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We are going to count down our favorite stories of the year and the best stories of the year. To me, the biggest story of the year is kind of the ending of Operation Choke Point 2.0 under the Trump administration.

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Bitcoin miners, uh, trying to front-run the, the Trump tariffs by chartering jets to bring in their mining rigs before the tariffs hit.

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The Immigration and Customs Enforcement Agency, or ICE, conducted a raid on a Bitcoin mine in Texas. Helicopters, snipers, all the guns.

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The, the Bitcoin treasury narrative, it, it was explosive at the beginning of the year. Womp, womp, womp. A lot of these stocks surged in the middle of the year, and since they've been absolutely decimated.

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Most of these stocks are down year to date. These companies raised billions of dollars to plow into Bitcoin, and what do we have to show for it? Cool shirts. Cool shirts? Uh, easily the cool- I... Yeah. Top ten merch.

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Yeah. Top ten merch. From ICE raiding a Bitcoin mine to Operation Choke Point 2.0, there were a bunch of fantastic stories and news in Bitcoin this year.

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We are counting down our favorites and the best stories of the year. Stay tuned, 'cause we have a fun show planned for you. [upbeat music] We have a special episode. We have all three of the Blockspace boys on today.

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Welcome back. You've got Charlie, you've got Colin, and we have Will Oxley on the horn. Special guest. Yeah, special guest. It's been four weeks. Friend of, friend of the show. Friend of the show, Will Oxley.

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[laughs] We do a lot of primary reporting. We summarize stuff that happened, and we broke a number of stories this year. We are going to count down our favorite stories of the year and the best stories of the year.

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We've each, Colin, Charlie, and Will, have each chosen our best story and our favorite story of the year and, uh, we're gonna kick it off with Will. Yes. Will, you have a best story of the year. What did you choose?

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Yeah. I chose this ICE raiding a Bitcoin mine. You know, I'm thinking about the last year, and for the reason we're doing the podcast, overarching someone sees it and they're like, "Okay.

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What, what's actually happened this last year is interesting." But we're also doing, like, a little more in-depth what's been interesting to us at Blockspace.

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We are in the news of news, like, we are in the, in the business of covering the day in and day out, uh, and so I think some stories are boring and interesting, uh, boring to us that are interesting to other people, and interesting to us are boring to other people.

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I think this one is right smack dab in the, like, the perfect spot for everyone because it encapsulates not only Bitcoin, but also geopolitics, national government concerns, uh, the seedy underbelly of an industry, which everyone loves that, right?

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Like, you can almost get, like, those true crime people to kinda walk in the door. Uh, so thanks for pulling this up. Yeah, ICE raids Bitcoin mine in Pyote, Texas.

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So this story, Colin and I worked on it, uh, back in September, published this on the29th, so not too long ago.

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The gist of it is that the Immigration and Customs Enforcement Agency, or ICE, conducted a raid on a Bitcoin mine in Texas, the Lone Star Dream Bitcoin mine. It's about 30 megawatts.

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At the Bitcoin mine, there was a lot of different entities working there. A confirmed at least two

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non-affiliated Bitcoin mining companies were on-site for various reasons, and then most importantly for this story, a Bitmain-affiliated, uh, tech repair shop called AW- ADW was on-site, and they worked out of the site to repair units and became sort of a central hub in the area for people to send Bitcoin mining units to get repaired.

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Uh, for people who don't really understand how, like, the Bitmain affiliate system works or might not even know what Bitmain is, Bitmain's the largest Bitcoin mining manufacturer.

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It's about80% of the market throughout the world, and then here specifically in North America, they have a bunch of different affiliate companies that sign license agreements with Bitmain in order to fix broken units.

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Between, like, 2 and 5% of all units have to go through, like, repairs at a certain point, and, you know, these sites get to, you know, hundreds of thousands of machines at s- at some level.

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Uh, most sites at least have a few hundred machines. That means you're gonna need to, like, fix a lot of these things, right?

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There's a pretty, uh, sizable amount that need to go through the R&D or the fix process, I should say. This is one of those locations. Word got out, we still do not know how, that

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certain Chinese nationals were working on-site without the requisite visas, or they were overstaying their visas, or they didn't have green cards.

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And so ICE descended on the site along with the FBI, HSA, uh, Texas Department of Public Safety, and the US Customs and Border Protection Agency, USCBP, which we'll have a story about in a little bit from Colin.

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They had a bunch of cars, you know, the SUVs you'd see on, like, Law & Order, helicopters, snipers, all the guns, and you're like, "Dang, this is quite the story out of a movie."

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Just like a bunch of people showing up with, to a Bitcoin mine with a bunch of guns, hauling off a bunch of Chinese nationals in what I understood to be a school bus for processing down in El Paso. We contacted El Paso.

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They did not give us comment, um, and we didn't really hear anything afterwards about what happened to these Chinese nationals. I'm assuming that they were expelled from the country.

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Uh, and then we contacted a lot of the other repair shops to see if they had been contacted by ICE. We only heard of one shop, the one in Oklahoma, that was aware of the concerns.

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All the other ones denied having heard anything or being investigated. Of course, it's really tough to know if people are just denying things because it's in their interest to deny it, or if maybe they were not targets.

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I'll throw the story over to you guys. Maybe Colin, your, your first take on this, since you helped, uh... Well, you wrote the story, and then I was obviously helping on reporting for it, but any takeaways from it? Yeah.

