The Crypto Capitalist Letter Next Level Thinking About The New Normal Page of 1 31

Conquest by Purchase

TCC 6 August 2021

Issue 6 August 2021

THE CRYPTO CAPITALIST LETTER

Publisher Thirteen Ventures Ltd oa Bombthrower Media

Editor Mark E Jeftovic ltmarkjrthecryptocapitalistiogt

Website httpsthecryptocapitalistio

Support supportthecryptocapitalistio

Postal 4243C Dundas St W Suite 405 Etobicoke ON M8X 1Y3 Canada

Disclaimers

Mark Jeftovic is not a registered advisor and this is a market research newsletter Talk to a registered professional if you want personalized advice Any decisions you make regarding your investments are your own

Mark Jeftovic his family andor Thirteen Ventures own some of the stocks discussed in this newsletter (and we will tell you which ones) but that could change

We have not accepted any compensation from any of the companies we cover here If we ever do we will make that clear when we cover them

Copyright

Permission to publish short excerpts provided attribution and link to main website if possible

The Crypto Capitalist Letter Next Level Thinking About The New Normal Page of 2 31

This editionrsquos title was cribbed from an old book I found in the bowels of London Ontariorsquos City Lights Bookshop during my student days in the early

90rsquos At that time City Lights was owned by Marc Emery the Canadian pot-activist who spent several years in a US prison for his troubles Emery used to rent out the basement 1

of the bookshop to local bands as a rehearsal space and I was in a punk band that practised there The acoustics were pretty good because all of the walls consisted of bookshelves filled with overflow from upstairs I used to spend hours foraging through them before and after practices and the ones I really liked like this curious find from 1911 authored pseudonymously by ldquoThe Veiled Politicianrdquo Emery used to just let me take them home For that I was appreciative since I barely had a two nickels to rub together in those days

The ldquoLetters from a Veiled Politicianrdquo that were circulated to men of influence throughout the British Empire were ruminating that Great Britain was in the process of losing its Empire and well on its way to becoming a third-rate European nation Specifically Canada (who would have to discard the notion of ever being a sovereign independent nation) would soon have to choose between being ldquoan important memberrdquo of the British Empire or be absorbed by the US

He wasnrsquot wrong that Great Britain was indeed headed for secular decline The First World War was a mere years away and that well and truly meant the sun was about to set on the British Empire The torch of history would be passed to a new power a relative upstart and former colony of the Brits The United States of America The Canadians would turn out to do better economically integrating with these Americans after all

The American ascendancy followed its own arc and given the general tendency toward acceleration of the pace of history itrsquos perhaps unsurprising that (the likes of Peter Zeihan aside) the American Empire has arguably hit its apogee

Two things happened this month which I think historians will look back on as sign-posts en route to a new multi-polar world

Most recently Marc Emery is a candidate in London Ontario1

TCC 6 August 2021

A Bombthrower Media Publication

The Crypto Capitalist Letter Next Level Thinking About The New Normal Page of 3 31

One was the 50th anniversary of the so-called ldquoNixon Shockrdquo which moved the entire world into a post-Bretton Woods era of fiat money It was a monetary experiment writ large in which every day more people can see is becoming increasingly untenable The other was the fall of Kabul which was so disorderly that nobody can even attempt a pretence of ldquoPeace with honourrdquo

Therersquos a reason for my reference to this obscure century-old tome itrsquos the title (Conquest By Purchase) refers to the concept of ldquoWar by Other Meansrdquo A map began circulating around the internet recently I first saw it labeled as ldquothe scariest map in existencerdquo

TCC 6 August 2021

The Crypto Capitalist Letter Next Level Thinking About The New Normal Page of 4 31

Itrsquos a map of the world in 2000 and 2020 colour coded to show each nation of the worldrsquos largest trading partner There are really only two horses in the race The USA and China

In 2000 the US was clearly the global hegemon in all facets Academics were seriously talking ldquoThe End of Historyrdquo The US was the sole super-power and now that the Chinese had embraced globalism they would fall into line and join the neoliberal world order

Or not

Expert consensus failing in nearly all prognostications turns out not to be new or peculiar to the pandemic This is the way of the world Whatever the think-tanks and the expert consensus pronounce to be the most likely future outcome is the one scenario that is probably precluded from occurring

This is also one (just one) of the reasons I generally dismiss experts or pundits who blithely dismiss crypto as something that will be banned by policymakers as some sort of preordained inevitability I think wersquore well past that point and one of the reasons why is because of the ascendancy of China and ironically because of Chinarsquos commencement of a campaign to bring all tech companies to the heel of the Communist Party and its banning of cryptos there

Like it or not for the West this is now one of the battle lines I used to worry that policy makers outside of China would look adoringly at their authoritarian technocracy and want to emulate the CCP Certainly the Party of Davos crew would Anthony Fauci doesnrsquot mince words that individual freedom is an impediment to expert management and central planning Bill Gates is on record wanting to cull the herd

However I am increasingly getting a sense that everybody else beyond fatigued from two years of lockdowns centrally planned economies and now having vaccine passports jammed down their throats theyrsquove had enough of this They donrsquot want to be like China They donrsquot think basic human rights are an impediment or a nuisance They want freedom they want self-sovereignty and even if they canrsquot say so publicly for now then they are simply taking actionhellip quietly

TCC 6 August 2021

The Crypto Capitalist Letter Next Level Thinking About The New Normal Page of 5 31

THIS MONTHrsquoS FUD Imminent Death of Bitcoin Predictedtrade again and again and again

This monthrsquos FUD cycle seemed a tad subdued Could it be that the full court press against Bitcoin across all possible fronts climate drug dealers China et al finally ran out of gas as the ole honey badger just characteristically ignored it all

TCC 6 August 2021

The Crypto Capitalist Letter Next Level Thinking About The New Normal Page of 6 31

There were two main themes of this month that in my mind actually ended up being net positives after starting out as FUD Those were the infrastructure bill and the Poly exchange hack

Beyond that there is what seems comparatively torpid attacks on El Salvador as that country gears up to make Bitcoin a legal tender there From the WSJ article the opening graphic is from

ldquoIn less than two weeks El Salvador will become the first country to adopt bitcoin as a national currency No one knows what comes next

The government of the impoverished Central American nation aims to spend up to $75 million as part of a plan to hand out $30 to people who sign up to an e-wallet called Chivo or ldquoCoolrdquo That software-based system would allow an estimated 25 million Salvadorans to buy goods or pay for services in US dollars or bitcoin El Salvadorrsquos two official currencies as of Sept 7

The foray into bitcoin risks wrecking El Salvadorrsquos $26 billion economy The indebted nationrsquos central bank could be forced to spend hard-currency reserves to buy bitcoin if the value of the crypto asset craters and consumers rush to the safety of the dollar The government canrsquot print its own moneymdashEl Salvador ditched the coloacuten in favor of the greenback two decades agomdashand is struggling to earn dollarsrdquo

Oh my

Clearly the establishment financial system and media outlets want in fact need the El Salvador project to fail

We should pay attention the reactions of US and supra-national institutions if it does not fail Expect widespread marginalization In the olden days of US primacy we would expect to see a US-led international community ginning up an excuse to institute ldquoregime changerdquo in El Salvador if the adoption of Bitcoin as a national currency actually improved the economy there Those days are probably over The timing of the ascent of crypto

TCC 6 August 2021

The Crypto Capitalist Letter Next Level Thinking About The New Normal Page of 7 31

sometimes appears to be so prescient and uncanny to seem almost other-worldly Ten years earlier and it wouldnrsquot have mattered Ten years later would be too late

The Infrastructure Bill started as FUD but I was heartened by some of the developments that came out of it After initially tucking in a provision that was overly broad and heralded by some as ldquoa backdoor ban on cryptordquo (it wasnrsquot) the crypto community pushed back hard enough and there turned out to be a few elected officials and even the odd bureaucrat who were hip to crypto

Although the bill passed and the tax reporting clause on crypto was included without any of the amendments the crypto community was looking for (it was blocked by a single congressman who is in his final term and was holding out for a $50B military pork allocation to his state and he didnrsquot get it)

But all that said everybody with proximity to it understands that the provision as written is overly broad and unworkable but the larger picture is this This bill took the ideas that ldquoThe US government will eventually ban cryptordquo off of the table

Itrsquos over The US will never ban crypto itrsquos officially part of the system now Herersquos Ted Cruz with a refreshingly clueful observation about it

The current bill widens the definition of broker

Those who would have to collect information on crypto-currency consumers and report this information to the IRS It would force every single participant in the crypto-currency structure to operate as a financial institution which would mean they would have to provide consumer information to the IRS even if they donrsquot have access to that information

This overly broad definition of the word lsquobrokerrsquo will block rapid innovation in crypto-currencies and it will endanger the privacy of many Americans in crypto currencies This is wrong So I applaud my colleagues for trying to find an incremental

TCC 6 August 2021

The Crypto Capitalist Letter Next Level Thinking About The New Normal Page of 8 31

approach unfortunately because the senator from Vermont objected that incremental approach hasnrsquot been adopted

So letrsquos exercise a brief shining moment of common sense and letrsquos recognize if we gathered all 100 senators in this chamber and asked them to stand up in articulate two sentences defining what in the hell a crypto-currency is that you would not get greater than 5 who could answer that question

Given that reality the barest exercise of prudence would say we should not regulate something we donrsquot yet understand we should actually take the time to try and understand it We should hold some hearings we should consider the consequences we shouldnrsquot destroy peoplersquos lives and livelihoods from complete ignorance

FED AGENCIES BATTLE IT OUT What has been interesting if not amusing about all this is not only do these latest developments mean that Bitcoin and cryptos are now tacitly ensconced within the global financial system (ex-China) Now a turf-war has erupted between US federal agencies over who gets to regulate what

In the height of the infrastructure bill battle SEC chief Gary Gensler gave a speech with a strongly worded caution putting the crypto space on notice the SEC was going to regulate them heavily saying ldquoThe SEC will police crypto markets to the maximum extent possiblerdquo

At the time I tweeted that this was an admission that the US government couldnrsquot ban Bitcoin even if it wanted to and as we have just been examining the outcome of the infrastructure reinforces that assertion

