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[upbeat music] Welcome back to "The Bitcoin Season 2" weekly live stream.

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This is me, Charlie, under Blockspace Media, doing a Bitcoin Season 2 live stream about midday every Monday.

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This is a metrics-heavy episode, live-streamed video on YouTube and X, um, pulling out a lot of charts, going over a, a lot of metrics, and some news, and some forward-looking, um, indicators.

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This is where I pull out the charts, and we see who's winning, who's losing, what Bitcoin looks like.

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Um, make sure to check out the other Blockspace Media podcasts and content, our newsletter on blockspace.media, as well as "The Gwork Show" and "Mining Pod."

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"The Bitcoin Season 2," uh, podcast does a Monday, which is today, live stream, and a Thursday release of more in-depth interviews.

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So today, we have, uh, always interesting things happening on Bitcoin, and we're gonna talk about the OKX, um, uh, funny little, uh, consolidation issue, and Bitcoin fees are pumping because of that.

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And then also, I think another narrative that I'm gonna inject in here is that BRC-20s may get a little bit of a return. So, without further ado, I'm going to launch into the metrics. Let's start with Bitcoin. So,

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uh, mempool.space, we see the current fee rate on Bitcoin is a little bit higher than it was last week.

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We're in the high 20s, um, but if you look at it, you actually see over here on the right, you know, if you're, if you're listening to this, I'm looking at the mempool.space, uh, chart of the depth of, uh, transactions, uh, on the average mempool.

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We see a huge spike [chuckles] here. This is this past weekend. We'll talk about this. This was OKX, um, kind of tripping over themselves, consolidating UTXOs. What is consolidating UTXOs?

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Well, you have to read our newsletter. I'll also review it here. Um, let's also take a look at Merch's, uh, Dune dashboard. Just what kind of transactions are happening on Bitcoin? Well,

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we see with this chart regular transactions versus BRC-20 versus other types of transactions. Since April 20th, since the halving, the majority of transactions by number have been Runes.

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We're talking 70, 60, sometimes 80% of the transactions by type on Bitcoin are Runes transactions.

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Um, you know, if you watch previous streams, the, uh, the number of Rune, like, the Runes market is kind of up and down, but has been recovering a bit, that we had a bit of a pump last week, and it's pulled back a bit.

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But, um, we saw a bit of return of BRC-20 transactions. Why? Well, we'll get into that. Um, and then the other, uh, chart here that I think is really important is just, um,

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uh, just the regular, uh, just the fees dedicated to all these transactions. So,

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um, again, I pulled up a chart which shows just the fees by transaction type, and fees are down comparatively, you know, since the, the big rush over the last winter and the, the pump over the halving.

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But we have seen a little bit of a fee recovery.

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We're, we're getting anywhere from, uh, 40 to 50 Bitcoin in fees per day across the board, from regular financial transactions to Runes, to BRC-20, to other types of inscriptions.

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Another, um, metric, and I don't see any other, like, Bitcoin podcasts really covering this, is looking at the amount of TVL, total value locked, on what we might call Bitcoin L2s.

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Now, these are, um, you know, the various types of, uh, scaling or Bitcoin abstractions. I won't get into what makes an L2, but I love the bitcoinlayers.org, but let's look at the metrics.

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So we have Bob here from Interlay, um, partnered with Marathon Digital to merge mine this chain. Bob, um, has, uh, you know, is a majority wrapped Bitcoin, um, some deposits on Sovereign and TBTC.

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Um, $300 million TVL, which is pretty significant. That's a lot of economic weight on that chain.

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Um, we see daily deposits going into Bob, uh, have plateaued over the past month, but they've been pretty consistent since the end of March.

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Moving over to Meso from Thesis, we see about $126 million TVL, again into the nine figures. Um, 1,100, uh,

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wrapped Bitcoin equivalent and, uh, 6,600 addresses.

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Um, we see another similar chart with, uh, uh, with Meso here, where we had a large de- uh, entrance of depositors in the, uh, in late March and early April as Thesis promoted the Meso L2, and we've seen a bit of a plateau over the past month of depositors.