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So it's always been an open secretIn the industry that some of these repair facilities are using, how, how should we say, under the board labor.

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[chuckles] And I spoke to one of my buddies at a, a pretty major, uh, a major mining company, and he m- he talked about going to one of these repair shops, and he described just absolutely horrific conditions in terms of the hours that they're expected to work, the wages that they are paid, and just the overall kind of hygiene and, uh, ventilation and all that stuff that goes into working in a factory setting.

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So when I saw this story, that's kind of the first thing that popped into my head, and I think that it's one of the things that's really missing from the entire national conversation about immigration enforcement.

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Fact of the matter is, if you're coming over here without documentation and your employer helped secure your passage or, or other, you know, or something like that, th-there are companies that are gonna take advantage of that.

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Um, and the fact of the matter is these workers don't have workers' rights, and as I understand from this story, their visas were basically held from them.

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Um, they're more or less, uh, indentured servants to the company hiring them.

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And, and that kind of opens up a wider conversation about, you know, we should probably be looking at some of these employers, uh, nationally, not just outside of Bitcoin mining when we're talking about immigration enforcement.

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So that, that was really the biggest takeaway for me on this. And it--

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As you'll see through the other stories that we picked for our favorites and best of for this year, it was the intersection of mining and politics a lot and, and policy.

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And the Trump administration marked a sea change in many, many of the, how should we say, overreaching policies that we saw from the Biden administration.

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But, but we also saw it inter- the mining, uh, industry interact with some of Trump's more stringent immigration policies.

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So when you kinda zoom out, you get a picture where the Trump administration and the new Congress has been much more minimal towards crypto and Bitcoin, but that doesn't mean that they can just do whatever they want, as we saw with this, uh, with this story.

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One other thing I wanna throw in there. The income from these workers ostensibly was not even in dollars. It was just going to bank accounts back in China, and I think that was a big problem here.

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I don't even know if we reported on this aspect of it at the time because it's kinda hard to nail down these details.

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But allegedly, according to some sources I talked to at the time, a lot of these Chinese nationals, they come over under an agreement with Bitmain.

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They often skip on a visa tour, uh, uh, a tourist visa, and stay longer than they should, and then rotate sites to stay in the country, and then they get money wired directly into their Chinese bank account.

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So then they, they're not paying taxes on top of these, these things. I saw that in one of the LinkedIn comments around this, actually, when we posted the story.

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Someone completely unrelated to Bitcoin mining, uh, was actually working in oil and gas, mentioned how that was sort of like a reoccurring pattern, where Chinese nationals would show up, they'd live in RVs, and they wouldn't pay taxes to the area, and then they would kind of bounce to a new location once they knew that, like, they were getting scoped out a little bit.

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Uh, and it really brings more urgency and tension to the conversation around Bitmain. You know, it's spinning off some of its different arms, like Kanggo kinda spun off with it purchasing some hash rate from Bitmain.

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Uh, you have the AntAlpha group, things like that. So do these stories, like, look favorable in terms of Bitmain? I'd say certainly not. They're not a good look.

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But it seems like they're still willing to fly very close to the sun in, in order to continue getting the business going. Charlie, any thoughts?

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This was a breakout story, um, 'cause if we look at who viewed this story that we produced, we made a podcast about it, and we also, uh, had our, uh, primary reporting on it on our site.

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Uh, this story had a lot of reach outside our normal audience, which is, like, namely, like, Bitcoin native industry folks.

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This was a crossover story, and I think that's kind of a theme for all the best ofs that we chose. Um, I wanna get on to Will. That was your best story of the year. What was your favorite, though? Yes.

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Favorite one, probably pretty familiar to Mining Pod listeners. The colocation deals were just really interesting this year, so I had a few thoughts on it, and I don't think there's one I'd specifically wanna call out.

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I think all of them were interesting in their own capacity. Uh, even the smaller ones, like Hive had a smaller one in Canada.

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They're working with essentially the Canadian government to run a small HPC site, uh, in downtown Toronto, and that might be one of the least interesting ones, but it does have, like, bigger implications for how Bitcoin miners have been able to spin out of sort of like a, a death loop they were hitting, where it was mine Bitcoin as cheap as possible, but the market's always competing against you.

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Difficulty is just rising so dramatically. Becoming harder and harder to be a, a Bitcoin miner. Just look at hash price.

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It's continuously going down, and there hasn't been much of a shift, even with Bitcoin price, you know, going downwards the latter half of the year, or at least since October.

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Bitcoin miners have been successful in pivoting to another market. Uh, last cycle, before all the big news with, you know, of course, Hypivic kinda kicked it off, but all the other ones.

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The phrase that we used in Bitcoin mining quite a bit was, "The longest group in Bitcoin is Bitcoin miners," because they have staked huge energy con- huge energy contracts, infrastructure, units, et cetera, on the ground in order to mine Bitcoin at a cheaper price than it is in the future.

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They are effectively long Bitcoin with every single thing they purchase. But

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HPC, AI came along, and now there is a second bidder, and in this case, even a better bidder than the Bitcoin mining network, essentially de-risking a lot of the stack, uh, for the future.

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And I think that trade was just notable and really a breakout play, not only in twenty twenty-five, uh, twenty twenty-four obviously is when it kicked off and even slightly prior to that.

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But really this last year with the amount of deals, Cipher, Iren, Wolf-Hut, uh, Core Scientific, Hive, like I said, CleanSpark has some deals going. Mara is finally getting in on it. Riot was begin-beginning to pivot.