Then the CFTC stepped into the fray with commissioner Brian Quintenz tweeting that itrsquos not even the within the SECrsquos to regulate crypto itrsquos theirs

TCC 6 August 2021

The Crypto Capitalist Letter Next Level Thinking About The New Normal Page of 3 31

One was the 50th anniversary of the so-called ldquoNixon Shockrdquo which moved the entire world into a post-Bretton Woods era of fiat money It was a monetary experiment writ large in which every day more people can see is becoming increasingly untenable The other was the fall of Kabul which was so disorderly that nobody can even attempt a pretence of ldquoPeace with honourrdquo

Therersquos a reason for my reference to this obscure century-old tome itrsquos the title (Conquest By Purchase) refers to the concept of ldquoWar by Other Meansrdquo A map began circulating around the internet recently I first saw it labeled as ldquothe scariest map in existencerdquo

TCC 6 August 2021

The Crypto Capitalist Letter Next Level Thinking About The New Normal Page of 4 31

Itrsquos a map of the world in 2000 and 2020 colour coded to show each nation of the worldrsquos largest trading partner There are really only two horses in the race The USA and China

In 2000 the US was clearly the global hegemon in all facets Academics were seriously talking ldquoThe End of Historyrdquo The US was the sole super-power and now that the Chinese had embraced globalism they would fall into line and join the neoliberal world order

Or not

Expert consensus failing in nearly all prognostications turns out not to be new or peculiar to the pandemic This is the way of the world Whatever the think-tanks and the expert consensus pronounce to be the most likely future outcome is the one scenario that is probably precluded from occurring

This is also one (just one) of the reasons I generally dismiss experts or pundits who blithely dismiss crypto as something that will be banned by policymakers as some sort of preordained inevitability I think wersquore well past that point and one of the reasons why is because of the ascendancy of China and ironically because of Chinarsquos commencement of a campaign to bring all tech companies to the heel of the Communist Party and its banning of cryptos there

Like it or not for the West this is now one of the battle lines I used to worry that policy makers outside of China would look adoringly at their authoritarian technocracy and want to emulate the CCP Certainly the Party of Davos crew would Anthony Fauci doesnrsquot mince words that individual freedom is an impediment to expert management and central planning Bill Gates is on record wanting to cull the herd

However I am increasingly getting a sense that everybody else beyond fatigued from two years of lockdowns centrally planned economies and now having vaccine passports jammed down their throats theyrsquove had enough of this They donrsquot want to be like China They donrsquot think basic human rights are an impediment or a nuisance They want freedom they want self-sovereignty and even if they canrsquot say so publicly for now then they are simply taking actionhellip quietly

TCC 6 August 2021

The Crypto Capitalist Letter Next Level Thinking About The New Normal Page of 5 31

THIS MONTHrsquoS FUD Imminent Death of Bitcoin Predictedtrade again and again and again

This monthrsquos FUD cycle seemed a tad subdued Could it be that the full court press against Bitcoin across all possible fronts climate drug dealers China et al finally ran out of gas as the ole honey badger just characteristically ignored it all

TCC 6 August 2021

The Crypto Capitalist Letter Next Level Thinking About The New Normal Page of 6 31

There were two main themes of this month that in my mind actually ended up being net positives after starting out as FUD Those were the infrastructure bill and the Poly exchange hack

Beyond that there is what seems comparatively torpid attacks on El Salvador as that country gears up to make Bitcoin a legal tender there From the WSJ article the opening graphic is from

ldquoIn less than two weeks El Salvador will become the first country to adopt bitcoin as a national currency No one knows what comes next

The government of the impoverished Central American nation aims to spend up to $75 million as part of a plan to hand out $30 to people who sign up to an e-wallet called Chivo or ldquoCoolrdquo That software-based system would allow an estimated 25 million Salvadorans to buy goods or pay for services in US dollars or bitcoin El Salvadorrsquos two official currencies as of Sept 7

The foray into bitcoin risks wrecking El Salvadorrsquos $26 billion economy The indebted nationrsquos central bank could be forced to spend hard-currency reserves to buy bitcoin if the value of the crypto asset craters and consumers rush to the safety of the dollar The government canrsquot print its own moneymdashEl Salvador ditched the coloacuten in favor of the greenback two decades agomdashand is struggling to earn dollarsrdquo

Oh my

Clearly the establishment financial system and media outlets want in fact need the El Salvador project to fail

We should pay attention the reactions of US and supra-national institutions if it does not fail Expect widespread marginalization In the olden days of US primacy we would expect to see a US-led international community ginning up an excuse to institute ldquoregime changerdquo in El Salvador if the adoption of Bitcoin as a national currency actually improved the economy there Those days are probably over The timing of the ascent of crypto

TCC 6 August 2021

The Crypto Capitalist Letter Next Level Thinking About The New Normal Page of 7 31

sometimes appears to be so prescient and uncanny to seem almost other-worldly Ten years earlier and it wouldnrsquot have mattered Ten years later would be too late

The Infrastructure Bill started as FUD but I was heartened by some of the developments that came out of it After initially tucking in a provision that was overly broad and heralded by some as ldquoa backdoor ban on cryptordquo (it wasnrsquot) the crypto community pushed back hard enough and there turned out to be a few elected officials and even the odd bureaucrat who were hip to crypto

Although the bill passed and the tax reporting clause on crypto was included without any of the amendments the crypto community was looking for (it was blocked by a single congressman who is in his final term and was holding out for a $50B military pork allocation to his state and he didnrsquot get it)

But all that said everybody with proximity to it understands that the provision as written is overly broad and unworkable but the larger picture is this This bill took the ideas that ldquoThe US government will eventually ban cryptordquo off of the table

Itrsquos over The US will never ban crypto itrsquos officially part of the system now Herersquos Ted Cruz with a refreshingly clueful observation about it

The current bill widens the definition of broker

Those who would have to collect information on crypto-currency consumers and report this information to the IRS It would force every single participant in the crypto-currency structure to operate as a financial institution which would mean they would have to provide consumer information to the IRS even if they donrsquot have access to that information

This overly broad definition of the word lsquobrokerrsquo will block rapid innovation in crypto-currencies and it will endanger the privacy of many Americans in crypto currencies This is wrong So I applaud my colleagues for trying to find an incremental

TCC 6 August 2021

The Crypto Capitalist Letter Next Level Thinking About The New Normal Page of 8 31

approach unfortunately because the senator from Vermont objected that incremental approach hasnrsquot been adopted

So letrsquos exercise a brief shining moment of common sense and letrsquos recognize if we gathered all 100 senators in this chamber and asked them to stand up in articulate two sentences defining what in the hell a crypto-currency is that you would not get greater than 5 who could answer that question

Given that reality the barest exercise of prudence would say we should not regulate something we donrsquot yet understand we should actually take the time to try and understand it We should hold some hearings we should consider the consequences we shouldnrsquot destroy peoplersquos lives and livelihoods from complete ignorance

FED AGENCIES BATTLE IT OUT What has been interesting if not amusing about all this is not only do these latest developments mean that Bitcoin and cryptos are now tacitly ensconced within the global financial system (ex-China) Now a turf-war has erupted between US federal agencies over who gets to regulate what

In the height of the infrastructure bill battle SEC chief Gary Gensler gave a speech with a strongly worded caution putting the crypto space on notice the SEC was going to regulate them heavily saying ldquoThe SEC will police crypto markets to the maximum extent possiblerdquo

At the time I tweeted that this was an admission that the US government couldnrsquot ban Bitcoin even if it wanted to and as we have just been examining the outcome of the infrastructure reinforces that assertion

Then the CFTC stepped into the fray with commissioner Brian Quintenz tweeting that itrsquos not even the within the SECrsquos to regulate crypto itrsquos theirs

TCC 6 August 2021

The Crypto Capitalist Letter Next Level Thinking About The New Normal Page of 4 31

Itrsquos a map of the world in 2000 and 2020 colour coded to show each nation of the worldrsquos largest trading partner There are really only two horses in the race The USA and China

In 2000 the US was clearly the global hegemon in all facets Academics were seriously talking ldquoThe End of Historyrdquo The US was the sole super-power and now that the Chinese had embraced globalism they would fall into line and join the neoliberal world order

Or not

Expert consensus failing in nearly all prognostications turns out not to be new or peculiar to the pandemic This is the way of the world Whatever the think-tanks and the expert consensus pronounce to be the most likely future outcome is the one scenario that is probably precluded from occurring

This is also one (just one) of the reasons I generally dismiss experts or pundits who blithely dismiss crypto as something that will be banned by policymakers as some sort of preordained inevitability I think wersquore well past that point and one of the reasons why is because of the ascendancy of China and ironically because of Chinarsquos commencement of a campaign to bring all tech companies to the heel of the Communist Party and its banning of cryptos there

Like it or not for the West this is now one of the battle lines I used to worry that policy makers outside of China would look adoringly at their authoritarian technocracy and want to emulate the CCP Certainly the Party of Davos crew would Anthony Fauci doesnrsquot mince words that individual freedom is an impediment to expert management and central planning Bill Gates is on record wanting to cull the herd

However I am increasingly getting a sense that everybody else beyond fatigued from two years of lockdowns centrally planned economies and now having vaccine passports jammed down their throats theyrsquove had enough of this They donrsquot want to be like China They donrsquot think basic human rights are an impediment or a nuisance They want freedom they want self-sovereignty and even if they canrsquot say so publicly for now then they are simply taking actionhellip quietly

TCC 6 August 2021

The Crypto Capitalist Letter Next Level Thinking About The New Normal Page of 5 31

THIS MONTHrsquoS FUD Imminent Death of Bitcoin Predictedtrade again and again and again

This monthrsquos FUD cycle seemed a tad subdued Could it be that the full court press against Bitcoin across all possible fronts climate drug dealers China et al finally ran out of gas as the ole honey badger just characteristically ignored it all

TCC 6 August 2021

The Crypto Capitalist Letter Next Level Thinking About The New Normal Page of 6 31

There were two main themes of this month that in my mind actually ended up being net positives after starting out as FUD Those were the infrastructure bill and the Poly exchange hack

Beyond that there is what seems comparatively torpid attacks on El Salvador as that country gears up to make Bitcoin a legal tender there From the WSJ article the opening graphic is from

ldquoIn less than two weeks El Salvador will become the first country to adopt bitcoin as a national currency No one knows what comes next

