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[upbeat music] Welcome back to Block Space Live, powered by CleanSpark. We have an abundance of stories for you. We are kicking it off with stocks, stocks, stocks. Stonks, stonks, stonks.

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Everything's ripping this morning because it decoupled from Bitcoin. Bitcoin goes down, and the rest of everybody's bags go up.

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Then we're gonna talk about strategy, and rather more the Polymarket strategy market, about strategy selling Bitcoin, which had resolved a little bit unexpectedly. People are mad about that.

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We're gonna talk about price, we're gonna talk about Swan dropping ex- its suit against former Proton employees, and Bitdeer. Block Space goes live Monday, Wednesday, Friday, and Tuesday and Thursday.

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That's every single day of the week at 1:00 PM Eastern, featuring quick hits on AI, data centers, mining, and emerging tech. Make sure to hit subscribe.

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Hit that notification bell to get the push notification on your phone. If you're listening on CoinDesk, we are leaving CoinDesk soon, so head over to the Block Space RSS feed, and

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make sure to subscribe to our newsletter, newsletter.blockspacemedia.com. This show is brought to you by CleanSpark, NASDAQ ticker CLSK. More on them later on in the show. Colin, the stocks are going up.

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I sure hope you didn't buy Bitcoin this week. Um, I will neither confirm nor deny. But yes, the humiliation ritual continues, and all of the former Bitcoin miners turned AI companies are ripping.

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Charlie, I'll share my TradingView screen right now just to give- Yeah, because-... people an idea of where things are at... we show TradingView now.

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We don't show a Clark Moody dashboard or your other Bit- regular Bitcoin haunts, because they don't show stock tickers. No. So why even bother anymore? This is a stock show now. Yeah.

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But yeah, I mean, everything is, um, absolutely surging. This is the f- I believe we got the five... Yeah. Here's the five-day view right now. QEL coming out as a frontrunner this week, up almost 25%.

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The pe- the people like the rebrand. The people like the rebrand from Bit- And you know who likes the rebrand even m- the most, is Leo Aschenbrenner- Oh...

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whose situational awareness apparently re-upped their stake in QEL recently. I believe that they have, let's fact-check this really quickly, something in the tune of tens of millions of shares. Yeah.

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I mean, look, you drop the word, this, this, the prefix bit from your name, and your stock goes up. It's that simple. We're not even just rotating out of Bitcoin mining, or just any reference to Bitcoin whatsoever.

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You, uh, r- you drop it from the webpage, and, uh, your stock goes up. Simple as that.

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I mean, yeah, it is kind of like, uh, kinda reminds me of, um, in 2017 when you'd have these crypto trading groups or these trading gurus, and, like, someone would shill, you know, an ICO or shitcoin, and then it would just double overnight.

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Um- Yeah. That, it's like, it's like the inverse of Long Island Iced Tea- [laughs]... adding blockchain to their name. And [laughs] it's, but you remove blockchain, and your stock goes up.

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So it's, it's, yeah, that's, that's the meta right now. Yeah.

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So apparently they have, like, a roughly a $39 million stake, but you know, a bunch of other names that have been kind of dormant for a while are, are running. Bitdeer is up almost 25% over the week. Hive up 18%.

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And then, you know, everything, e- everything on the TradingView right now is up, with laggards being Mara and Wolf. So- I mean, you say, you say Wolf- It's, it doesn't, the train doesn't stop. Yeah.

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Well, but you say Wolf, like, on the week, but even just today it's up 3.7%, which is g- great. Yeah. And I believe it recently hit an all-time high, so- Yeah...

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you know, uh, we're, we're starting to really see all of the Bitcoin miners r- you know, kind of irrespective of whether or not they have an AI deal in place, starting to catch a bid all across.

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And that really does raise questions, for me at least, Charlie, of, like, where we are at in the cycle.

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You know, we were talking before we hopped on about when we had Mike Alfred on, he thinks the CapEx cycle is going to extend the market rally maybe even into 2028.

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And at the risk of, of being a top buyer on some of these things, and at the risk of giving bad financial advice, it, it's kind of becoming hard to ignore the momentum. But then we've got this Google news- Yeah.

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Google... with Berkshire Hathaway taking a $10 billion stake amid Google's $80 mili- billion raise. Yeah. So here, here's the story from Reuters. Alphabet plans to raise $80 billion for AI goals.

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Berkshire, Berkshire Hathaway, the late Charlie Munger's company, [laughs] to invest $10 billion. I... Colin, I thought, Col, I thought, I thought Alphabet already had $10 billion.