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And I think we're gonna see this kinda eat down the stack to some of those smaller levels, where even teams like the Cathedra Bitcoins out there are gonna start building custom infrastructure for smaller clusters.

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If you believe in not only the training model level, where you need to have the l- really large sites, but the inference level, where you can have smaller deployments,

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uh, just kinda like Mara and a few others are kind of thinking about that, then you could really see a, a play where all these Bitcoin miners are able to succeed despite, like, megawatt limitations.

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So that is, like, the biggest story, I guess, f-for me. Like, my favorite, uh, is just the fact that, that, that popped up. Colin? Yeah.

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And indisputably the biggest story, I think, for the entire sector this year, right? I mean, we started the year talking about Bitcoin mining, and we finished the year talking about AI and HPC every single week.

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And as you mentioned, Core Scientific validated a thesis with the CoreWeave contract last year, and the rest of the sector took it and ran with it.

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And so far, Core Scientific still has a really good contract with CoreWeave, but some of these miners are coming out with insane contracts that really, I think, up the ante for what investors are going to expect from these kind of expansions.

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Hut8 comes to mind. Its potential for seventeen point seven billion in contracted revenue, [lip smacks] uh, across over two gigawatts of infrastructure.

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Some of that infrastructure hasn't been built yet, so let's not get ahead of ourselves. But the fact of the matter is, that's how much money these, these neo clouds and these AI companies are willing to put down on this.

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Revenue backstop by Google. Now, that's following the TeraWulf and Cipher model. They were the first to pioneer that with Fluid Stack.

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[lip smacks] And I believe TeraWulf was the one who pion- kind of pioneered that, and Cipher did, oh, a deal similarly concurrently with them.

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And you saw with each new deal a little more sophistication with how the Bitcoin miner was interacting with their tenant and their partners.

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You know, at first, Core Scientific had this amazing deal with CoreWeave, where CoreWeave was gonna bankroll the majority of the AI development or the, uh, build-out for the AI data centers.

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And people thought, "Well, how are you gonna match that?"

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And then you have these other contracts where now Google's stepping in to guarantee revenue, and those companies can go out and secure financing with that revenue as a guarantee against that financing.

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So yeah, I think undoubtedly this is the biggest story of the year, and I think the big story of next year will be how many of these trees actually grow and produce fruit, and how many of them will wither away.

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You know, we've already seen some delays with, uh, Core Scientific's Denton facility. I'm sure if we dug in, we would find delays across some other sites with these Bitcoin miners. These data centers are massive.

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They're huge expenditures on both capital, man-hours, and labor. And so I think it would be foolish not-- It would be foolish to expect that there's gonna be no problems.

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But come twenty twenty-six and twenty twenty-seven, we'll get a clear view of which Bitcoin miners have pulled off this expansion better than others. So something to look out for in the new year. Uh, one last thought.

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Matt Siegel had a nice tweet this morning. He just put, "Cipher, twenty-five exahash, six billion dollar market cap. Hive, twenty-five exahash, six hundred fifty million dollar market cap."

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And so that's what the, the multiple everyone's chasing is, is looking like in one market cap. Now, cheers to the Hive team.

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They deployed twenty-plus exahash in one year, which is absolutely insane in terms of just getting it done, and they're also aggressively pursuing a lot of HPC deals.

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Tend to be on the smaller side versus some of the others, but you can just see the premium there for signing one of these large deals, and that's why the whole space is pivoting over, so. Yeah.

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So I think the biggest story, and this is not original reporting by Blockspace. This has been passed around from a number of outlets, both crypto and mainstream.

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But I think, to me, the biggest story of the year is kind of the ending of Operation Choke Point 2.0 under the Trump administration. And we've talked about this a lot on Bitcoin Season two, mostly in Writers' Room.

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But it's hard, I think, to overstate how much of an existential threat this operation was by the Biden administration and its related agencies. So quick recap.

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Operation Choke Point 2.0 was a unspoken mandate within the Biden administration to debank crypto companies, [lip smacks]

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and more or less, it led to the closure of Signature, Silvergate, and Silicon Valley Banks, those bank failures, [sniffs] um, over twenty twenty-two. So-- Or I believe, uh, sorry, twenty twenty-three. Excuse me.

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So the Trump administration basically did away with this entirely as far as we can tell, and Trump made that a platform of his speech at Bitcoin twenty twenty-four.

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He said he was going to end Operation Choke Point 2.0 and fire Gary Gensler day one. [laughs] And of course, Gary Gensler, the head of the SEC under Biden, resigned before Trump could give him the chance.

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But if you look at Operation Choke Point 2.0, and if you're curious about the kind of agency-by-agency mandates that were taken and the actions that were taken, I recommend you go to this article that we published a few weeks ago on Blockspace.

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I kind of break down, uh, you know, the timeline for Operation Choke Point 2.0 on an agency-by-agency basis [lip smacks] and talk about some of the major actions.

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The SEC figured very prominently, and the US House Committee on Financial Services really kind of breaks down how many things the SEC did to try to frustrate any sort of advancement of the crypto industry in the US, and also engaged in what's called, uh, you know, guidance by enforcement, where you're not really giving clear guidance on what you wanna see from crypto companies to keep them out of the scope of regulat-- or, or to keep them out of the crosshairs of regulators, but you're just kind of willy-nillyYou know, subpoenaing some or opening investigations into others to basically force your guidance through, uh, you know, what seems like arbitrary enforcement.