The government of the impoverished Central American nation aims to spend up to $75 million as part of a plan to hand out $30 to people who sign up to an e-wallet called Chivo or ldquoCoolrdquo That software-based system would allow an estimated 25 million Salvadorans to buy goods or pay for services in US dollars or bitcoin El Salvadorrsquos two official currencies as of Sept 7

The foray into bitcoin risks wrecking El Salvadorrsquos $26 billion economy The indebted nationrsquos central bank could be forced to spend hard-currency reserves to buy bitcoin if the value of the crypto asset craters and consumers rush to the safety of the dollar The government canrsquot print its own moneymdashEl Salvador ditched the coloacuten in favor of the greenback two decades agomdashand is struggling to earn dollarsrdquo

Oh my

Clearly the establishment financial system and media outlets want in fact need the El Salvador project to fail

We should pay attention the reactions of US and supra-national institutions if it does not fail Expect widespread marginalization In the olden days of US primacy we would expect to see a US-led international community ginning up an excuse to institute ldquoregime changerdquo in El Salvador if the adoption of Bitcoin as a national currency actually improved the economy there Those days are probably over The timing of the ascent of crypto

TCC 6 August 2021

The Crypto Capitalist Letter Next Level Thinking About The New Normal Page of 7 31

sometimes appears to be so prescient and uncanny to seem almost other-worldly Ten years earlier and it wouldnrsquot have mattered Ten years later would be too late

The Infrastructure Bill started as FUD but I was heartened by some of the developments that came out of it After initially tucking in a provision that was overly broad and heralded by some as ldquoa backdoor ban on cryptordquo (it wasnrsquot) the crypto community pushed back hard enough and there turned out to be a few elected officials and even the odd bureaucrat who were hip to crypto

Although the bill passed and the tax reporting clause on crypto was included without any of the amendments the crypto community was looking for (it was blocked by a single congressman who is in his final term and was holding out for a $50B military pork allocation to his state and he didnrsquot get it)

But all that said everybody with proximity to it understands that the provision as written is overly broad and unworkable but the larger picture is this This bill took the ideas that ldquoThe US government will eventually ban cryptordquo off of the table

Itrsquos over The US will never ban crypto itrsquos officially part of the system now Herersquos Ted Cruz with a refreshingly clueful observation about it

The current bill widens the definition of broker

Those who would have to collect information on crypto-currency consumers and report this information to the IRS It would force every single participant in the crypto-currency structure to operate as a financial institution which would mean they would have to provide consumer information to the IRS even if they donrsquot have access to that information

This overly broad definition of the word lsquobrokerrsquo will block rapid innovation in crypto-currencies and it will endanger the privacy of many Americans in crypto currencies This is wrong So I applaud my colleagues for trying to find an incremental

TCC 6 August 2021

The Crypto Capitalist Letter Next Level Thinking About The New Normal Page of 8 31

approach unfortunately because the senator from Vermont objected that incremental approach hasnrsquot been adopted

So letrsquos exercise a brief shining moment of common sense and letrsquos recognize if we gathered all 100 senators in this chamber and asked them to stand up in articulate two sentences defining what in the hell a crypto-currency is that you would not get greater than 5 who could answer that question

Given that reality the barest exercise of prudence would say we should not regulate something we donrsquot yet understand we should actually take the time to try and understand it We should hold some hearings we should consider the consequences we shouldnrsquot destroy peoplersquos lives and livelihoods from complete ignorance

FED AGENCIES BATTLE IT OUT What has been interesting if not amusing about all this is not only do these latest developments mean that Bitcoin and cryptos are now tacitly ensconced within the global financial system (ex-China) Now a turf-war has erupted between US federal agencies over who gets to regulate what

In the height of the infrastructure bill battle SEC chief Gary Gensler gave a speech with a strongly worded caution putting the crypto space on notice the SEC was going to regulate them heavily saying ldquoThe SEC will police crypto markets to the maximum extent possiblerdquo

At the time I tweeted that this was an admission that the US government couldnrsquot ban Bitcoin even if it wanted to and as we have just been examining the outcome of the infrastructure reinforces that assertion

Then the CFTC stepped into the fray with commissioner Brian Quintenz tweeting that itrsquos not even the within the SECrsquos to regulate crypto itrsquos theirs

TCC 6 August 2021

The Crypto Capitalist Letter Next Level Thinking About The New Normal Page of 5 31

THIS MONTHrsquoS FUD Imminent Death of Bitcoin Predictedtrade again and again and again

This monthrsquos FUD cycle seemed a tad subdued Could it be that the full court press against Bitcoin across all possible fronts climate drug dealers China et al finally ran out of gas as the ole honey badger just characteristically ignored it all

TCC 6 August 2021

The Crypto Capitalist Letter Next Level Thinking About The New Normal Page of 6 31

There were two main themes of this month that in my mind actually ended up being net positives after starting out as FUD Those were the infrastructure bill and the Poly exchange hack

Beyond that there is what seems comparatively torpid attacks on El Salvador as that country gears up to make Bitcoin a legal tender there From the WSJ article the opening graphic is from

ldquoIn less than two weeks El Salvador will become the first country to adopt bitcoin as a national currency No one knows what comes next

The government of the impoverished Central American nation aims to spend up to $75 million as part of a plan to hand out $30 to people who sign up to an e-wallet called Chivo or ldquoCoolrdquo That software-based system would allow an estimated 25 million Salvadorans to buy goods or pay for services in US dollars or bitcoin El Salvadorrsquos two official currencies as of Sept 7

The foray into bitcoin risks wrecking El Salvadorrsquos $26 billion economy The indebted nationrsquos central bank could be forced to spend hard-currency reserves to buy bitcoin if the value of the crypto asset craters and consumers rush to the safety of the dollar The government canrsquot print its own moneymdashEl Salvador ditched the coloacuten in favor of the greenback two decades agomdashand is struggling to earn dollarsrdquo

Oh my

Clearly the establishment financial system and media outlets want in fact need the El Salvador project to fail

We should pay attention the reactions of US and supra-national institutions if it does not fail Expect widespread marginalization In the olden days of US primacy we would expect to see a US-led international community ginning up an excuse to institute ldquoregime changerdquo in El Salvador if the adoption of Bitcoin as a national currency actually improved the economy there Those days are probably over The timing of the ascent of crypto

TCC 6 August 2021

The Crypto Capitalist Letter Next Level Thinking About The New Normal Page of 7 31

sometimes appears to be so prescient and uncanny to seem almost other-worldly Ten years earlier and it wouldnrsquot have mattered Ten years later would be too late

The Infrastructure Bill started as FUD but I was heartened by some of the developments that came out of it After initially tucking in a provision that was overly broad and heralded by some as ldquoa backdoor ban on cryptordquo (it wasnrsquot) the crypto community pushed back hard enough and there turned out to be a few elected officials and even the odd bureaucrat who were hip to crypto

Although the bill passed and the tax reporting clause on crypto was included without any of the amendments the crypto community was looking for (it was blocked by a single congressman who is in his final term and was holding out for a $50B military pork allocation to his state and he didnrsquot get it)

But all that said everybody with proximity to it understands that the provision as written is overly broad and unworkable but the larger picture is this This bill took the ideas that ldquoThe US government will eventually ban cryptordquo off of the table

Itrsquos over The US will never ban crypto itrsquos officially part of the system now Herersquos Ted Cruz with a refreshingly clueful observation about it

The current bill widens the definition of broker

Those who would have to collect information on crypto-currency consumers and report this information to the IRS It would force every single participant in the crypto-currency structure to operate as a financial institution which would mean they would have to provide consumer information to the IRS even if they donrsquot have access to that information

This overly broad definition of the word lsquobrokerrsquo will block rapid innovation in crypto-currencies and it will endanger the privacy of many Americans in crypto currencies This is wrong So I applaud my colleagues for trying to find an incremental

TCC 6 August 2021

The Crypto Capitalist Letter Next Level Thinking About The New Normal Page of 8 31

approach unfortunately because the senator from Vermont objected that incremental approach hasnrsquot been adopted

So letrsquos exercise a brief shining moment of common sense and letrsquos recognize if we gathered all 100 senators in this chamber and asked them to stand up in articulate two sentences defining what in the hell a crypto-currency is that you would not get greater than 5 who could answer that question

Given that reality the barest exercise of prudence would say we should not regulate something we donrsquot yet understand we should actually take the time to try and understand it We should hold some hearings we should consider the consequences we shouldnrsquot destroy peoplersquos lives and livelihoods from complete ignorance

FED AGENCIES BATTLE IT OUT What has been interesting if not amusing about all this is not only do these latest developments mean that Bitcoin and cryptos are now tacitly ensconced within the global financial system (ex-China) Now a turf-war has erupted between US federal agencies over who gets to regulate what

In the height of the infrastructure bill battle SEC chief Gary Gensler gave a speech with a strongly worded caution putting the crypto space on notice the SEC was going to regulate them heavily saying ldquoThe SEC will police crypto markets to the maximum extent possiblerdquo

At the time I tweeted that this was an admission that the US government couldnrsquot ban Bitcoin even if it wanted to and as we have just been examining the outcome of the infrastructure reinforces that assertion

Then the CFTC stepped into the fray with commissioner Brian Quintenz tweeting that itrsquos not even the within the SECrsquos to regulate crypto itrsquos theirs

TCC 6 August 2021

The Crypto Capitalist Letter Next Level Thinking About The New Normal Page of 6 31

There were two main themes of this month that in my mind actually ended up being net positives after starting out as FUD Those were the infrastructure bill and the Poly exchange hack

Beyond that there is what seems comparatively torpid attacks on El Salvador as that country gears up to make Bitcoin a legal tender there From the WSJ article the opening graphic is from

ldquoIn less than two weeks El Salvador will become the first country to adopt bitcoin as a national currency No one knows what comes next

The government of the impoverished Central American nation aims to spend up to $75 million as part of a plan to hand out $30 to people who sign up to an e-wallet called Chivo or ldquoCoolrdquo That software-based system would allow an estimated 25 million Salvadorans to buy goods or pay for services in US dollars or bitcoin El Salvadorrsquos two official currencies as of Sept 7

