The following is this week's Bitcoin 🛟 Roundup, presented by Coinbits.

Bitcoiners,

The public's perception of bitcoin is shifting as its exchange rate with the U.S. dollar continues to rise. 

Traditional financial institutions are now producing bitcoin commercials. Howard Lutnick, the CEO of Cantor Fitzgerald, stated, "I am a fan of crypto, but let me be very specific: bitcoin, just bitcoin."

In response, critics of bitcoin are becoming increasingly aggressive.

U.S. Senator Elizabeth Warren (D-Mass.) and others who wish to keep Americans trapped in a failing system are drafting legislation to prevent the bitcoin industry's growth on the false premise that it is just a tool for crime.

Warren even sent a letter to bitcoin and cryptocurrency industry groups demanding details on their employment of former government officials, a scare tactic to prompt “over-compliance” and unfairly malign an entire burgeoning industry.

Not to be outdone, Matt Stoller, a researcher at the "American Economic Liberties Project," proclaimed that "anyone involved with crypto is committing treason."

Is there any truth to these claims? Of course not. In fact, the data is so easy to find, that it’s hard to believe these arguments are made in good faith.

Bitcoin is a terrible tool for money laundering – government money is king for that.

Meanwhile, the Constitution of the United States protects the rights of individuals to engage in free speech, and U.S. courts have recognized code as speech for many decades.

Although attacks on bitcoin could harm Americans in the short term, there is a silver lining – they are a sign that bitcoin is being taken seriously by those in power.

With that, let's dive into the news.

NEWS

Spot bitcoin ETF applicants bend the knee to the SEC 🙇

BlackRock revised its spot bitcoin ETF proposal to provide for cash creation and redemption mechanisms favored by the Securities and Exchange Commission. The move will increase the ETF’s chances of being the first to cross the finish line. This update follows the SEC's stated concerns about in-kind redemption.

Wall Street capitulates to Gensler.

BlackRock joins several other firms in adapting their ETF applications amid expectations of approval in January of 2024. An in-kind spot bitcoin ETF would have been a better product by allowing shareholders to redeem for actual bitcoin, but firms optimized for quick approvals instead.

ETH-BTC approaches yearly lows 📉

As shown in the chart below, the ETH-BTC exchange rate continues to drop, following months of statements from Ethereum supporters predicting that it would soon surpass bitcoin’s market cap in a “flippening” event.

BTC (+156%) is up almost double ETH (+82%) YTD

ETH/BTC on the cusp of yearly lows. can it hold 0.0512? pic.twitter.com/PBh5Ro3z3M

— Alex Thorn (@intangiblecoins) December 19, 2023

Solana, a network famous for its downtime, having shut down at least ten times, gained traction against Ethereum in the war for the dubious position of “leading altcoin.”

Elizabeth Warren’s cronies revealed 🏦

By forcing node operators and other digital asset service providers to comply with Bank Secrecy Act (BSA) and Know Your Customer (KYC) obligations, Senator Elizabeth Warren's Digital Asset Anti-Money Laundering Act, co-sponsored by Senator Roger Marshall, favors big banks by making it more challenging, and sometimes impossible, for bitcoin and crypto developers and startups to compete with the megabanks.

Your taxpayer dollars are hard at work – for the banks.

This week, a video revealed that Warren and Marshall collaborated with the Bank Policy Institute, a banking lobbying group, to draft the bill after Warren declared a truce with the big banks once they agreed to oppose bitcoin and crypto with her.

The bitcoin ETF ads are here 📺

Bitwise Asset Management launched what seems to be the first advertising campaign for a spot bitcoin ETF, featuring Jonathan Goldsmith, known as the "Most Interesting Man in the World" from Dos Equis ads. Bitwise is using the advertisements to highlight itself as a "crypto specialist," drawing a contrast with more established ETF providers like BlackRock. 

First shot fired in the bitcoin media blitz.

This ad is only the first of many – and is precisely what the beginning of a "mainstreaming" phase of bitcoin would look like. Just remember the importance of acquiring real bitcoin and holding it in self-custody as opposed to shares of an ETF.

BITCOIN ADOPTION CONTINUES

The Human Rights Foundation allocated $500,000 in grants to 18 bitcoin projects working to enhance financial freedom and resist censorship.

Relai, a Swiss Bitcoin exchange, reports that it is observing wealthy clients rebalance their portfolios by reducing exposure to real estate in favor of bitcoin.

Cipher Mining invested $99.5 million in Bitmain's next-gen T21 mining rigs, expecting to boost its mining capacity by 7.1 exahashes per second by 2025.

Strainly and BTCPay published a case study demonstrating the successful use of bitcoin for payment processing in the financially marginalized cannabis industry, highlighting its efficacy as a tool resistant to censorship.

HOW BITCOIN WORKS

Learn one key idea about bitcoin each week. This week:

Bitcoin is a different form of risk.

When it comes to risk, bitcoin is unique. Traditional financial systems are laden with counterparty risks, where an asset depends on the actions and stability of other entities, like banks or corporations. Bitcoin shifts this paradigm.

Holding bitcoin in self-custody eliminates counterparty risk. This differentiates it from traditional financial assets and even other digital assets like stablecoins.

Although stablecoins may be held in self custody, they are still tied to the solvency and integrity of their issuers. Holders cannot redeem the stablecoins for the fiat currency that backs them if the issuer fails or faces regulatory closure.

Thus, even if stablecoins are held in self custody, they still carry counterparty risk.

On the other hand, bitcoin stands apart due to the robustness of the Bitcoin Network combined with the ability to hold bitcoin in self custody. Because it is decentralized, its value and operation aren't contingent on any single entity. This strength provides security and stability unrivaled by other digital assets, and even government currencies.

However, it’s not all roses. Eliminating counterparty risk introduces a new type of risk with which many newcomers are unfamiliar – the risks associated with managing one’s own private keys. When you hold bitcoin in self custody, you are solely responsible for safeguarding it. If your private key is lost or stolen, your loss may be irreversible.

This might sound daunting, but some of the most exciting innovation currently happening in the bitcoin industry has to do with private key management. Developers are creating products and services that let people share risk with trusted family members, vault bitcoin with redundant co-signers, create federated e-cash mints, and other solutions.

Bitcoin offers a unique tradeoff. It uses cryptography to create a form of digital money that is totally independent from control by any single entity. Because it eliminates counterparty risk completely, bitcoin requires a higher level of personal responsibility by its users.

FROM THE MEME POOL

https://t.co/ne199xGGlS pic.twitter.com/mp8uliOQKd

— allen farrington (@allenf32) December 19, 2023

That’s all for this week, folks! Sign up here to get the newsletter delivered straight to your inbox weekly.