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But all that being said, you know, kind of just as a recap, and go check out the, uh, article for a more detailed breakdown again of, like, the agencies involved.

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The FDIC was involved, the OCC, Biden White House through executive action.

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There was a clear coordinated effort by Biden's administration to try to close banking lines to not just, you know, crypto companies, but crypto founders.

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I personally know, as most people probably listening to this, I know people who were debanked, and I know companies that had to scramble to find new banking relationships as, as all of this was going on to make sure that they can make payroll.

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It's really, really hard to emphasize how many companies were touched by this, and it makes me want to go so far as to say that if we had had Kamala elected and basically Biden presidency two point O, we might be looking at a completely different industry at this point.

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I mean, you might be looking at mass consolidation and a destruction of banking relationships that could have destroyed startups in, in the crypto and Bitcoin industry.

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And maybe that's hyperbolic, but given the, the, you know, arc of events over just the few years that Biden was in office, I don't think that it is.

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So to me, definitely the biggest story, hopefully behind us and some tie-ins to, uh, the next one that I'm gonna do too, in terms of, you know, the backwash of Biden's, uh, you know, of, of Biden era mandates, but I'll throw it to you all for second takes.

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Yeah. Uh, one of the things that our industry struggles with is we're naturally critical of the state, and we also have a huge penchant for conspiracy.

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So it gets difficult to identify when there actually are conspiracies or coordinated attempts. And so this is one which was a breakout story.

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I think our industry was able to sufficiently differentiate it from the, like, embedded conspiracy that we tend to run with. But this was a real story, existential, and it's also really hard to cover.

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I don't know of an article or, like, a write-up on this that wasn't, like, fewer than a thousand words, um, because it's long, it's, uh, got a lot of abbreviations and, and mired in, like, you know, bureaucracy and stuff.

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And it was, uh, something that also was revealed over the past year.

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Like, when Nick Carter, who was the first person to really cover it in depth and break it, really, whenever he put it out, there was a lot of uncertainty.

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And over the years, we've kind of gotten a drip of, "Oh, here's confirmation. You know, we had a suspicion. Here's the confirmation of it."

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And that allowed at least, you know, us to revisit it a few times, but also other media and other journalists to cover it and for our industry to really kind of, like, understand that this was a pervasive, uh, debanking, shadow debanking, uh, event.

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And sorry, Will, before you hop in, a quick note on Nick's coverage. I think I've mentioned this before on Writer's Room. You know, Nick, Nick Carter is not a journalist, right?

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He's a VC, and he works on the inside of things.

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He published it for Pirate Wires, and I think that discredited him to a lot of the mainstream media, who probably weren't going to cover it anyway because Pirate Wires was publishing it. You know, it's alt media.

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It's, it's, you know, Peter Thiel's swamp monster media to a lot of people, right? And so-- but it took an insider to tell this story because of what Charlie was saying.

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The web of events and the cascading effects and the connections here are so crazy that you'd really need to be close to the decision-makers at a lot of these companies in Bitcoin and crypto and the bankers who are involved in this to really understand what happened.

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And so Nick was really well-positioned to tell this story. He's a great writer and good communicator. He also knows the plumbing of this industry extremely well.

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But at the same time, that really kind of worked against, I think, the crypto industry, especially in the Biden administration, because no one was looking at a VC who works in crypto and saying, "That's reliable sourcing for this.

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He doesn't have a stake," right? Like, there's a clear conflict of interest, but that didn't change the fact that what he was reporting on was demonstrably true, right? So.

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Uh, the last thing I'll add on to, I think you guys covered it well, is just the flip into the Trump brothers jumping into the industry, and you [chuckles] gotta take that too, right?

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Like, yeah, we swept out Biden and the goons, and we got a different, uh, cast of characters in the door. Uh, and but it's been nothing but colorful with them as well, right? Nothing but colorful.

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We covered the American Bitcoin, uh, pipe deal that unlocked around December first, and, you know, Trump brothers were very involved in that one.

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And I think that a lot of people were on the wrong side of that deal, uh, because I, I personally don't think it was disclosed as well as it could have been. I think the American Bitcoin team would disagree.

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But, you know, this is the kind of thing that you get when politics and a speculative industry collide, very much like the early railroad industry, or very much like any other sort of emerging industry where, uh, government has to be involved on some level or can be involved on some level.

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Obviously, the Trump brothers are not involved in the government. They don't have official government, uh, jobs of any sort. They're in the free market, and they're very much gonna make that known. However,

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they're still tied to the current Trump administration through their dad, so. [chuckles] Lest we just try to pump up the Trump administration, I mean, that's been one of the more disappointing aspects of his embrace.

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Just to keep the scorecard, the Trump and Melania coin upon [laughs] upon inauguration was crazy. Uh, World Liberty Fy, a DeFi platform for suckers? What's the point of that?

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American Bitcoin, I mean, clearly the Trump administra-- or the Trump family recognized an opportunity, and they have, they have do-- they've dived right into it, right?

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And so you're blurring the lines a little bit between what you would consider ethical, obviously, with that. But, you know-The pro-Trump presidency comes with his own baggage, I'll just say that.

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It does seem like American Bitcoin is chugging along. I think their pipe deal, like many pipe deals this year, led to a foregone conclusion of max pain for retail.

