. There are two core things that covenants seek to enable in order to apply restrictions on how coins are spent. Introspection and forward data carrying.
Introspection is the ability to inspect different parts of the transaction that is being evaluated while trying to spend a specific coin. So for instance, if you want to restrict a coin so that it has to be spent to some specific address, you have to be able to compare the address specified in the input's covenant script to the address specified in the output of the transaction that is spending it. Opcodes that enable introspection are ones that give us the ability to compare different parts of the spending transaction against restrictions included in the script being evaluated.
And the more granular you can get with introspection concerning which particular parts of the transaction you can examine, the more powerful it becomes. Forward data carrying is related to introspection and, in many ways, a consequence of it. That allows you to ensure some piece of information is carried forward and included in each new covenant script so that it can be used in the next evaluation of the covenant script. This is accomplished by using introspection to restrict certain parts of the transaction so tightly that they must include the exact desired data or they're invalid.
The more powerful introspective capability you have, the more flexibility you can carry data forward, and the more flexibility you can use that data. This is just the first introduction to a series of articles to come over the next few weeks looking at all the major covenant proposals that are in a mature state, have received recent interest, or are conceptually critically important enough that developers agree on their usefulness, but not yet a concrete design. This won't be 100% complete, but it will be relatively comprehensive. A few of them are are sorry. A few of them also are not strictly covenants per se, but compose very tightly with them. And this will include check template verify, check sig from stack, TX hash, alt vault, check contract verify, cat, and tweak verify.
And that's the end of the article. Thank you, Shenobi, for actually sitting down and telling me exactly what the hell you think a covenant is. And I think it's important that we get several different perspectives on this whole covenant deal because we we're we're not really talking about it right now because nobody knows what the hell is going on in the markets and we're all concerned with the price of Bitcoin and blah blah blah. But before that, we were really concerned with covenants. And like Shenobi said, there are people that are pro covenant and there are people that are anti covenant, and I've heard both the arguments. And I I'm not really sure, you know, where I'm at, but I think my gut is kinda telling me that I'm leaning towards pro covenant. And the reason is is because I like the idea of being able to say, I'm walking let's just give like, my for my kids.
I'm walking one Bitcoin. Not only do you get the Bitcoin upon my death and my lawyer who's got an active key that, you know, helps with the covenant or whatever, you you gotta do all that stuff, but you can't just spend it into cash. Nah. Uh-uh. You can't do that. I send that information forward as a covenant. Another way to look at covenants is like housing covenants in cities when they build houses. A lot of cities, almost all cities have some form of covenant or another. Like, one of the covenants that you'll find in the city is that when you buy a house, you don't own the sidewalk. In fact, in places like Lubbock, Texas, from the curb to the edge of the to the inner edge of the sidewalk, which is the one closest to your house, and then add three more feet.
You don't own the seven foot strip in front of your house in Lubbock, Texas. That's a covenant. Another covenant in Lubbock is that you cannot build a house with a basement. And that comes back from the slave days when they people were keeping slaves in their basements. So they were like, okay. We'll just make sure that nobody can build basements anymore and that will take care of it. That's a covenant. And that covenant is still in place in Lubbock, Texas to this very day. That's another way to think about covenants. So now when I lock this one Bitcoin for my kids that they can have when I die, the covenant is you can't spend it into cash.
You have to you have to do something else with it, and that's where the scripts come in. Be being able to describe in great detail how this Bitcoin can be used, and that is what activates the anti covenant guys. Because that's where where we start affecting fungibility. Well, I've got this Bitcoin that's not covenant locked, and I can spend it into cash. But then we have this, I've got my dad's Bitcoin, but I can't spend it into cash because it's just not going to allow that however it is that I work that script. Right? So those two Bitcoin functionally become different, which means what?
Those two Bitcoin are not like each other, which means what? Those two Bitcoin are not fungible. And this is one of the reasons why we've got the anti covenant crowd. I think it's a little overblown, but they've got a point. And if we don't listen to them very carefully, we could get ourselves into a situation where we activate something that we don't want activated. What does that remind you of? Can you say covenants and inscriptions? Except this time, it could be a lot worse. We should take our good sweet time when it comes to covenants and activation.
And I look forward to seeing whatever else it is that Shinobi writes. And I think that's gonna do it for the day. Ladies and gentlemen, episode ten fifty six of Bitcoin and is in the bag, and I'll see you on the other side. This has been Bitcoin and, and I'm your host, David Bennett. I hope you enjoyed today's episode and hope to see you again real soon. Have a great day.
Introduction and Episode Overview
South Korea's Digital Asset Market and Stablecoins