The foray into bitcoin risks wrecking El Salvadorrsquos $26 billion economy The indebted nationrsquos central bank could be forced to spend hard-currency reserves to buy bitcoin if the value of the crypto asset craters and consumers rush to the safety of the dollar The government canrsquot print its own moneymdashEl Salvador ditched the coloacuten in favor of the greenback two decades agomdashand is struggling to earn dollarsrdquo

Oh my

Clearly the establishment financial system and media outlets want in fact need the El Salvador project to fail

We should pay attention the reactions of US and supra-national institutions if it does not fail Expect widespread marginalization In the olden days of US primacy we would expect to see a US-led international community ginning up an excuse to institute ldquoregime changerdquo in El Salvador if the adoption of Bitcoin as a national currency actually improved the economy there Those days are probably over The timing of the ascent of crypto

TCC 6 August 2021

The Crypto Capitalist Letter Next Level Thinking About The New Normal Page of 7 31

sometimes appears to be so prescient and uncanny to seem almost other-worldly Ten years earlier and it wouldnrsquot have mattered Ten years later would be too late

The Infrastructure Bill started as FUD but I was heartened by some of the developments that came out of it After initially tucking in a provision that was overly broad and heralded by some as ldquoa backdoor ban on cryptordquo (it wasnrsquot) the crypto community pushed back hard enough and there turned out to be a few elected officials and even the odd bureaucrat who were hip to crypto

Although the bill passed and the tax reporting clause on crypto was included without any of the amendments the crypto community was looking for (it was blocked by a single congressman who is in his final term and was holding out for a $50B military pork allocation to his state and he didnrsquot get it)

But all that said everybody with proximity to it understands that the provision as written is overly broad and unworkable but the larger picture is this This bill took the ideas that ldquoThe US government will eventually ban cryptordquo off of the table

Itrsquos over The US will never ban crypto itrsquos officially part of the system now Herersquos Ted Cruz with a refreshingly clueful observation about it

The current bill widens the definition of broker

Those who would have to collect information on crypto-currency consumers and report this information to the IRS It would force every single participant in the crypto-currency structure to operate as a financial institution which would mean they would have to provide consumer information to the IRS even if they donrsquot have access to that information

This overly broad definition of the word lsquobrokerrsquo will block rapid innovation in crypto-currencies and it will endanger the privacy of many Americans in crypto currencies This is wrong So I applaud my colleagues for trying to find an incremental

TCC 6 August 2021

The Crypto Capitalist Letter Next Level Thinking About The New Normal Page of 8 31

approach unfortunately because the senator from Vermont objected that incremental approach hasnrsquot been adopted

So letrsquos exercise a brief shining moment of common sense and letrsquos recognize if we gathered all 100 senators in this chamber and asked them to stand up in articulate two sentences defining what in the hell a crypto-currency is that you would not get greater than 5 who could answer that question

Given that reality the barest exercise of prudence would say we should not regulate something we donrsquot yet understand we should actually take the time to try and understand it We should hold some hearings we should consider the consequences we shouldnrsquot destroy peoplersquos lives and livelihoods from complete ignorance

FED AGENCIES BATTLE IT OUT What has been interesting if not amusing about all this is not only do these latest developments mean that Bitcoin and cryptos are now tacitly ensconced within the global financial system (ex-China) Now a turf-war has erupted between US federal agencies over who gets to regulate what

In the height of the infrastructure bill battle SEC chief Gary Gensler gave a speech with a strongly worded caution putting the crypto space on notice the SEC was going to regulate them heavily saying ldquoThe SEC will police crypto markets to the maximum extent possiblerdquo

At the time I tweeted that this was an admission that the US government couldnrsquot ban Bitcoin even if it wanted to and as we have just been examining the outcome of the infrastructure reinforces that assertion

Then the CFTC stepped into the fray with commissioner Brian Quintenz tweeting that itrsquos not even the within the SECrsquos to regulate crypto itrsquos theirs

TCC 6 August 2021

The Crypto Capitalist Letter Next Level Thinking About The New Normal Page of 7 31

sometimes appears to be so prescient and uncanny to seem almost other-worldly Ten years earlier and it wouldnrsquot have mattered Ten years later would be too late

The Infrastructure Bill started as FUD but I was heartened by some of the developments that came out of it After initially tucking in a provision that was overly broad and heralded by some as ldquoa backdoor ban on cryptordquo (it wasnrsquot) the crypto community pushed back hard enough and there turned out to be a few elected officials and even the odd bureaucrat who were hip to crypto

Although the bill passed and the tax reporting clause on crypto was included without any of the amendments the crypto community was looking for (it was blocked by a single congressman who is in his final term and was holding out for a $50B military pork allocation to his state and he didnrsquot get it)

But all that said everybody with proximity to it understands that the provision as written is overly broad and unworkable but the larger picture is this This bill took the ideas that ldquoThe US government will eventually ban cryptordquo off of the table

Itrsquos over The US will never ban crypto itrsquos officially part of the system now Herersquos Ted Cruz with a refreshingly clueful observation about it

The current bill widens the definition of broker

Those who would have to collect information on crypto-currency consumers and report this information to the IRS It would force every single participant in the crypto-currency structure to operate as a financial institution which would mean they would have to provide consumer information to the IRS even if they donrsquot have access to that information

This overly broad definition of the word lsquobrokerrsquo will block rapid innovation in crypto-currencies and it will endanger the privacy of many Americans in crypto currencies This is wrong So I applaud my colleagues for trying to find an incremental

TCC 6 August 2021

The Crypto Capitalist Letter Next Level Thinking About The New Normal Page of 8 31

approach unfortunately because the senator from Vermont objected that incremental approach hasnrsquot been adopted

So letrsquos exercise a brief shining moment of common sense and letrsquos recognize if we gathered all 100 senators in this chamber and asked them to stand up in articulate two sentences defining what in the hell a crypto-currency is that you would not get greater than 5 who could answer that question

Given that reality the barest exercise of prudence would say we should not regulate something we donrsquot yet understand we should actually take the time to try and understand it We should hold some hearings we should consider the consequences we shouldnrsquot destroy peoplersquos lives and livelihoods from complete ignorance

FED AGENCIES BATTLE IT OUT What has been interesting if not amusing about all this is not only do these latest developments mean that Bitcoin and cryptos are now tacitly ensconced within the global financial system (ex-China) Now a turf-war has erupted between US federal agencies over who gets to regulate what

In the height of the infrastructure bill battle SEC chief Gary Gensler gave a speech with a strongly worded caution putting the crypto space on notice the SEC was going to regulate them heavily saying ldquoThe SEC will police crypto markets to the maximum extent possiblerdquo

At the time I tweeted that this was an admission that the US government couldnrsquot ban Bitcoin even if it wanted to and as we have just been examining the outcome of the infrastructure reinforces that assertion

Then the CFTC stepped into the fray with commissioner Brian Quintenz tweeting that itrsquos not even the within the SECrsquos to regulate crypto itrsquos theirs

TCC 6 August 2021

The Crypto Capitalist Letter Next Level Thinking About The New Normal Page of 8 31

approach unfortunately because the senator from Vermont objected that incremental approach hasnrsquot been adopted

So letrsquos exercise a brief shining moment of common sense and letrsquos recognize if we gathered all 100 senators in this chamber and asked them to stand up in articulate two sentences defining what in the hell a crypto-currency is that you would not get greater than 5 who could answer that question

Given that reality the barest exercise of prudence would say we should not regulate something we donrsquot yet understand we should actually take the time to try and understand it We should hold some hearings we should consider the consequences we shouldnrsquot destroy peoplersquos lives and livelihoods from complete ignorance

FED AGENCIES BATTLE IT OUT What has been interesting if not amusing about all this is not only do these latest developments mean that Bitcoin and cryptos are now tacitly ensconced within the global financial system (ex-China) Now a turf-war has erupted between US federal agencies over who gets to regulate what

In the height of the infrastructure bill battle SEC chief Gary Gensler gave a speech with a strongly worded caution putting the crypto space on notice the SEC was going to regulate them heavily saying ldquoThe SEC will police crypto markets to the maximum extent possiblerdquo

At the time I tweeted that this was an admission that the US government couldnrsquot ban Bitcoin even if it wanted to and as we have just been examining the outcome of the infrastructure reinforces that assertion

Then the CFTC stepped into the fray with commissioner Brian Quintenz tweeting that itrsquos not even the within the SECrsquos to regulate crypto itrsquos theirs

TCC 6 August 2021

The Crypto Capitalist Letter Next Level Thinking About The New Normal Page of 9 31

It almost seems like the only politician or policy-maker these days who is talking like crypto-currencies should somehow go-away entirely is Elizabeth Warren who increasingly displays her ignorance every time she opens her mouth on the topic

CROSSCHAIN NETWORK POLY HACKED FUNDS RETURNED The Poly exchange which is a cross-chain defi app that facilitates interoperability between Ethereum Binance Chain and Polygon was hacked for over $600 million dollars worth of tokens across multiple chains

The news spread like wildfire often being conflated with the Polygon blockchain (which is itrsquos own thing with its own token Matic)

Itrsquos not uncommon when these things happen for laymen to hear the news and think that therersquos been an underlying hack to the protocol itself ldquoHey Mark is it true Bitcoinrsquos been hackedrdquo is a question Irsquove been asked whence walking the dog in my neighbourhood No None of these underlying protocols have ever been hacked When these things happen itrsquos always an application or an exchange sitting atop the protocol that is breached

In this case it turned out to be a white hat hacker (a security researcher) who discovered a security hole in Polyrsquos platform He has since returned all of the funds and received a

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The Crypto Capitalist Letter Next Level Thinking About The New Normal Page of 10 31

$500K bug bounty for his troubles Another case of FUD with a happy ending for the month

BILLIONAIRE JOHN PAULSON CALLS CRYPTOS WORTHLESS About the only straight up FUD I came across this month happened just as I was finishing this edition when John Paulson famous for shorting the housing bubble in 2008 said in an interview with Carlyle Group founder David Rubenstein that cryptos were ultimately worthless but too volatile to short

yawn

Carlyle Group of course is a private equity firm that is well ensconced within the US military-industrial complex and whose incentives are such that the current monetary system continues indefinitely