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But it does seem like American Bitcoin is kind of chugging along and, you know, mining Bitcoin, increasing Bitcoin under production, and that's what they said they're gonna do.

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So I will throw that for their team in general. But let's go to the next story. Yeah, next story, Colin, your, uh, favorite story of the year. Yeah.

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So my favorite story of the year was some original reporting that landed us our first mainstream media backlink in Reuters. Love to see it. Sorry, little- That's cool...

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pat on the back, Obama giving himself a medal meme.jpeg.

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[laughs] Um, but this was our original reporting on the US Customs and Border Protection first holding and then seizing Bitcoin miners at points of entry across the US. So a few notes on this just to recap.

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The CBP was holding specifically Antminer units because allegedly, they were worried about a chip from Huawei, which is sanctioned, ending up in the control boards of these machines.

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The control board is what actually controls the machine versus the hash board, which is what produces the hash rate.

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The biggest question with this, and then I'll get into how this all went down, was this a holdout from the Biden administration? Was this the Trump administration?

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Was this just, you know, disgruntled employees or people who thought they were doing the right thing? I think it's important to remember that these agencies are huge.

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The bureaucracy in DC is massive, and not everyone is acting on mandates from a president, right? They're acting on mandates from their bosses or, or internally, right?

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So it's really not totally clear why this was happening outside of the stated reason of looking for those chips, as I understand the chance of, of those chips ending up in some of those, uh, ASICs is pretty small.

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But they kind of just part and parcel started seizing units that wouldn't even have that chip to begin with, and that's when we started kind of asking some of these questions like, what's the actual point here?

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But to recap what ended up happening, the CBP started holding Bitcoin miners, I believe at the end of last year and then into this year.

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And then they ended up seizing some of these and actually taking control of them and, and, uh, you know, requisitioning them from the miners who were importing them.

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Some miners and some brokers had to pay massive fines as they, uh, had holding fees for these, and I believe maybe there's even still some li-litigation ongoing about that.

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I, I haven't checked in with any of our, our sources on whether or not that's been settled.

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But the fact of the matter is, it seemed for a while there like there was just no recourse here, and it didn't make any sense to these Bitcoin miners who were doing everything by the book, by the way. These weren't...

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They weren't trying to just smuggle these in, right?

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They were actually taking, you know, the proper steps, disclosing the hardware and trying to import these legally, and they were just totally, you know, kind of pa- They, they weren't given any kind of consideration by the CBP.

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So eventually, this was reversed. The holds and the seizures were, uh, were cleared, and then the miners and some of the brokers got their hardware. But kind of like cold comfort for some of these companies, right?

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They, some of them are miners who were trying to get hash rate online. They missed an opportunity to get it on before maybe difficulty raised and, and, and hash price dropped.

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And also for the brokers, they lost out on business, and they had to, you know, maybe renege on some contracts because that would've been contracted hash rate, some of it at least.

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So it, it was a huge headache for a number of operators in the space. And again, going back to Choke Point 2.0, I'm just really curious about what the mandate was here and, and what the whole point was.

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'Cause another thing I wanna add into this is we talked about a

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thing apparently called Operation Red Sunset on the Mining Pot a while back, and we had a source reach out to us saying that people in the, uh, Department of Justice or Homeland Security had no idea what this was.

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They had never heard of it. And it came from a Bloomberg article that, you know, my source was intimating was basically a hit piece on the Trump family's involvement in Bitcoin and Bitcoin mining.

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Take that for what it's worth. You can go look up the Bloomberg article and judge for yourself.

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But Operation Red Sunset was apparently an investigation into Bitmain and whether or not Bitmain mining machines are collecting data, you know, or, uh...

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I, I don't even really know what the whole f-fear-mongering thing is outside of like they think the machines are collecting data and relaying it to, uh, to the CCP on, you know, strategic, uh, on the grid in the US and even air bases and stuff.

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This is FUD that's existed for a while. I remember The New York Times writing about this, I believe, a year or two ago.

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My father-in-law sent it to me, and I told him, "You know, I actually am amazed that they printed that because it's laughable."

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Because they were saying that Bitmain could coordinate brownouts of the US grid based on their capacity, and I told my father-in-law, I was like, "This is just a joke for journalism."

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And he's like, "Well, you should email them that." And I wa- and [chuckles] I couldn't, I couldn't break it to him. It's like, you don't understand. This is just regime propaganda. They don't care what I have to say. So

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I, I, I just, I bring that in here because all of this is just weird, and there is this, you know, fear of Bitmain and what it might be doing in the US to undermine the grid and undermine national security.

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I want to be clear, we know that Chinese government officials and, and Chinese nationals who embed themselves in the US in bus- in the business or public sector capacity, they do spy for China.

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Like, that's for sure happening. But a lot of the fears that have been levied against Bitmain and its operations in the US vis-a-vis grid stability, vis-a-vis exporting sensitive dataDon't make sense.

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And, a-and so we should be skeptical, obviously, always of, of the opportunity for vulnerabilities, uh, that are introduced by, you know, Chinese nationals operating in the US.

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But to just scapegoat them or just assume that there's bad things happening based on a government mandate that doesn't even apparently exist according to this administration is, is, is circumspect.

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So that, that kind of wraps that up, though to you all for second takes. Well,

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I think the tinfoil hat theory for this is one Bitmain in certain locations could secretly, through a third, like a backdoor, turn off a bunch of machines, hurt the frequency of a grid if you turn off all these units at the same point.