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Why do they need money from Berkshire Hathaway? Compute, compute, compute. Yeah. If you think you have enough, kind of like with your emergency food supply, you always need more. Yeah. You know?

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So, so h- the deal is that the Google parent will sell 10 billion worth of shares to Berkshire in a private placement comprising 5 billion in Class A common stock and 5 billion in Class C common stock, which are both below yesterday, Monday's, closing prices.

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And, um, this is interesting. We've got some takes on this, 'cause I was trying to wrap my head around this, Colin. And, uh, so obviously we had to- This is really thought, thought-provoking, as, as you said...

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yeah, we head to Twitter to get, um, to get the smart opinions. It's up to you to decide whether they're smart or bad opinions. But here's one from Rihad Jark, Yark.

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[laughs] Um, Google announcing an $80 billion capital raise is a big moment for the industry, and quite a shocking one.

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It means the limits of spending on compute by the hyperscaler are no longer their cash flows plus bond issuance capabilities.The limit is now the market and market sentiment.

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There's a few possible options why Google went this path.

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Option one, they see another big step up in accelerating demand for GCP and other Gemini models, and they need to increase CapEx substantially more than they already did. I could see that.

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Option two, which is interesting to me, and I like to imagine, they want to front-run OpenAI, SpaceX, and Anthropic IPOs to drive, to drive some liquidity out of the market, and with the cash, lock up more of the semi- semiconductor supply chain for them not to be locked out by OpenAI or Anthropic.

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That is-- That's the most interesting one f-for me, if we can just like pause on that for a second because if I'm like looking at Google,

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maybe there's something I don't know for the people making these investments, but Gemini is just not of the same caliber, uh, uh, as, as Claude and ChatGPT. Um, I mean,

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I- I, I mean, I-- Colin, I see this like less as, um, the c- the competing for the frontier models, and it's more... 'Cause like you, you have to consider you- you were-- we're, we're bidding for megawatts.

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We're bidding for semiconductor access. Like, um, like a lot of people will say things like XAI, which may not have the best model. In fact, it's probably, you know, mid-tier.

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They have like all this compute and it's all proprietary full stack, and Elon's trying to build it on silicon. That's a pretty compelling value thesis as you head into the SpaceX IPO.

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I could see Google maybe feeling like they want to be in a similar spot. Like- Makes sense... a lot of, like I- Just like we focus on pure play hyperscaling, like you're not- Yeah... gonna worry about your model as much.

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You're just gonna worry about the compute side of things.

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Yeah, like the, the models will kind of collapse into s- you know, roughly equal like weights and strengths, and it's kind of more of a h-how much compute and megawatts and semiconductor access do you have?

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I mean, um, it's funny, if we look back to the past two years, uh, for all of Trump's like chaotic will he, won't he bomb whichever country, in this case right now it's the Ayatollah, um,

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the s- the, the stock market's ripping. And every time people think it's, it's, it totally joever, but it, it hasn't been.

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Maybe like the actual market, the market's actual worst, um, enemy might be itself with the OpenAI, Anthropic, SpaceX IPOs. Like where does the money come from? Is that... Are, are the retail investors really the, uh,

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are they the, the dumb liquidity, dumb exit liquidity for the, uh, you know, the insiders and, uh, pre-IPO investors?

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Yeah, I mean, that is going back to the comment about Mike saying the CapEx cycle will extend for at least another year, maybe into 2028. You're talking about Mike, uh- Mike Alfred, yeah. Mike Alfred, yeah.

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Of Alpine Fox, uh, the hedge fund that's y- their, their two big bets right now are Iren and, um, Cipher, right? Or is it TerraWolf? Anyway, their- [chuckles]

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Uh, but the point being that, uh, Mike was making the observation that the CapEx cycle is going to have to continue to play out.

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And the, the, I mean, the looming question I think for anyone n- dipping their toes or diving straight into this market right now is like, at what point do you run out of other people's money for that?

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And you kinda mentioned it with Google. It's like, don't they have enough money? Clearly, this is signaling that they think they need more.

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And if they're-- if this is oversubscribed or if it, if they get the raise that they want here, then that makes, makes me feel like we probably do have a little more juice left in this.

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But at a certain point, there's just not going to be enough dollars in the room to furnish. You know, at this point, the numbers don't even make sense anymore.

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Hundreds of billions of dollars getting thrown around left and right. Yeah, we have a listener to the show, JHY. I definitely think that they're the retail.