Paulson as great a call as he made ahead of the housing bubble implosion seems to be a one-trick pony Having gone long gold around the top in 2011 and being hit with a wave in redemptions after gold peaked his AUM has been in secular decline ever since

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The Crypto Capitalist Letter Next Level Thinking About The New Normal Page of 11 31

EYE ON EVILCOIN EvilCoin is our shorthand for Central Bank Digital Currencies and Digital Scrip

An explainer video ldquoWhy the Fed is Considering a Digital Dollarrdquo via Wall Street Journal touches on the major rationales and motivations behind why the central bank would implement a so-called ldquoFedCoinrdquo

There are no real surprises in it for our readers other than that some of the mainstream thinking and assumptions around all this seems more out of touch than I already thought it was

For example one benefit of rolling out a FedCoin was described as the central bankrsquos ability to then cut out the financial networks like VISA and Mastercard and even the banking sector itself Thats something I really donrsquot see happening If the Global Financial Crisis and everything that happened since (like QEternity and endless NIRP) has taught us anything itrsquos that the banking and financial sector is the tail that wags the dog not the other way around

A FedCoin would be implemented by the existing US financial sector not replace it

The other big motivator was heralded as the ability to influence monetary policy directly on the device mdash Yes this is what wersquove been saying will be the defining characteristic of CBDCs and what will make them abjectly inferior forms of money than cryptos

TCC 6 August 2021

The Crypto Capitalist Letter Next Level Thinking About The New Normal Page of 10 31

$500K bug bounty for his troubles Another case of FUD with a happy ending for the month

BILLIONAIRE JOHN PAULSON CALLS CRYPTOS WORTHLESS About the only straight up FUD I came across this month happened just as I was finishing this edition when John Paulson famous for shorting the housing bubble in 2008 said in an interview with Carlyle Group founder David Rubenstein that cryptos were ultimately worthless but too volatile to short

yawn

Carlyle Group of course is a private equity firm that is well ensconced within the US military-industrial complex and whose incentives are such that the current monetary system continues indefinitely

Paulson as great a call as he made ahead of the housing bubble implosion seems to be a one-trick pony Having gone long gold around the top in 2011 and being hit with a wave in redemptions after gold peaked his AUM has been in secular decline ever since

TCC 6 August 2021

The Crypto Capitalist Letter Next Level Thinking About The New Normal Page of 11 31

EYE ON EVILCOIN EvilCoin is our shorthand for Central Bank Digital Currencies and Digital Scrip

An explainer video ldquoWhy the Fed is Considering a Digital Dollarrdquo via Wall Street Journal touches on the major rationales and motivations behind why the central bank would implement a so-called ldquoFedCoinrdquo

There are no real surprises in it for our readers other than that some of the mainstream thinking and assumptions around all this seems more out of touch than I already thought it was

For example one benefit of rolling out a FedCoin was described as the central bankrsquos ability to then cut out the financial networks like VISA and Mastercard and even the banking sector itself Thats something I really donrsquot see happening If the Global Financial Crisis and everything that happened since (like QEternity and endless NIRP) has taught us anything itrsquos that the banking and financial sector is the tail that wags the dog not the other way around

A FedCoin would be implemented by the existing US financial sector not replace it

The other big motivator was heralded as the ability to influence monetary policy directly on the device mdash Yes this is what wersquove been saying will be the defining characteristic of CBDCs and what will make them abjectly inferior forms of money than cryptos

TCC 6 August 2021

The Crypto Capitalist Letter Next Level Thinking About The New Normal Page of 11 31

EYE ON EVILCOIN EvilCoin is our shorthand for Central Bank Digital Currencies and Digital Scrip

An explainer video ldquoWhy the Fed is Considering a Digital Dollarrdquo via Wall Street Journal touches on the major rationales and motivations behind why the central bank would implement a so-called ldquoFedCoinrdquo

There are no real surprises in it for our readers other than that some of the mainstream thinking and assumptions around all this seems more out of touch than I already thought it was

For example one benefit of rolling out a FedCoin was described as the central bankrsquos ability to then cut out the financial networks like VISA and Mastercard and even the banking sector itself Thats something I really donrsquot see happening If the Global Financial Crisis and everything that happened since (like QEternity and endless NIRP) has taught us anything itrsquos that the banking and financial sector is the tail that wags the dog not the other way around

A FedCoin would be implemented by the existing US financial sector not replace it

The other big motivator was heralded as the ability to influence monetary policy directly on the device mdash Yes this is what wersquove been saying will be the defining characteristic of CBDCs and what will make them abjectly inferior forms of money than cryptos

TCC 6 August 2021

The Crypto Capitalist Letter Next Level Thinking About The New Normal Page of 12 31

If anybody other than me is old enough to remember the original Robocop movie when Murphy is originally unveiled and launched as Robocop he has three prime directives That is analogous crypto currency After his memory is wiped and reprogrammed by committee he has dozens of new and conflicting directives scrolling through is brain at all times and scrambling his mind Those would be CBDCs

Elizabeth Warrenrsquos comments feature in the video toting the benefits of a digital currency implemented by the government ldquoif they are well designedrdquo But governments clogged with pork cannot design anything effectively Not as well as the private sector can

Compared to cryptos

ldquoExperts say these alternative currencies expose the risk of money and payments circulating outside the watchful eyes of central banksldquo

Yes that is the entire point

But if there is one outcome I would bet against here in the West itrsquos that the Fed would use FedCoin to end-in the private banking sector This is where the difference between our nominally free market economies differ from that of the Chinese In China Xi Ching Ping has embarked on a three year campaign of bringing the Chinese Big Tech and FinTech sectors to heel In China the PBC very well could and would end run the private entities because the CCP has or will forcefully insert itself as a senior partner into all significant private undertakings Note that in China subjects do not even have property rights as guaranteed under any kind of constitution or charter not even ceremonially The state is all Whether that can realistically project itself into the future is another question entirely and left for another day

Suffice it to say that the Fed will not be elbowing Bank of America and Citigroup out of the picture As the WSJ explainer video went on

ldquoThe Federal Reserve is still studying the scope and structure of how a digital dollar would work and how it could be integrated into the current banking system

TCC 6 August 2021

The Crypto Capitalist Letter Next Level Thinking About The New Normal Page of 13 31

Expert lsquoThe Fed doesnt wanna start dealing with 300 million customers overnight Theyre not equipped to do that So you dont wanna call up the Fed at midnight and say I forget my password This is not something the Fed wants to be doing or can do So they need to think about who to work with to deliver digital dollarsrsquordquo

Who is equipped to handle all this The existing banking system

Instead look for some manner of a privatepublic partnership (like with Facebookrsquos Diem) or else the private banking system ensconcing itself as the some manner of intermediaries to The Fed Somehow this begins to look like the fusion of banking mega-corps and the state which was how Mussolini and other mid-twentieth century political theorists envisioned Fascism as contrasted with China style communist party dictatorship

But the short list of what wersquove said would be the defining characteristics of Central Bank Digital Currencies are continually talked about in rather matter-of-fact tones including here

ldquoThe Fed would also have to tackle privacy concerns over how anonymous digital dollar payments should be and whether the money should be restricted to specific transactions or programmed to expire after a certain time period to encourage spendingrdquo

Now letrsquos consider what ldquomoneyrdquo is understood to be and then circle back to Senator Warrenrsquos remarks about central bank digital currencies vs ldquobogusrdquo private digital currencies

If one of them meets all the classical definitions of money or more specifically cash fungible private anonymous store of value universally accepted and spendable on anything the holder desires and the other one isnrsquot then which of these digital currencies is actually the one thatrsquos lsquobogusrsquo

TCC 6 August 2021

The Crypto Capitalist Letter Next Level Thinking About The New Normal Page of 13 31

Expert lsquoThe Fed doesnt wanna start dealing with 300 million customers overnight Theyre not equipped to do that So you dont wanna call up the Fed at midnight and say I forget my password This is not something the Fed wants to be doing or can do So they need to think about who to work with to deliver digital dollarsrsquordquo

Who is equipped to handle all this The existing banking system

Instead look for some manner of a privatepublic partnership (like with Facebookrsquos Diem) or else the private banking system ensconcing itself as the some manner of intermediaries to The Fed Somehow this begins to look like the fusion of banking mega-corps and the state which was how Mussolini and other mid-twentieth century political theorists envisioned Fascism as contrasted with China style communist party dictatorship

But the short list of what wersquove said would be the defining characteristics of Central Bank Digital Currencies are continually talked about in rather matter-of-fact tones including here

ldquoThe Fed would also have to tackle privacy concerns over how anonymous digital dollar payments should be and whether the money should be restricted to specific transactions or programmed to expire after a certain time period to encourage spendingrdquo

Now letrsquos consider what ldquomoneyrdquo is understood to be and then circle back to Senator Warrenrsquos remarks about central bank digital currencies vs ldquobogusrdquo private digital currencies

If one of them meets all the classical definitions of money or more specifically cash fungible private anonymous store of value universally accepted and spendable on anything the holder desires and the other one isnrsquot then which of these digital currencies is actually the one thatrsquos lsquobogusrsquo

TCC 6 August 2021

The Crypto Capitalist Letter Next Level Thinking About The New Normal Page of 14 31

EVIL COIN amp THE OLD MONETARY ORDER I was a guest on the UK-based PolicyBlog in the inaugural episode of their lsquoOrigins of Government series with historian and public policy expert John Lillywhite It was organized by Oscar Wendell of from the Dubai World Trade Center GTEX conferences (Lillywhite is currently working out of the United Arab Emirates)

We taped the conversation back in May and it was released this month and after listening to it I hope worth the wait We talk a lot about the coming dynamic between CBDCs and decentralized cryptos

ldquoThis isnrsquot simply an episode about crypto currency - instead itrsquos about how superpowers citizens banks platforms and nation-states are competing to shape the next 100 years of financerdquo

Listen here

RATIONAL EXUBERANCE

While I often say I donrsquot put a lot of stock into technical analysis as in chart patterns and past price movement of stocks I do pay attention to blockchain analysis This underscores the game-changing nature of crypto because when everybody has visibility into the entire blockchain it adds a level of transparency directly into the flow of funds throughout the system