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That's what I've heard from a lot of people who do subscribe to this theory and are worried about it, including some Bitcoin mining companies or Bitcoin miners out there that are concerned about this.

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Now, there's no proven backdoor, and a l-- the software is torn down every single day by so many companies that are trying to make money off of running third-party services on it.

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So they have an incentive to find every single backdoor that exists, and so far none has been found. The only historic backdoor people have found is AMP Bleed from like twenty-seventeen. That was well documented.

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It was caught, it was found. Doesn't matter anymore. Very old story, and had more to do with gaming hash rate and being against competitors than it did really with anything else.

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The national security concerns, I think, like, sure, the-- it's good to have those concerns, and perhaps it's prudent not to have, uh, Chinese-owned companies near, you know, m- US missile silos or US military databases or key internet or energy infrastructure.

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Like, that's probably just a good base rule regardless. Uh, but some of this stuff does become kind of tinfoil, and the inquiries and inquisitions by government officials are just that.

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There-there's not a lot of factor basis around them. I, I think, though, Bitmain doesn't do itself any favors by affiliating with companies like ADW that are, you know, skirting immigration rules pretty blatantly.

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Uh, they shouldn't be doing that. They certainly have the cash to do more.

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The-- I haven't heard a number for Bitmain's market cap, like private value, in quite a while, but my understanding is it's into the tens of billions of dollars, so I think they can, you know, figure out how to pony up for some, uh, actual visas for their employees.

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Charlie? Yeah. That story, the fear of Bitmain, uh, attacking the grid, I'm like, "Bro, I've read some books. I listened to last week's NPR story. Like, it's way easier to destroy the grid."

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But I won't go into that because this video will get taken down. Just make the grid dependent on sol-on solar- Yeah. -and, uh, and, and wind power. Yeah. That's how you destroy the grid. Yeah.

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Maybe the- Where's the pole? -reliance on inconsistent variable renewable fuels is a little more existential to the grid. Right. Anyway, okay, so now it's my turn. Saving the best for last. Um- Big stories. Yeah.

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So, uh, my favorite story, I actually don't know which of you wrote this. Maybe it was both of you. It was the, uh, story about Bitcoin miners yet again, Bitcoin miners and reacting to Trump.

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Bitcoin miners, uh, trying to front-run the Bic- the, the Trump tariffs by chartering jets to bring in their mining rigs before the tariffs hit. I don't remember which of you.

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It's-- Will is-- Will's name is on this, but I think you both probably had a hand in this. But the story is... So if you remember back in the before times, so long ago, last spring,

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Trump tariffs are scheduled to hit April ninth ballpark. So you got goods landing after that date, you are subject to a very c-significant, uh, uh, tariff rate.

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And so these Bitcoin miners who have these machines overseas, uh, need to get them to the United States, and they're often shipped in on slower, uh, you know, cargo ships, and they're not as urgently delivered.

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You know, the, the, the lead time can be weeks. Um, so

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given that there's uncertainty around the tariffs, um, a lot of miners decided to front-run those, pull forward these deliveries, and because everybody and their dog, because it wasn't just Bitcoin miners, it was all, you know, international industry and shipping.

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Bitcoin miners, uh, chartered, uh, flights at multiples over the current rate for chartering the flights. We're talking two to three and a half million dollars per flight,

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um, to fill them with these mining rigs and fly them to the US to get landed before the possible Trump tariff cough rate.

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The m-- basically, the numbers are, in twenty-twenty-four, we estimate that two point three three billion dollars worth of mining rigs came to the US.

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And in just Q1 alone of twenty-twenty-five, we had six hundred eight-- rather eight hundred and sixty million dollars of miners come to the United States as s-miners scrambled.

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I like this story a lot because this, um, this again, it was, like a fun... It's kind of a fun visualization to imagine, like, chartering flights.

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The Trump tariffs were, like, all the only story anybody talked about during those two months. And we also leaned on a couple of our, uh, sources, uh, Taras Kulic and Ethan Vera of Syntek and, uh, Luxur.

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And so it kind of, like, showcased us being able to craft a story, tell how, how it impacted the market.

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And it, um, I just think this, like, really hit on what the first half of the year's meta-narrative was, which was tariff turmoil.

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And this is, like, the story that I think, you know, when we li- when we think back and we think back, like, about the hash rate migrations of the Chinese wet season-And, you know, there's that famous picture of that Chinese, that, like, farmer who's got those ASICs on, those mining rigs on his back about to hike across, you know, h- the hillside.

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I think about this as kind of a similar vignette, a moment, a snapshot in the industry as it scrambles to deal with the physical relocation of mining rigs. A story that will certainly repeat itself in theme for

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years to come. So I, I really like this particular story. Do you guys have comments? I mean, uh, this was a really interesting, you know, angle and story to cover for you guys.

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I think this is a great example of just some of the wacky inside reporting you can do if you're just close enough to people in the industry.

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You know, th- this is a story, and there are thousands more like it, that probably go under the radar all the time just because there's no one around to tell it. But it really,

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you know, highlights how the changes in an administration can just cause a huge headache, and the policy changes cause a huge headache for, you know, the same industry that we were just saying this administration was a boon for, right?

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So I think this also highlights that the Trump administration has been good for Bitcoin mining in some ways and, and bad for it in others, just at least in terms of the cost that the tariffs are imposing on importing hardware.