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The exit liquidity feels like the fiber optic cable into two thousands. So much pushback against data centers. Yeah. I mean, yeah. That's the dark horse too, right?

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And I would love to have someone on in AI research talk about the feasibility of this. But- Yeah...

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you know, you have these inflection points in, in industry where a new form factor or a new technology completely changes how everything did anyth- uh, uh, how, h-how anyone would do anything, right?

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And so at what point do we actually get, you know, oh, uh, a, you know, commercially viable AI computer for everyone's homes to where actually you don't need these massive data centers.

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That was the big fear with DeepSeek, you know, back last year. Although that, as I understand, was like many things that are coming through the east and west divide. There's more mystery to that than there is certainty.

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Like this idea that DeepSeek was actually like that much more efficient than these other models act- is actually belied by the fact that there's a bunch of other stuff going on in the background.

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Um, and, a-and they also piggybacked on all of the advancements from the frontier models in the US. But, uh, it seems to me like we're maybe closer to that than not, but also no one can really price that risk. Um,

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I will show this tweet before we head to the next thing. This is Nick Batia, Colin. I think you and I have some, uh, some thoughts about this.

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Nick Batia says, "I just realized that Bitcoin probably won't go back up until the AI labs are past their IPOs." This is everything we're seeing. Anything attached to that- You don't say. You don't say. You don't say.

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I mean, this has been my conclusion probably since, probably since I started seeing gold rip at the end of last year, Bitcoin getting crushed, and all of the AI companies continuing to rip.

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It, to me, it just seems so painfully obvious that there is a liquidity drain with Bitcoin right now. It's no longer the shiniest thing in the room.

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And if you're looking for high growth returns, y-I mean, you know, the stock market's trading like Binance circa 2017. So, you know, w- w- yeah, why would you just focus on Bitcoin?

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Um, I say that as someone who's still long-term bullish and loves Bitcoin, but, like, right now it's just not the belle of the ball. I'm either making the best DCAs of my life or the worst DCAs.

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[laughs] But I am DCA-ing. [laughs] So that's the only ticker I will actually show is your good old BTC, which we'll talk about some markets here with our guests, Rob and Becca, from Anchor Watch here shortly.

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Um, but before that, let's have a word from our sponsor, CleanSpark. [gentle music] We are CleanSpark, America's Bitcoin miner, a publicly traded company with the largest operating hash rate,

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powered entirely by self-operated infrastructure across four states. This is our proof of work, and we are setting the standard for what's next.

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Learn more about the intersection of energy and Bitcoin at cleanspark.com. There's very few people who can follow Harry Sudock's dulcet tones as he reads the CleanSpark ad read.

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But there are a couple people who can do, and that's Rob and Becca. Um, I don't unfortunately have a beautiful four-screen, uh, layout prepped yet, but I'm gonna add them to this. Let's bring them on up.

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Rob, Becca, welcome to the show. Hello, hello. Thanks for having us. Thanks for having us. Yeah. Thanks for joining, y'all. Great to get y'all on. Yeah. Is this your first Tuesday of doing the Blockspace live podcast?

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Yes. Now you have to, like- Yeah... reset your whole production. You're just scrolling to the bottom of Caryl. Technically, last week was the first.

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Technically, last week was the first Tuesday, but that was a substitute for Memorial Day. Yeah, 'cause we were doing this- So what are you going from? You're going from how many to how many? Three to five. Three to five.

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All right. Every single day of the week, so. Let's go. Yeah. It makes sense. Once you pivoted to being an, an AI data center podcast, it made perfect sense. [laughs] There's a lot more to talk about.

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Yeah, we like to have a little Bitcoin sprinkled in here every now and then- [laughs]... though, you know? Yeah.

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It's pretty much just we're gonna, we're gonna monitor the situation about how Bitcoin's going down, and that's actually how I'll intro this. Rob, Becca, Bitcoin's going down. [laughs] What's going on? Let's talk price.

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Why is it going down? Uh, Becca, you, you seem smarter than Rob to me. That's fair. [laughs] What's going on? [laughs] I mean, look, I'm, uh, I'm very redundant here.

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I, [laughs] I think Bitcoin follows a four-year cycle. And I think the prices right now off the all-time high last fall are pretty on schedule, and,

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and not more severe or less severe than really expected. So I just view the entirety of 2026 as a buy opportunity.

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And, um, it's not that I won't feel it when we, uh, you know, regain membership to the 58K gang. Like, that will feel bad, but also it'll feel expected because it's 2026. I don't know.