TCC 6 August 2021

The Crypto Capitalist Letter Next Level Thinking About The New Normal Page of 15 31

On his most recent interview on What Bitcoin Did Willy Woo (whose premium letter I subscribe to) tells host Pete McCormick that an accumulation cycle is ending What does that mean Woo calls it ldquoobscenely bullishrdquo

Historically when an accumulation cycle ends it precedes another leg up because at that point there is very little tradable Bitcoin available to be bought While at the moment wersquore still climbing out of the pullback that started back in April and battling to regain the $50K USD mark Woo remarks that

ldquoThe greater environment is amazing Irsquove never seen this structure before Every bottom of a bear market therersquos an accumulation bandhellip every single bottom of a bear market you see that peak the long term holders maximum accumulation Theyrsquove got the most of the coinsrdquo

Woo explains how it then takes higher prices to pry those coins out of the hands of the long term holders leading to those characteristic run-upshellip

ldquoWersquoll be at peak of long term holders accumulating by next month Peak accumulation means a sideways band and then after that we do a run-up The last run-up was 10000 to 60000 starting from October last year The run-up before that was from 4000 to 14000 over a matter of months

So if October we start to peak and we donrsquot know how long that accumulation band is wersquore starting to look into November onwards to go lsquothatrsquos when the run up happensrsquo thatrsquos when all the coins have been scooped up by these long term guys and November is when the ETF launches which is what the SEC is making comments about theyrsquoll probably allow an ETF around November timeframe [ see note on Galaxy below - markjr]rdquo

ldquoMcCormack That will be bullish as frdquo

ldquoRight and then you take a look at that and think lsquowhoarsquo whatever the policy is even if that doesnrsquot happen (the ETF) just the structure of the market ishellip this thing is gonna go nutsrdquo

TCC 6 August 2021

The Crypto Capitalist Letter Next Level Thinking About The New Normal Page of 16 31

Irsquove quoted this passage at length because it captures the stars aligning for another monster move in cryptos over the final quarter of 2021 and into 2022 From the very beginning of this year thinking here at TCC has been that wersquore going to end the year with a six digit Bitcoin price and nothing ever dissuaded us from that prediction The time to line up our ducks is now if we havenrsquot already

That passage in the podcast starts around the 1 hour mark before that Woo and McCormack are ranting about the unusability of the traditional banking system something I echoed in my Bombthrower article about the institutionalized lethargy and complacency that defines the entire sector

Irsquom running into this personally again as I try to invest a small bequest on behalf of a relative for which Irsquom the trustee The banking system is painful itrsquos slow and itrsquos bureaucratic So Irsquom trying to get her bequest invested into cryptos before this next run up happens If all goes well that modest bequest from a relative will end up paying off her student loans in a few years perhaps with a down payment on a condo to spare

GALAXY DIGITAL FILES FOR A BITCOIN FUTURES ETF A full fledged Bitcoin ETF has been the Holy Grail for Bitcoin bulls for years From the Winkelvoss twins all the way to the Grayscale Trust who is trying to convert into an ETF everybody wants a Bitcoin ETF and expects things to really blast off when that happens (hopefully not a contra indicator when it finally does come to pass)

That may seem weird to us Canadians since wersquove had Bitcoin and Ethereum ETFs here for months As per one commentator

ldquoItrsquos a really bizarre world where you can launch a bitcoin ETF in Canada US people can buy it through their brokerages and you can create a US ETF that includes Canadian ETFs but a bitcoin ETF isnrsquot available in the USrdquo

Nonetheless Galaxy has filed for a Bitcoin futures ETF which is not the same thing as a spot ETF However the reference Woo made to talk coming out of the SEC around a long awaited ETF may be that SEC Chairman Gary Gensler has indicated that the agency is preferring futures ETFs when it finally comes time to approve these things

TCC 6 August 2021

The Crypto Capitalist Letter Next Level Thinking About The New Normal Page of 17 31

In that sense it looks like Galaxy CEO Mike Novogratz is ldquoskating to where he thinks the puck is going to be not where it isrdquo

SECOND LARGEST US MORTGAGE LENDER TO ACCEPT BITCOIN In their Q2 conference call this month United Wholesale Mortgage (which came public earlier this year via a SPAC deal) declared their intention begin accepting Bitcoin payments in Q3 this year with an eye toward accepting other cryptos like Ethereum

CEO Mat Ishbia

ldquoWersquove evaluated the feasibility and wersquore looking forward to being the first mortgage company in America to accept cryptocurrency to satisfy mortgage paymentsrdquo

United hasnrsquot yet disclosed whether they will HODL any Bitcoin received or simply convert it to fiat In my mind it doesnrsquot really make sense to accept Bitcoin unless you HODL some portion of it Thatrsquos what makes the move transformative for your business finances

(On this note in September wersquore introducing a course in ldquoCrypto-fying Your Businessrdquo if yoursquore a business owner and you want to hitch your wagon to the crypto train email us about your interest and wersquoll let you know when the course is ready)

NOT SURE IF THIS IS BULLISH OR NOThellip My friend Mike Swanson over at Wall Street Window is not a crypto fan and we debate it from time to time and itrsquos something we just agree to disagree on

But he sent out a note last week highlighting that CNBCrsquos Jim Cramer recommended to a caller in his ldquolightning roundrdquo that long term investors should have 5 of their portfolios in crypto and that COIN was as good a place as any to do that Cramer also said he owns Ethereum directly (and by that I assume he means via a closed end trust or ETF because I really canrsquot picture Cramer installing Metamask on his iPhone)

Anyhoo Swanson was right when he described it as ldquoA slurring Jim Cramer tells people up to 5 of your portfolio should be in cryptordquo

TCC 6 August 2021

The Crypto Capitalist Letter Next Level Thinking About The New Normal Page of 18 31

I never watch CNBC and when I do itrsquos like a car crash Cramer comes off as a frantic meth head How can anybody take this guy seriously How can anybody call this investing What I admire the most about the super-investors in the field and throughout the ages is the work they put into researching their ideas Sometimes they will put months of due diligence into an idea and not even go ahead with it Meanwhile we have these couch potatoes calling into Jim Cramerrsquos lightning round for a 15 second sound byte on what they should do with their moneyhellip And then they go and do it

Shaking my head

It makes me uncomfortable just being on the same side of the fence as the guy but when I take a breath and think about it thatrsquos more of a knee-jerk curmudgeonly contrarianism that I am sometimes prone to

As the wider public comes into this asset class we have to expect the likes of Jim Cramer and Elon Musk acting like theyrsquore the vanguard My guess is anybody who buys into a crypto position or stock because Jim Cramer told them to wonrsquot have the conviction to hold through those mind bending corrections and pullbacks like the one we just came through

TCC 6 August 2021

The Crypto Capitalist Letter Next Level Thinking About The New Normal Page of 19 31

TALES FROM THE JACKPOT Wherein we lay out our suspicions that we are living in a near-future cyberpunk novel

The rapid fall of Afghanistan is I think one of those hinge moments in time There is the aspect of history rhyming the iconic photo of the CH-47F Chinook lifting off from the roof of the US consulate hearkening back to the ldquolast chopper outrdquo photo from the fall of Saigon in 1975

But there is more to it today It seems to truly put a stamp of finality to the end of US Hegemony because military muscle aside all other aspects of US power are clearly back on their heels

As that earlier map of world trade partners depicts China is the preeminent trading partner outside of North America The USD is openly speculated to be on its way to losing its world reserve currency status (see below) The country is starkly divided between ever-widening polarization where half the population despises the other and a groundswell of self loathing openly pines for the complete destruction of Americarsquos legacy institutions and achievements Socialism is openly espoused and collectivism nurtured and itrsquos all headed up by an enfeebled head of state who is arguably senile or at least in severe cognitive decline

TCC 6 August 2021

The Crypto Capitalist Letter Next Level Thinking About The New Normal Page of 20 31

When the Soviet Union fell James Dale Davidson and Lord Rees-Mogg didnrsquot view it was an ultimate victory of the USA over the USSR In their seminal work The Sovereign Individual which came out in 1997 and presciently anticipated coming era they described it as analogous to the death of a fraternal twin

ldquoWhen you come to understand why you are much closer to recognizing what the fall of the Berlin Wall and the death of Communism really mean Far from assuring that the democratic welfare state will be a triumphant system as has been widely assumed it was more like seeing that a fraternal twin has died of old age The same megapolitical revolution that killed Communism is also likely to undermine and destroy democratic welfare states as we have known them in the twentieth centuryrdquo

That mega political revolution was the emergence of an information economy and what myself and others have been calling the transition from nation states to network states

That shift may have claimed the Soviet Empire first but according to the authors the USA would follow it in a few decades as the accelerating information economy made its core institutions sclerotic brittle and ultimately obsolete

US hegemony will fade as the USD loses relevance as a global reserve asset Wersquove seen that de-dollarization has already begun in certain parts of the world

The current reigning bond king Jeff Gundlach did not mince words in a recent interview with Yahoo Finance where he flat out said the Fed is ruining the economy and the US is headed toward the loss of world reserve currency status

Were running our economy in a way that is almost like were not interested in maintaining global reserve currency statushellipAnd so as long as we continue to run these policies and were running them more and more aggressively wersquore not pulling back on them in any way we are looking at a roadmap that is clearly headed towards the US dollar losing its sole reserve currency statusrdquo

Gundlach is not alone Coindeskrsquos David Z Morris wrote about the ldquoThe End of Exorbitant Privilege Inflation the Global Dollar and What Comes Nextrdquo In it he noted

TCC 6 August 2021

The Crypto Capitalist Letter Next Level Thinking About The New Normal Page of 20 31

When the Soviet Union fell James Dale Davidson and Lord Rees-Mogg didnrsquot view it was an ultimate victory of the USA over the USSR In their seminal work The Sovereign Individual which came out in 1997 and presciently anticipated coming era they described it as analogous to the death of a fraternal twin

ldquoWhen you come to understand why you are much closer to recognizing what the fall of the Berlin Wall and the death of Communism really mean Far from assuring that the democratic welfare state will be a triumphant system as has been widely assumed it was more like seeing that a fraternal twin has died of old age The same megapolitical revolution that killed Communism is also likely to undermine and destroy democratic welfare states as we have known them in the twentieth centuryrdquo

