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GM everyone. This is 2036, the crypto newsletter that pays you 💸
Some of the most profound shifts in recent history are happening right now.
Western banks are insolvent. China and its allies are moving away from the US dollar.
At the same time, crypto is on an uptrend.
So what does this all mean for you?
Let’s dig in.
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You probably remember Occupy Wall Street. People protesting Wall Street shouting - “we are the 99%.”
But at the time of the protest, most bankers didn’t really give a shit.
bankers being bankers
As the Internet grew in popularity, the spirit of Occupy Wall Street evolved into something new and digitally-native: Wall Street Bets.
r/wallstreetbets is a Reddit community with over 13 million members. You might have heard about them already.
In early 2021, the degenerates (as they call themselves) got together and pumped the stock of Gamestop 600% in a few days, leading to billions of $$ of losses for a bunch of hedge funds.
In a matter of days, institutions woke up to the power of the hive mind - a digital mob of kids in their basements who could communicate and trade instantly in real-time.
And they could take on the system.
WallStreetBets has mostly calmed down since then, but digital catastrophes and financial surprises have only accelerated.
On Wednesday, March 8, Silicon Valley Bank made an announcement to their shareholders about their cash position.
On Thursday, March 9th, depositors pulled $40 billion out of the bank.
By Friday, March 10th, the bank was dead.
It took just 48 hours for the second-most devastating bank run in US history to start and finish.
Contrast that to 1909, when J.P. Morgan slowed a bank run by instructing bank tellers to count the cash twice.
let me count that one more time for you madam
Different days, those were.
The problem is that most institutions, like banks, are not prepared for this speed of change.
They stick to their rehearsed messages and platitudes.
But when they go out of their way to say ‘the system is resilient’ - you know something’s up.
It’s like when Sam Bankman Fried told everyone - assets are fine. Now he faces like a gazillion years in prison.
Because everything isn’t fine.
Banks face even more losses if interest rates remain high and people feel their money isn’t safe.
So a lot of us have turned to crypto.
But the US government has launched war on crypto.
Silvergate and Signature banks were crypto banks.
And a few months ago, the SEC shut down staking at Kraken.
It’s now preparing to sue the sh*t out of Coinbase (which has already started limiting trading and withdrawals severely).
And this week, the CFTC sued Binance.
Blocking the money exits is a classic move in the playbook of countries going broke.
In 2012, Argentina banned locals from buying dollars. The currency has lost 99% of its value since then.
And $500 billion has already been withdrawn from small US banks since the collapse of SVB.
To fill the hole, banks have borrowed billions.
loans by small banks. look closely to the right
The whole thing is a mess, but regulators can’t say this openly.
Money is a game of trust, and if we lost trust in their ability to competently steer the ship, everything could collapse.
Instead, the US Government has announced a new digital currency - Fednow.
It’s a money system where every payment goes through a Fed-controlled server and must "comply with applicable controls.”
The roadmap includes "consumer-to-government" and "government-to-consumer" payments, which means automatic debiting from your account and automatic stimulus.
Yeah that’s about as scary as it sounds.
And it’s coming to a theater near you in July.
President Xi just confirmed to Putin a few days ago - “change that hasn’t happened in 100 years is coming and we are driving this change together.”
That’s why we think it’s more important than ever to own bitcoin.
Because the exit doors may be closing soon.
And as Lenin said - there are decades where nothing happens, and there are weeks where decades happen.
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