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That's why I think the price is going down. Uh... It's 'cause it's a year starting with two. Rob, what's your take? [laughs] Well, Rob, you had a g- Yeah. I mean, I can get into the news of the day, but...

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Rob, you had a good tweet about this recently where you said, "We need to revisit February's lows or go below them to wash out margin." Yeah, it's way low. We laugh, but, like, that seems plausible enough to me.

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I, I think Bitcoin is not a unique market, it's just i- uh, the most liquid 24/7/365, most market of all markets, you know? And we...

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I, I don't think the sentiment, like, from, has changed much since February.

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The global market backdrop of just AI compute kind of eating the world, it is a cliché thing to say at this point, but I do think this is more, um...

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This is like the Industrial Revolution, but probably even bigger than that. Like, in 100 years they'll look back on this time of being able to

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contextualize memory in these multidimensional models, and being able to do vector queries and matrix multiplication, all of a sudden we made, like, sand think, like, is going to be transformative.

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And from marginal dollars of allocating capital at the moment, that seems like way more of an exciting ecosystem.

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And as you guys, I think, said yesterday, you know, for a long time the crypto industry in general was, like, the most exciting thing in the room in tech, and now it's not.

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And so I think this is part of, one, Bitcoin's saturation, and just general, um, sentiment. As for why that, I think there's... One, I think we have to go to lower lows.

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I think we need to kind of shake people thinking about, like, we're just gonna hang out at 70K and then rip to all-time highs. I think shaking weak hands. I think there's a lot of levered Bitcoin in the market.

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Um, Strategy, uh, with STRC had $10 billion of STRC against $70 billion of Bitcoin. It's now $50 billion of Bitcoin, you know, pretty recently.

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I pulled up, uh, I wished Eric Wall a happy Pride Month, 'cause much, you know, he came up with the rainbow chart. Yeah.

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And to Becca's point on four-year cycles, we're currently in the bottom purple section, which is Bitcoin is dead, and the last time it was in the purple Bitcoin is dead was four years ago in, like, December of 2022.

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Uh, and I just think that, like, these treasury companies, they're all trying... When your main business really is just holding Bitcoin, there's like a, th- there is a reflexivity that goes both ways.

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You have the, we're gonna rip up because we're gonna buy Bitcoin, and buying more Bitcoin's gonna cause more Bitcoin. You have Bitcoin treasury companies that are selling now.

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POMP's, uh, treasury company, the ProCap Financial, sold 50 Bitcoin to buy back shares to get back to NAV. Um, you had Strategy who did their, like, performative 32 Bitcoin sale just to show that they can do it.

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Um-There's other treasury companies, I think you've seen, like with NAKA, um, they, they bought the pico top and they took a Bitcoin-backed loan out, and now Bitcoin price is down [computer beeps] 50% from there.

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And so depending on your LTV ratios, like that is, that is a very precarious spot to be in.

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And then I think it's also like a tale of two cities too, 'cause if you look at Block, like their stock is doing fine, kind of up. You know, they are a business who holds Bitcoin, but it's not their entire business.

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They have a lot of software, like flows, uh, like software sales flows.

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You look at, uh, a treasury company in a way, like CleanSpark, you know, with all of the HPC compute and everything they're working on, you know, they have a large chunk of Bitcoin on their balance sheet, but it's not killing them.

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There's an interesting green shoot with, um, uh, Strive, ASST, with, uh, you know, th- their, their preferred equity vehicle. SEDA has been doing pretty well. And they were just issuing...

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They were stacking like 1,000 Bitcoin a week. Um, but SEDA right now is at $98 a share and STRC is at $97 a share. Um, SEDA went to daily dividend payouts too, which was interesting.

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I think that was supposed to smooth out some of their volatility.

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But I just think that, like market sentiment, um, these treasury companies being levered, um, I don't personally like comparing the pri- all-time high price of the stocks to the bottom if like they weren't even in management yet.

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It's like speculative runs before they were even running the company. I don't think that's a fair benchmark. But even when you properly weight it, it's still down a lot. Um, I think there's just a massive...

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This is like the hangover. This is what this is. This is the hangover of the treasury company cycle bull run up, and you have to kind of take your medicine on the way down. I do think that. I mean, I, I do think...

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So I think events obviously do impact the market. I just think w- the, the large wave is, is the four-year cycle, and it is reflexive at this point. Like, the cause of it doesn't really matter.

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But I think Rob's, Rob's points are, are accurate, and I do think it's a small pool of Bitcoin-interested investors.