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The other thing, too, about this, we reported on this today at Blockspace, th- this, you know, really pushed ASIC manufacturers to think about what they're going to do in terms of pr- uh, domestic ASIC production.

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And it pushed many of them to, uh, to try to reshore onto the US, or I should say shore, uh, shore onto the US because none of them were here in the first place.

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But we just published this this morning, Bitdeer leases a Nevada factory for US ASIC miner manufacturing for their Seal Miner series. That's the latest news bit we got from this.

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We, we have not written on it because we haven't gotten any, uh, hard confirmation, or we didn't get any hard confirmation at the time. Bitmain's also opened facilities in the US.

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What's Miner's had one here for a couple of years. I'm sure they're ramping up efforts.

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But the secondary effects of the tariffs were that actually, yeah, it did bring back certain manufacturing to the US for this sector specifically, so that's, that's kind of my second take on it.

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Yeah, I don't have much more. Uh, we're doing so many mining stories. I was s- I'm surprised that you picked a mining story, Charlie. I'm sorry. I just really liked it.

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Also, I didn't wanna, like, just glaze myself the whole time 'cause my favorite story, um- What's your favorite story? This is so fun... my favorite story is a non-mining story.

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My favorite story, um, again, it's one that I wrote, and I kinda wanna get... I wanna, I wanna get credit for this one.

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So if you remember last summer, I think it was July, um, some, you know, on-chain analyst said, "Wow, one of the, the oldest, biggest wallets have moved $8 billion worth of Bitcoin." And it sent everyone into a tizzy.

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Now, it's just part and parcel to get OG wallet wakes up and moves some Bitcoin. That happens all the time.

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The difference is, is that this was, like, the biggest and the oldest, and, um, it kicked off a whole narrative of OG wallets, OG Bitcoin are finally selling at 100K.

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But what I got is I got a lot of people, like normal people, normies, I would say, hitting me up about this story because it, when it came out, very little was known. There was a lot of conspiracy about it.

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And so while I did not write as much, uh, at the time, um, about, like, what we know, I wrote kind of an op-ed or an editorial about my initial takes and what I thought it probably was.

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Um, and if you were... A l- a lot of people thought it was seized. A lot of people thought it was, like, lost property. There was this whole legal dimension potentially to it.

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Um, we, Colin and I covered this in a previous episode of this podcast. Go listen to it. But basically, I, uh, I said it could be, you know, some people think this thing is app, asset forfeiture.

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Some people think it's government seizure. Um, some people think that it could be Mt. Gox distributing or even Satoshi moving their coins. I said, "I don't think it's any of those."

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Occam's razor, uh, this is an OG wallet, Bitcoin whale finally moving coins, and I bet you that they're selling. So over the months after that, it kinda, it came out that that is in fact what was happening.

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This is an OG Bitcoin whale. Congrats to them. Huge flex. Billions of dollars in their pocket. Moved it to Galaxy Digital, who, uh, sold and liquidated all that in a, I, I guess, elegant- Pretty skillfully, too.

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Yeah, very skillfully. And they published a whole, like, thing on-chain about, you know, how we did this deal. It was really cool.

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There were a bunch of fun angles you could attack of this story, and it created a whole narrative that really defined this year, which is OG wallets. OGs finally selling.

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And I do wanna kinda come back to this 'cause, like, um, we...

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You know, when we're in the business of covering the new news, um, when we put out stories, especially when there's very little known, um, there is a huge, like, gut check that we have to do.

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And a lot of what we do is lean upon experience and high, uh, being able to filter, uh, speculation from fact.

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And this is one of those where I really think that, uh, we were able to accurately convey appropriate expectations and, uh, give the reader, like, here's what probably is.

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Here- And then we followed up on it as that was confirmed. So I just really like that. This is my favorite.

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It's one, it's a fun story to talk about, and it's a fun one to talk about over, you know, to normies over dinner. It's like, I can tell my mom and dad, like, "Yeah, this person- [laughs]...

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billions of thousands of Bitcoin." Yeah. Billions of dollars. Yeah. This was a crazy story. The, uh, I don't know if... Did the Bitcoin price peak-Around this time, there was- Around, yeah...

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it was certainly over one ten, uh, at the time. This was in the teens. It was like in the hundred tens, thousands, and it kinda caused it to drop a bit. Was it this whale selling, or was it, you know, the market? Yeah.

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Yeah. This was during the liberation day recovery period, right? Yeah. So Bitcoin crumbled in April down to, like, seventy, and then it rallied back up above a hundred.

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So it's a great story in terms of, like, a bull m- market psychology story because it's the picto top for liquidation for an account of this size. You're never gonna sell it, what was it, one twenty-six.

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You have a good chance of buying the top, but you don't have a chance of selling the top, especially when you're at a bag size of this quantity.

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It was also cool just to see, like, how Galaxy put out this information and talked about, like, the on-chain aspects of it, how they're able to come to an agreement.

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Just think of, like, the wire going to your bank account for billions of dollars, and then the Bitcoin moving over to that, the new account. And however they ended up settling that, I don't know if they went through

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another exchange that was willing to help them out with it, whatnot. Uh, I think some of the, a lot of the details they kept purposely, uh, you know, hidden. Yeah.

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But I think on a high level, it's cool that the market has become so liquid, and that there's enough counterparties who are obviously very willing to help you out with something like this.