That mega political revolution was the emergence of an information economy and what myself and others have been calling the transition from nation states to network states

That shift may have claimed the Soviet Empire first but according to the authors the USA would follow it in a few decades as the accelerating information economy made its core institutions sclerotic brittle and ultimately obsolete

US hegemony will fade as the USD loses relevance as a global reserve asset Wersquove seen that de-dollarization has already begun in certain parts of the world

The current reigning bond king Jeff Gundlach did not mince words in a recent interview with Yahoo Finance where he flat out said the Fed is ruining the economy and the US is headed toward the loss of world reserve currency status

Were running our economy in a way that is almost like were not interested in maintaining global reserve currency statushellipAnd so as long as we continue to run these policies and were running them more and more aggressively wersquore not pulling back on them in any way we are looking at a roadmap that is clearly headed towards the US dollar losing its sole reserve currency statusrdquo

Gundlach is not alone Coindeskrsquos David Z Morris wrote about the ldquoThe End of Exorbitant Privilege Inflation the Global Dollar and What Comes Nextrdquo In it he noted

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how the US dollar share of world reserve assets has been in decline and is now at a 25-year low down from 71 to now less than 60

More startling in the Morris piece was an almost blithe reference to the possibility of a disorderly break-up of the United States itself

ldquo[this exorbitant privilege] would not just slow but potentially reverse as the dollarrsquos reserve status declines This would most likely be a gradual process with incremental effects as wersquove seen with the dollarrsquos declining share already

But a run on the bank is also a possibility If the dollar experiences a sharp shock ndash letrsquos say something on the scale of a second US Civil War ndash foreign nations would move quickly to trade dollar bonds for superior assets from US entities Therersquos nothing to stop this without implementing currency controls which would ultimately end reserve status in itselfldquo

For years now I have mused privately that Donald Trump may have been the penultimate president of a unified United States Meaning that whoever came after him would be the last president Irsquom not exactly saying that a breakup of the US is imminent but it certainly seems like all the elements are there

(In my own country of Canada Quebec is perpetually in varying stages of pushing for separation However if Trudeau succeeds in his machinations for a majority government with this snap election I could see that fanning the flames of a Wexit Given the Liberal war against the oil industry the incentives for Alberta to simply go it alone would soar given the prospect of 5 more years of ritualized animosity toward their mainstay industry Not that a Trudeau majority may be in the cards The public appears to be pissed and his snap election may backfire into another slim minority or possibly even a loss to an underwhelming non-entity like Erin OrsquoToole )

I am reminded of two episodes in history where the regimes collapsed with blinding speed and their demise was unimaginable in the few short months or years leading up to them

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One is the aforementioned collapse of the Soviet Union which pretty well nobody predicted least of all the Western intelligence agencies Even in the year leading up to it absolutely nobody saw it coming

The other was also in Russia with the collapse of the 800 year old Romanov dynasty in under 72 hours at a time when it seemed its hold on power was unassailable

ldquoThe crisis started in the fall of [19]16 The Tsar was deposed in February of 17 so five months before it happened nobody realized it Not only did nobody realize it the consensus was for exactly the opposite The consensus was that the Tsarrsquos administration was clamping down on civil liberties and the dark road of repression was ahead Civil liberties were constrained and the Tsar was going to take over and would clamp down even more The Deep State in todays language was in complete control and clamping down

For context the tradition that fell apart was in power for 800 years leading up to that moment and the Romanov Dynasty was in power for 300 years

And then the whole thing came down in 72 hoursrdquo

One of the core tenets of The Crypto Capitalist body of thought is that the entire world is undergoing such a tumultuous reconstitution Wersquore in one of those air pockets when all bets are off and everything we think is conventional wisdom is probably wrong

The established policy makers are operating on the premise of a linear extension from their previous experience Central Bank Digital Currencies are the purest expression of this assumption Take central bank issued fiat currency digitize it add the ability to overlay ideological policy imperatives onto money (like social credit) and then everything just continues on as before

But the underlying architecture of the global power structure is phase shifting into something else entirely and the reason why is because decentralized non-state cryptographically secured money is already here The smart money realizes that this is a superior form of money to preserve wealth and autonomy Everything else is secondary

TCC 6 August 2021

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One is the aforementioned collapse of the Soviet Union which pretty well nobody predicted least of all the Western intelligence agencies Even in the year leading up to it absolutely nobody saw it coming

The other was also in Russia with the collapse of the 800 year old Romanov dynasty in under 72 hours at a time when it seemed its hold on power was unassailable

ldquoThe crisis started in the fall of [19]16 The Tsar was deposed in February of 17 so five months before it happened nobody realized it Not only did nobody realize it the consensus was for exactly the opposite The consensus was that the Tsarrsquos administration was clamping down on civil liberties and the dark road of repression was ahead Civil liberties were constrained and the Tsar was going to take over and would clamp down even more The Deep State in todays language was in complete control and clamping down

For context the tradition that fell apart was in power for 800 years leading up to that moment and the Romanov Dynasty was in power for 300 years

And then the whole thing came down in 72 hoursrdquo

One of the core tenets of The Crypto Capitalist body of thought is that the entire world is undergoing such a tumultuous reconstitution Wersquore in one of those air pockets when all bets are off and everything we think is conventional wisdom is probably wrong

The established policy makers are operating on the premise of a linear extension from their previous experience Central Bank Digital Currencies are the purest expression of this assumption Take central bank issued fiat currency digitize it add the ability to overlay ideological policy imperatives onto money (like social credit) and then everything just continues on as before

But the underlying architecture of the global power structure is phase shifting into something else entirely and the reason why is because decentralized non-state cryptographically secured money is already here The smart money realizes that this is a superior form of money to preserve wealth and autonomy Everything else is secondary

TCC 6 August 2021

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There are trillions of dollars of wealth globally that has built-in imperatives and that capital takes on a logic of its own Call it ldquoBig Moneyrdquo It doesnrsquot want to be redistributed for social justice chiseled away by inflation hard coded with somebody elsersquos policy constraints or be otherwise confiscated to satisfy left-wing or woke ideological tropes That means Big Money is going to get behind non-CBDC options almost by definition

This is actually a good thing because before the Enlightenment Big Money and Big Government was the same thing The sovereign owned all the wealth and even owned the people who lived on his land

Once the Enlightenment and the Reformation and Industrial Revolutions hit that started to separate People acquired self-ownership and were recognized to have inalienable rights (albeit some sooner than others) They gained the ability to hold property and form capital It is not a coincidence that the world blasted off into the early innings of a Star Trek society because suddenly millions and now billions of people could unleash their own creativity and entrepreneurial talents

Because of this is fundamental re-ordering in the structure of power itself (removing the last vestiges of centralized state control from money) over the long term what the incumbent elites want doesnrsquot really matter Whatever happens it isnrsquot going to be a simple linear extrapolation of what went on before In that sense this is a Great Reset But itrsquos not under control of the Davos crew the IMF or the WTO

It isnrsquot under anybodyrsquos control and thatrsquos what makes it both exciting and terrifying

THE WEALTH IMPERATIVE Despite the long terms implications of this structural shift in the near term a couple of data points below feed my suspicions around The Great Bifurcation scenario Thatrsquos the idea that policymakers have tacitly arrived at the consensus that the rabble must downsize their standard of living The rationale is for climate for social justice but in reality it is primarily because the debt super-cycle has reached its limits

Governments have lived beyond their means for the entire period of the fiat money era and now that wersquore out of runway they want hand off the bill to those governed

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bull The US infrastructure bill contains a provision to institute a per-mile user fee for driving cars Itrsquos a tax grab that will also make it increasingly prohibitively expensive to drive for many working and middle class car owners

bull A New York Times op-ed called for higher insurance premiums on unvaccinated people and another liberal thought piece goes further calling for a tax on the unvaxxed

Expect to see more initiatives like these Things like additional taxes and climate surcharges on meat air travel second homes internal combustion cars Itrsquos a controlled demolition of the middle class and therersquos really only one antidote to navigating it be wealthy

If we have plenty of assets income and capital then all of these will be annoyances but the cost of being affluent To the majority of people who will alas be on the wrong side of the Great Bifurcation these will not be mere annoyances they will be barriers Limitations Demarcation points on existence itself

Those who truly want to live a ldquono limitsrdquo type lifestyle bounded only by onersquos maximum potential yoursquoll have to be wealthy in order to do it This has been true in the past when wealth was determined primarily by heredity Fortunately in this day and age wealth can be self-selecting

This is what crypto capitalism is all about The way to fight for true justice and equality of opportunity in the world thatrsquos coming is to be wealthy and use your influence to create more crypto capitalists that can network together to advocate for better policies and more egalitarian governance structures There is already a lot of early prototypical work going on in the DeFi space with Decentralized Autonomous Organizations governance tokens and who knows what else is coming

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OTHER BUSINESS

Gold is steady So is silver I mentioned last month that I cut my gold losers (not many of those) and kept my winners Some of my gold positions are older than my teenaged daughter The reason I mention this is because this is because Irsquom trying to replicate this in our crypto portfolio The companies we buy now and over the next year or two will ideally be our long term core holdings which we would only sell to meet predetermined financial goals (like a summer home or a villa in Barbados)

While nowadays itrsquos hip for tech companies to accrue Bitcoin to hold on their balance sheet one thing I did notice this month was a tech company buying gold to hold on their balance sheet

That company was Palantir who announced that they bought $507M USD in 100oz gold bars in order to ldquohedge against a Black Swan Eventrdquo

AMAZON TO OPEN DEPT STORES Over in my AxisOfEasy podcasts my co-hosts and I came up with the ldquocompany storerdquo metaphor for retail behemoth Amazon According to the WSJ

ldquoAmazon plans to open several large physical retail locations in the US that will operate akin to department stores a step to help the tech company extend its reach in sales of clothing household items electronics and other areas people familiar with the matter saidrdquo

If there was one overarching winner from the pandemic with the work-from-home revolution the war on small business the implementation of lockdown society it was Amazon

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VACCINE HESITANCY AND VACCINE MANDATES As vaccine mandates sweep the world to greater public pushback in many locales it was interesting to note that the two most hesitant cohorts of the vaccine hesitant in terms of education level were the two ends of the curve the least educated and PHDs are the most vaccine hesitant