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And I absolutely believe that the cycle didn't, uh, hit what it might have last year because of volume going into treasury companies.

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Uh, and then I think the behavior of treasury companies now having to make debt payments [laughs] is also, uh, impacting Bitcoin price.

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So, I mean, I really don't think, uh, the majority of the treasury companies was, like, a good use of capital for the industry or many individuals, but, uh, you know- And then-... people do as they do.

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[laughs] Insane timing. Man, we feel... I feel you. Yeah. Insane timing on those too, right? Like, these were launched into a bull market where everyone had high hopes. Yeah.

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And then, uh, AI, the AI trade came, and everyone who knew what they were doing got in and got out quick on the treasury companies, and a lot of other people got burned.

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And, the, going back to the hangover, I think where a lot of people were lost on this though is, like we didn't even get to the hard liquor during the bull run. [laughs] We, we, we, we bar- No...

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we barely got to the- Yeah... double IPAs. [laughs] And everyone woke up feeling absolutely destroyed. Yeah, we started- Right... daydreaming too early [laughs] is what happened. Yeah. Yes. I just don't understand why.

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Like, I've only... This is only my second real cy- like second turn through the full cycle. I only needed to learn things, like once that really were incredibly painful [laughs] financial lessons, right?

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Like, why do people need to learn it, you know, three and four and now five [laughs] times? No, it's different. And saying it's different this time. Like- Yeah, well what, why don't you explain that? I don't know.

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I, I'm a mere, I'm a mere visitor here, but it doesn't seem very different [laughs] any time. Yeah, it's like that George Bush line, uh, "Fool me once, shame on you. Fool me twice..." Yeah.

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[laughs] "You fooled, you can't get fooled again." Yeah. [laughs] Exactly. That's right. [laughs] Nailed it. Okay. I wa- I wanna talk about, um, more of the news of the day.

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Uh, this may be more of a Rob question, but Becca, feel to chime in here. Mm-hmm. Um, people are mad at Polymarket right now.

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[laughs] Rob, as, in your, as a side hustle, you, um, [laughs] you run some prediction markets. [laughs] So you seem like the guy. Um, explain to me why people are mad at Polymarket- I-...

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right now, given the Strategy selling Bitcoin part. Yeah. Yeah. So this was a, this was a wild story.

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Uh, my, my interest in, in prediction markets is they just cut through noise and posturing, and it's just, you know, put your money up or shut up.

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Um, in particular, this one with Strategy's interesting because there was a Polymarket on would Strategy sell Bitcoin in the month of May. Now, would Bitcoin...

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Now, if you looked at it on June 1st, yesterday, Strategy did renounce, uh, announce in their 8-K filing that they did sell 32 Bitcoin.

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The market for this was still open for people to place bets on after this information became public, and people started plowing millions of dollars closing an arb saying, "Look, it's right there."

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Uh, then the market closed. After the market closed, uh, you had an issue where, uh, they then updated the language. Uh, that, that's my rainbow chart. Yes, that was the rainbow chart- [laughs]...

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talking about, uh- Yeah... the cyclical price nature of Bitcoin, that we're in like s- like death zone. But the, for the Polymarket,

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uh, they, after the fact, changed the language to say, "Oh, this was only to be settled based on information that was released in the month of May."

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And since it was June 1st when the information was released, it doesn't count, but then that goes back to the question of why was the market still open if the action was closed, right?

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So there's a lot of people who are out hundreds of thousands of dollars. A couple people are out millions of dollars.

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And for those who aren't familiar with how Polymarket works, they have this protocol called the UMA protocol, and it's kind of like the token ho- basically, it's opt- optimistically settled.

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So it actually by default assumes that whoever submits an answer is honest, and then you put like, uh, like $1,000 worth of like, like POLY token into it, uh, as a bond.

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And then what happened was, uh, was [laughs]Uh, people started disputing it because they're like, "No, no, it says pretty clearly right here they sold on May 23rd, and it's now in the, the June 1st filing."

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And it's going back and forth now, and Polymarket's trying to, like, put pressure on the token holders to vote no, and close and settle it out. But I think it's a massive advertising opportunity for Kalshi.

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Like, if you're gonna hold these kind of markets, to after the fact change the language would be like going into a casino, and then after they deal you the blackjack hand, they change the rules of the game.

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The, the honorable way to close this out would be just to return everyone their money.