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Again, this, you know, I don't believe s- uh, withdrawal is yet available for this L2, but they do promote a yield-bearing, um, mechanism on-chain. Very interesting to watch this.

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And then the other kind of third major, uh-Uh, I'm gonna call it an L2 here again, is Merlin. This is largely in-- uh, popular in Asia with a whopping one point five billion dollars in TVL staked on this chain.

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Um, you know, you've heard me talk about personally on my own platforms and on some Blockspace pods, but, you know, um, I would be cautious as, you know, the exit of this L2 c- uh, seems a little under question.

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But one point five billion dollars is twenty-two thousand Bitcoin staked on this, and they have a staked ETH equivalent called Stone. A hundred thousand staked ETH according to their own metrics.

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So, um, look at this chart here where we get to see the, uh, s- Bit-Bitcoin staked on Merlin chain since, uh, February of '24.

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We saw massive depositors throughout February and March, um, the great Merlin unstaking, uh, just after the halving in April, and then it's been los- mostly plateaued since then.

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We saw a little bit of an increase in depositors, uh, onto this L2 in the first week of June. Let's move on to Ordinals, my favorite chart from... my favorite Dune dashboard from Data Always on Dune.

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Um, sixty-seven million inscriptions, um, the majority b- of which are BRC-20. But, um, I'm gonna zoom out in a second here. Um, so we have here a chart, uh, showing the kind of number of inscriptions happening per day.

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This includes JPEGs, but also BRC-20s. And we saw inscriptions pretty much drop off a cliff and go to near zero comparatively right after the halving as Runes captured the narrative.

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Well, over the past couple weeks, really the past week, we've seen a bit of a return in inscription activity. This is almost exclusively driven by BRC-20s from Unisat. I will talk about this again in a moment.

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So we are seeing inscription activity return. Again, it's mostly the JSON type five ticker pizza, uh, mint from, uh, an airdrop from Unisat. Um, let's see the other charts on here.

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I will probably skip those. I'm just gonna go straight to the marketplace dashboard from Domo.

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Um, four point one million dollars in aggregate, uh, marketplace volume to date across all major marketplaces as tracked by Domo's dashboard.

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We see volume by marketplace having returned a bit over the past, uh, month as, uh, you know, the Runes recover and as, uh, as I said, as I mentioned, the, like, kind of a BRC-20 resurgence.

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Um, I think one of the things I wanna point out here, and I-I'll talk about this a bit, is, is a kind of the marketplace, um, uh, the marketplace wars or marketplace competition.

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You have, uh, Unisat, OKX, and Magic Eden as these three kind of titanist dominant marketplaces, and they do, um, they do vie for competition, and they kind of eat into each other's market share, but it has this kind of cadence and rhythm to it, which is kind of dependent upon what the hot, um, type of thing to mint is on Bitcoin.

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So we saw here, you see this line, this is, uh, um, six oh seven.

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This is Friday of this past week, where we had a massive, uh, pump in, uh, marketplace transactions, which corresponded to, um, an increase in marketplace volume.

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But you might notice, and it's hard to see on this chart here, the majority of this volume happened on Unisat.

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Unisat's been losing market share by both transaction activity and by volume over the past, um, couple months.

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But when Unisat did their giant pizza airdrop, this generated a lot of new interest and demand, uh, for their marketplace as it's BRC-20 heavy. This is interesting to watch.

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Last week, this stream, I was talking about how Magic Eden had been, uh, dom-- had been increasingly, uh... their, their market share had been increasing, really eating into OKX and Unisat's market share.

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But we saw a couple days where Unisat did burst back on the scene this past, this past week as they dropped their-- distributed their pizza token. Um,

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user growth on all these exch- exchanges, marketplaces, has begun to creep up a bit. Um, um, again, this chart says-- shows unique users by marketplace.

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It's really just tracking, like, unique wallets, but I think this does mitigate a bit of the dual wallet count.

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Um, but, you know, we saw user growth kind of plateau to, um, a few thousand new users per day, um, but it seems to be ticking up again.