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And in the future, you know, if Bitcoin does continue to ascend, transactions like this will look normal. They won't look so large. Just like back in the day, we used to have simil-- like very smaller transactions that

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were notable at the time, but now they look tiny. Colin? I don't have a- anything. I think y'all covered it. But I have to say, before we... Oh, no, you have one more favorite here, Charlie.

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Do you, do you wanna go ahead and share that one? Oh, I had a runner-up just 'cause, you know, I thought it was really cool. One of my favorite goofy ones is, uh, the puppet race car. It was a very un...

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It was a story that got big in the Ordinals community, but basically an Ordinals project, the Bitcoin Puppets, uh, chartered one of these speed cars and a race car, uh, and branded it with their NFT, the Bitcoin Puppets.

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It was a really fun, like, niche story. I was the only person to cover it and, uh, in like, any kind of media capacity, and it was just really, really cool and fun. Um, yeah. So I thought this was really cool.

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It-- I would love to go into detail about, like, all of the things because that, you know, it's didn't, they didn't just charter a car. The driver of the car was also a character.

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The, um, owner of the car, like, arguably embezzled money, and there was a whole drama around, like, uh, you know, the money and the execution and this, and, you know, the, and the sobriety of, of the various individuals involved.

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It was a, a super wild story, and, uh, I will look back on that if, you know, a-as like, oh, this is one of the m-most fun color pieces I've ever done. Well, I think we should cover this in the hashes of some sort. Yeah.

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It seems like we can make up a category for best- [laughs] Wild card. The wild card... wild card chasing story.

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If we're gonna make up categories, then I think [laughs] I think we should cover that one in more detail, 'cause that's, that's also a standout story for me from this year, is just, like, how crazy and fun that story was, and that's only a story, like, Blockspace was gonna report on.

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You're the only people who are ever gonna do that. Yeah. Only people who are gonna talk about stories like that. So that was a super fun one.

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All right, guys, before, before we go, just a quick flash story for the biggest of the year, which, you know, uh, I quite frankly probably should have led with this.

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Uh, it, we can't ignore it, and that's just the, the Bitcoin Treasury narrative. It, it was explosive at the beginning of the year. Womp, womp, womp.

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A lot of these stocks surged in the middle of the year, and since they've been absolutely decimated.

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It turns out that when you have a Bitcoin ETF, a highly levered Bitcoin wrapper is not the most exciting thing to people anymore, and if anyone's gonna go for it, they're probably gonna go for Strategy because they have a proven track record going back to twenty-twenty.

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Anyway, most of these stocks are down year to date, uh, except for Strive and MetaPlanet. They're both up.

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Most of the other big names are down that I have here, but I think that that's, to me, the biggest s- narrative bust of the year, and probably one of the biggest stories in the sense that these companies raised billions of dollars to plow into Bitcoin, and what do we have to show for it?

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Cool shirts. Cool shirts? Uh- Easily the cool- I- Yeah. Top ten merch. Yeah. Top ten merch. Some new podcast sponsorships. Yeah. You know, throw it to us for twenty twenty-six. Yeah.

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If you need- So- You know, if you need to throw a helmet- We'll stop crapping on you if you sponsor us. Come on, guys. Yeah. Let's go. [laughs] Yeah. This is... Yeah.

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Uh, I will throw out also, Colin, to, to make it worse, if you're looking year to date, that's not always a good metric, because a lot of these teams announce, like, their raise or their closing partway through the year.

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And so you really got to look at when the announcement went out the door, and then versus from there. Maybe, like, the most favorable is, like,

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after the closing of some of the deals and not necessarily after the announcement, 'cause there's that waiting period with SEC often.

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And so it, it can get really bad if you want it to get really bad, or it can look a little less bad if you want to. Overall, though, it's pretty bad for everybody.

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The Gortz Show actually did a really good show on this back in October when all the markets started falling apart for this, detailing how there's only one strategy. There's only one Michael Saylor. And that show,

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only a few weeks before its time, but was prescient in the fact that that's what mainly has occurred, and now all these other DATS are gonna have to find a business model besides selling preferred equity.

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Uh, it's gonna be very, very difficult to do something else. Otherwise, the, the value shares and the flywheel will start to fall apart as everything is sucked into the strategy orbit, in my opinion.

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It really does feel like ICOs. It's wild how the whole thing seemed to mirror the various crypto asset, uh, pumps and subsequent collapses. It's, it's ICOs on public markets. [laughs] Yeah. It's crazy. Yeah. Right?

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I mean- Kind of, kind of rules... cheap have always existed, right? People have seen Wolf of Wall Street. This is nothing new,

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but it was supercharged with the cyber hornet-inducing network effects of the nuclear Bitcoin. You know, it's like just fuel to the fire. It was a crazy mania, and

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I hope it's behind us, but Bitcoin could rally to one hundred and fifty k, and a lot of these stocks would absolutely rip, and then we're right back to where we were in the summer, so. Yeah.

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And we'll, we'll take a sponsorship, uh, but you've got to have cool merch. So- Cool merch... you got to have cool merch, 'cause we're not gonna put a dumb logo, uh, on our shirt. Only cool logos. Okay.

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Thank you so much for listening to the Blockspace Podcast. Like and subscribe. Hit that like button. Leave us a review. Find our social medias. I'm @CBSpears. We have @WSFoxley and @AzayLeHoddling. Thank you very much.

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Have a wonderful holiday season. Catch you all next week. [outro music]