Further vaccine hesitancy is coming decreasing faster in the lowest educated group Meaning the most stubborn vaccine hesitant among the population are the most educated

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The Crypto Capitalist Portfolio Updates on companies in The Crypto Capitalist Portfolio If we donrsquot mention it this month it means wersquore still holding it and nothing material has happened

GALAXY DIGITAL TSX GLXY PINK BRPHF

Galaxy released their Q2 earnings on August 16 the day after the mid-month portfolio update came out and I was expecting some damage from the crypto pullback over the first part of the year

It wasnrsquot as bad as I expected Partnerrsquos Capital decreased 11 in the quarter but overall AUM was up 12 passing the $16B USD mark Net comprehensive income was a loss of $1785M compared to a gain of $353M for Q2 last year Again - that is 100 due to declining crypto asset prices which are once again on the rise

Counter-party trading volume was up 130 quarter-over-quarter

They invested $52M USD into 14 different NFT companies and with NFTs being on fire now this looks like it will pay off sooner than later

The company now has 84 investments across 68 portfolio companies

Remember our model for Galaxy Theyrsquore our Berkshire Hathaway of the crypto space

BITFARMS INC TSX-V BITF Nasdaq BITF

Bitfarms also released earnings on the 16th they had revenues of $367M on the quarter with gross profit margins of 64 ($234M USD)

They posted an operating loss of $21M USD with an adjusted EBITA of $238M Remember that our miners tend to HODL their BTC not sell it so this leads to

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operational cash burn to maintain operations while their balance sheet inventory accrues value as Bitcoin goes up

Bitfarms currently holds 1293 BTC having mined 759 BTC over the quarter Not a bad balance having started from zero at the beginning of the year (prior to that Bitfarms was selling its mined Bitcoin into the market)

They did another private placement for $75M USD and put most of that money into more miners bringing their overall hash rate up to 274 EHs (by my calculations) or 21 of the current global hash rate (roughly 130 EHs)

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COINBASE Nasdaq COIN

Coinbase announced that theyrsquove set up a $4B USD slush fund solely to fund dealing with regulatory compliance issues Theyrsquove also announced that theyrsquore allocating 10 of their earnings into treasury crypto that the company will own and HODL

Coinbase is still a buy at these levels Irsquove been incrementally adding to my position all the way through this correction

NEW POSITION DEFI TECHNOLOGIES INC NEO DEFI OTC DEFTF

DeFi Technologies are a Canadian listed company based out of Europe that is focused on the decentralized finance space You may recognize the name from a few months back when they did a stock swap with HIVE Blockchain another portfolio company HIVE and DEFI own around 5 of each otherrsquos common shares (HIVE has 65 of DEFI I think) so wersquove already had some exposure to this company

DeFi has a few different projects on the go They run some ETN products on exchanges in Europe and have various subsidiaries active in the DeFi space They have a policy of

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holding the earned fees and income from these projects as their native DeFi assets making this company a way to gain exposure to the burgeoning DeFi space without having to get involved in trying some of these more exotic strategies yourself

This snapshot from their Bermuda trading subsidiary gives us a glimpse into the type of DeFi tokens they are accumulating

They just announced running a private validator node for Shyft a ldquosemi-permissioned blockchain designed to embed trust validation and discoverability into public and private ecosystemsrdquo Thatrsquos brought in 300K SHFT tokens which trade around the $1 USD mark at the moment This one node will be generating over 6000 SHFT per day on an ongoing basis which is about $21M USD annually at the current value for Shyft

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The Crypto Capitalist Letter Next Level Thinking About The New Normal Page of 28 31

operational cash burn to maintain operations while their balance sheet inventory accrues value as Bitcoin goes up

Bitfarms currently holds 1293 BTC having mined 759 BTC over the quarter Not a bad balance having started from zero at the beginning of the year (prior to that Bitfarms was selling its mined Bitcoin into the market)

They did another private placement for $75M USD and put most of that money into more miners bringing their overall hash rate up to 274 EHs (by my calculations) or 21 of the current global hash rate (roughly 130 EHs)

TCC 6 August 2021

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COINBASE Nasdaq COIN

Coinbase announced that theyrsquove set up a $4B USD slush fund solely to fund dealing with regulatory compliance issues Theyrsquove also announced that theyrsquore allocating 10 of their earnings into treasury crypto that the company will own and HODL

Coinbase is still a buy at these levels Irsquove been incrementally adding to my position all the way through this correction

NEW POSITION DEFI TECHNOLOGIES INC NEO DEFI OTC DEFTF

DeFi Technologies are a Canadian listed company based out of Europe that is focused on the decentralized finance space You may recognize the name from a few months back when they did a stock swap with HIVE Blockchain another portfolio company HIVE and DEFI own around 5 of each otherrsquos common shares (HIVE has 65 of DEFI I think) so wersquove already had some exposure to this company

DeFi has a few different projects on the go They run some ETN products on exchanges in Europe and have various subsidiaries active in the DeFi space They have a policy of

TCC 6 August 2021

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holding the earned fees and income from these projects as their native DeFi assets making this company a way to gain exposure to the burgeoning DeFi space without having to get involved in trying some of these more exotic strategies yourself

This snapshot from their Bermuda trading subsidiary gives us a glimpse into the type of DeFi tokens they are accumulating

They just announced running a private validator node for Shyft a ldquosemi-permissioned blockchain designed to embed trust validation and discoverability into public and private ecosystemsrdquo Thatrsquos brought in 300K SHFT tokens which trade around the $1 USD mark at the moment This one node will be generating over 6000 SHFT per day on an ongoing basis which is about $21M USD annually at the current value for Shyft

TCC 6 August 2021

The Crypto Capitalist Letter Next Level Thinking About The New Normal Page of 29 31

COINBASE Nasdaq COIN

Coinbase announced that theyrsquove set up a $4B USD slush fund solely to fund dealing with regulatory compliance issues Theyrsquove also announced that theyrsquore allocating 10 of their earnings into treasury crypto that the company will own and HODL

Coinbase is still a buy at these levels Irsquove been incrementally adding to my position all the way through this correction

NEW POSITION DEFI TECHNOLOGIES INC NEO DEFI OTC DEFTF

DeFi Technologies are a Canadian listed company based out of Europe that is focused on the decentralized finance space You may recognize the name from a few months back when they did a stock swap with HIVE Blockchain another portfolio company HIVE and DEFI own around 5 of each otherrsquos common shares (HIVE has 65 of DEFI I think) so wersquove already had some exposure to this company

DeFi has a few different projects on the go They run some ETN products on exchanges in Europe and have various subsidiaries active in the DeFi space They have a policy of

TCC 6 August 2021

The Crypto Capitalist Letter Next Level Thinking About The New Normal Page of 30 31

holding the earned fees and income from these projects as their native DeFi assets making this company a way to gain exposure to the burgeoning DeFi space without having to get involved in trying some of these more exotic strategies yourself

This snapshot from their Bermuda trading subsidiary gives us a glimpse into the type of DeFi tokens they are accumulating

They just announced running a private validator node for Shyft a ldquosemi-permissioned blockchain designed to embed trust validation and discoverability into public and private ecosystemsrdquo Thatrsquos brought in 300K SHFT tokens which trade around the $1 USD mark at the moment This one node will be generating over 6000 SHFT per day on an ongoing basis which is about $21M USD annually at the current value for Shyft

TCC 6 August 2021

The Crypto Capitalist Letter Next Level Thinking About The New Normal Page of 30 31

holding the earned fees and income from these projects as their native DeFi assets making this company a way to gain exposure to the burgeoning DeFi space without having to get involved in trying some of these more exotic strategies yourself

This snapshot from their Bermuda trading subsidiary gives us a glimpse into the type of DeFi tokens they are accumulating

They just announced running a private validator node for Shyft a ldquosemi-permissioned blockchain designed to embed trust validation and discoverability into public and private ecosystemsrdquo Thatrsquos brought in 300K SHFT tokens which trade around the $1 USD mark at the moment This one node will be generating over 6000 SHFT per day on an ongoing basis which is about $21M USD annually at the current value for Shyft

TCC 6 August 2021

The Crypto Capitalist Letter Next Level Thinking About The New Normal Page of 31 31

DROP BLOCKCHAIN FOUNDRY AND BIGG DIGITAL ASSETS

The band-aid moment has arrived for me Wersquove said from the very beginning We will run a relatively concentrated portfolio of around 10 names and if something interesting comes along later it has to be compelling enough to replace our weakest positions

Blockchain Foundry just isnrsquot panning out even though Syscoin seems to be recovering along with many of the other alt-coins I still donrsquot see an ecosystem or a meaningful community evolving around it

BIGG is still a good little company but I have my suspicions that theyrsquore going to stay that way At a quarter billion market cap they arenrsquot priced like one

When it comes to crypto-currency exchanges right now COIN is the place to be that has all the tailwinds the momentum and is putting up outstanding numbers

Recommendation Sell BCFN and BIGG put proceeds into DEFI andor COIN

WHAT COMES NEXT

Most of the world goes back to school next week though Irsquom told that many locales in the US already go back in August The crypto recovery continues as we try to break $50K on the Bitcoin side Ethereum showing impressive relative strength

All stars look aligned for a characteristic fourth quarter run as has been the case in prior bull cycles

Thank you for saying ldquoyesrdquo to Crypto Capitalism

TCC 6 August 2021

• A Bombthrower Media publication
• THIS MONTHrsquos FUD
• Fed agencies battle it out
• Crosschain network Poly hacked funds returned
• Billionaire John Paulson calls cryptos worthless
• Eye on Evilcoin
• Evil Coin amp the Old Monetary Order
• Rational Exuberance
• Galaxy Digital Files for a Bitcoin futures ETF
• Second largest US mortgage lender to accept Bitcoin
• Not sure if this is bullish or nothellip
• Tales from the Jackpot
• The Wealth Imperative
• Other Business
• Amazon to open dept stores
• Vaccine Hesitancy and vaccine mandates
• Galaxy Digital
• Bitfarms Inc
• Coinbase
• New Position DeFi Technologies Inc
• Drop Blockchain Foundry and BIGG Digital Assets
• What Comes Next