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I don't wanna read too much into this little, you know, tick here over the past three or four days, but it does seem to be returning. We'll see how this goes. Um, let's move on to Runes.

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So Runes, going to the Geniidata dashboard, Runes market, uh, overall market cap peaked this time last week at about two point two billion dollars and has declined a bit. Um, the mania did have to take a breather.

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We're now at about one point eight billion dollars for this overall market cap of all fungible tokens of the Runes type.

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Um, this little graphic here, this fun icon from Geniidata shows Casey's health, um, referring to a joke that he made that he would commit seppuku if Runes did not have a billion dollars in overall market cap.

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Well, Casey is safe. Uh, he's about eighty percent over the safe line as Runes are about one point eight billion dollars into a market cap. I'm gonna be hitting this dashboard a lot until I find a better one.

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Um, this is from Poshi on Geniidata.24-hour volume on runes, roughly 6 million, 15,000 unique sales, um, and we see the daily volume trends on runes here declining a bit over the past couple days.

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Um, this is a chart I tweeted out just a moment ago, which shows daily exchange volume percentage. I think this is really interesting.

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So discounting that, that event with, uh, Unisat, we see that, um, Magic Eden is pretty close to becoming the super majority of transactions, uh, for runes, uh, by volume.

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Magic Eden is currently doing about sixty percent of the volume for runes, with OKX doing about thirty percent, Unisat with about six percent.

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This is now kind of looking almost like a duopoly across the marketplace space for runes.

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Uh, Magic Eden had not really found market fit or market, like, traction for fungible tokens, as they'd been mainly like a JPEG, uh, marketplace over the past year.

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But as they were able to be first on the scene with, uh, runes right at the halving, they certainly have, uh, seen a lot of, uh, market share, increased market share.

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So, um, it'll be interesting to see how this story develops. Again, look at this past 24 hours exchange volume distribution. This top bar is Magic Eden, $3.6 million.

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OKX with less than half that at $1.7 million, and Unisat at, uh, half a million. Um, the top 24-hour price gainers, I don't know if I'm gonna spend too much time on this.

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I don't know if I wanna make this like a ticker price show, but it's some, you know, random animal-themed tickers, and we have... Uh, yeah, that's probably all I will spend on that. Let's go into the news.

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Um, the news this week, and I wrote about this in the, uh, in the, uh, Blockspace newsletter that came out this morning, um, is that you saw [chuckles] as I said, a fee spike here,

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um, this past weekend, which was from, again, that exchange, OKX, consolidating UTXOs. What does that mean? Well, I, I go into detail about what that actually means in our newsletter, but I'll summarize it here.

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Basically, as people deposit to an exchange, the Bitcoin they deposit is in the form of outputs. So they'll send Bitcoin to an exchange, and then that, uh, exchange has to manage the outputs that are pointed to them.

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We call those unspent transaction outputs, or UTXOs. So on all these UTXOs, um, it's... you, you kinda want to manage having how many of those you own, so you want to typically reduce or consolidate those.

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So these e-exchanges will have to create transactions to take, say, 100,000 UTXOs down to, say, 10,000. This is just good practice and reduces in fu- and reduces, uh, future fees.

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Well, OKX, um, did a very not optimized UTXO consolidation this weekend, where they basically would send out in batches, um, where they'd have one batch estimate the new average fee to get into a block.

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This created a phenomenon re- where OKX was effectively bidding against their own batched transactions and, and kind of single-handedly ramping up the fees.

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This resulted in millions of dollars unnecessarily spent by OKX in order to consolidate their UTXOs.

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If they'd been just a little more patient or just a little more optimized, they would not have to spend, um, what looks like to be about $17 million overall to consolidate these UTXOs over the weekend.

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So, um, there's a great thread on this by Ord Data from this past week. I would recommend, um, reading this if you're more of an Ordinals folks, a Ordinals person, to kind of understand how this works.

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And then, um, I would also, uh, recommend reading a couple threads by Mononaut, who is one of the folks running mempool.space. So, um, uh, yeah, the final results for this is that it was about

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2,385 transactions with about 357,000 inputs. They had an average fee rate of 246 sats per vbyte and cost, uh, 254 Bitcoin in total fees. That could have been reduced significantly.

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So, um, on this topic, you know, I wrote a blog, make sure you hit up blockspace.media, read the latest blog, subscribe to the newsletter, called Nobody's Ready for High Fees.

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And my point is, is that when you have these tier one exchanges doing these kind of UTXO consolidation flubs, and this is... You know, they can stomach that, that, um, they can stomach that loss.

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Like, that's expensive, but, like, they have large treasuries, and this gets into kinda R&D budgets. But, like,

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their ch- their challenge and their, uh, lack of optimization for UTXO consolidation extends down to the Bitcoin user base.

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So if you've been degenning BRC-20s or if you've been DCA-ing Bitcoin, you could have similar, uh, you could face similar issues in the future.

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So I make this point in this newsletter where I kinda, I point out that this is, um, this could be a looming problem for the Bitcoin ecosystem, as very f- I think this is kind of a technical issue which has to be solved at the user, at the, like the UX side.

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Um, so this could mean that people who think they have a lot of Bitcoin may actually not be able to access that Bitcoin without spending a lot in fees.

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So this is, I think, very important to, uh, to keep your eye out for, and, um, I'll be talking a lot about this on my personal Twitter and platforms, as well as on Blockspace, uh, channels.

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SoUm, the other, uh, kind of news, again, I'm gonna go back to the Blockspace, uh, newsletter from last Friday, is that, um, you know this Opcat thing that the Taproot Wizards are pushing, that the Quantum Cats Ordinals collection promotes is, uh, an opcode and soft fork onto Bitcoin, Opcat.

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You know, this seemed like a fringe thing about six months ago. Um, I- in the latest newsletter, I kinda break down both a timeline and a TLDR of where we are that, um, you know, this-- the, the BIP

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four Opcat was really only introduced in late fall of last year, and it seemed like a fringe thing. But in just a matter of six months, this, um, this Opcat topic has become pretty, uh, mainstream.

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In fact, it's, it's found, uh, wide support, broad support among a lot of people who I think were not talking about it nine months ago, from Adam Back to, uh, StarkWare. It's live on Bitcoin Signet.

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You have some other people who are, um, I would say they're pragmatists, and they're conceding some ground on Opcat. Um, I use the example of Shinobi as he is a critic of Opcat, but he's a pro-covenant and a pragmatist.

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So you see, like, this, uh, you see, like, people generally fall on the side of pro-soft forking Bitcoin, uh, in the interest of, uh, solving what some people, uh, anticipate are some issues where, uh, uh, for scaling and, uh, UTXO ownership.

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Let's look forwards. Um, coming up next, we have Inscribing Nashville, which is the, um, kickoff conference to the bigger Bitcoin Nashville in July. Um, Blockspace will be at Inscribing Nashville in force.

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In fact, we'll actually have a whole, uh, uh, kinda broadcast component to this Inscribing Nashville conference, where we will be doing interviews and, uh, in-depth content with the headliner speakers of the conference of Inscribing Nashville.

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So keep your eyes peeled. We'll be dropping some discount codes, and we will be promoting and kind of teasing what we're doing with this. Speaking of teasing what we're doing with this,

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um, if you like and subscribe to Blockspace Media on wherever you stream or YouTube, Spotify, Apple, whatever, RSS feed, on Thursday I have an interview coming out with Leonidas.

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Yes, we're talking meme coins, specifically Dog Go to Moon, um, what could be the first billion-dollar meme coin on Bitcoin. So, um, I have a-- I had a great conversation with him. That's dropping later this week.

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Make sure to like and subscribe and, you know, notification bell button. Um, so without further ado, that is the Bitcoin Season Two weekly update.

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Um, uh, make sure to, uh, turn on notifications, hit the subscription button at the various platforms, um, and I will see you on various Blockspace media content platforms. Thanks so much.

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[upbeat music]