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If you have it, everything just settles out at the pri- like, and you just kind of like n- neutral it out, they lose a little bit of money on the overhead, but it's pretty, uh, pretty controversial and dastardly, I'd say [chuckles], to, uh, change a bunch of addendum language after the fact to clarify things, and leave the market open.

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'Cause if you're an arbitrager, and you just see a, a known fact, factual event to be true, and it's being, you know, they're selling dollars for 80 cents. You just close that out.

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Like, that's actually the responsible thing to do. But there's always the platform risk. Yeah, and that's what, th- that tweet that I just picked up, this guy said he lost, like, half a mil. Yep.

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And he did exactly what you were saying. He actually had a very small position before. Yep. And then he saw the filing, reread the rules of the, of the contract, and then just, like, poured money into it.

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Like you were saying, 'cause, like, you know, that seems like an incredible arbitrage opportunity.

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I'm just kind of at a loss for how anyone at Polymarket, number one, would think that changing the language of the contract is at all something that you should do. Like, that's an incredible breach of user trust.

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But I don't even, I don't understand why this is, why this is controversial at all. Uh, w- when- Yeah... you look at the filing, and they're telling you when they sold. Right. It was an, like- I, I think it's a twofer.

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It's a twofer of one, that exact fact, that there was objective facts that the market should settle one way, and two, they left liquidity open for people to buy and sell the tokens after the window was closed.

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If it was at a point where, like, the action can no longer be influenced because we have full information, it should've just stopped at midnight and froze it out, and that would've been way cleaner of a resolution.

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'Cause you'd still have people saying, "Oh, but wait, like, they announced the next morning." And you could say, "Well, the market was scheduled to close on May 31st."

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As someone who's set up multiple, uh, prediction markets before, I've used Predix, which is a fun, like, Bitcoin native lightning settle just prediction market.

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I've done multiples of these, and you have to be really, really diligent in how you frame the contract language, the details and explanations, dispute resolution crush- thresholds, and how disputes would be resolved.

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Those things all need to be disclosed up front, because otherwise, you know, it, the house always wins. They can just change the market around.

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Who's to say someone at Polymarket didn't have an exposure there, and they wanted to start nudging it? I don't know. Yeah.

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Uh, this gets into the oracle problem, which is pretty well-known, I would say, in the little more technical, like, blockchain, Bitcoin, crypto world. But, uh, this is something we've not solved.

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This is an ongoing s- problem that, uh, we may never solve. Um, Rob, I invite you, and, uh, Becc, if you want to opine on, like, what's the, what, where does this take us directionally? 'Cause prediction markets are big.

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Institutions love it. They're gonna get, they're getting the green light from the regulators, but, like, we have this problem. It is. What does it look like? It shouldn't get regulated.

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Like- Well, I mean, I- they will get regulated, just like casinos. Um, and people are already getting charged with insider trading. I didn't actually know at the beginning of when they really started blowing up.

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I was like, "Does that exist?" [laughs] Does, does insider trading even exist on an unregulated market? But some indictments would tell me that yes, yes it does exi- [laughs] yes, it does exist. But I think, um,

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a- as it relates to Bitcoin, if we wanted to take it there, um, the biggest thing for me is new money in, and younger people.

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So, you know, my son is in his 20s, and, uh, they actually, he and his friends actually do have some interest in Bitcoin.

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I mean, my son does for sure, but others as well, and, like, in my apartments, uh, some of my tenants have been kind of masters interns, right? So these,

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these are people who are starting to make investments in their 20s, and, like, setting out on their financial lives, and they are using Polymarket as investments.

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That's how they talk about it, is, like, they talk about, like, what they heard, and they might even, like, go do research, just like y- you're diligencing a stock.

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Um, but it's just like they are so in this mindset of, like, get rich quick, like, not in the compounding interest mindset that I think, uh, at least I was in when I was in my 20s.

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Um, that I do think it will have an impact on Bitcoin. I think it slows retail adoption, actually, quite significantly, and I think that is one of several things that impacted last year's, uh, unexciting bull.

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That, that's, that's a good, that's an interesting point. You know, people are finding new place... Uh, uh, they're going further out on the gambling curve, so to speak. Yep. For returns.

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Well, the crypto didn't survive the gambling curve. Meme coins, those got, uh, what are, cheatified. [laughs] Those got, uh, scam, scammified, like, so quickly.

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The, the narrative for a hot minute was that meme coins are, like, the honest crypto, the honest pump and dump, right? Because it's all based on nothing, it's all just art, it's feeling.

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So, like, as long as you go into it open-minded. But very, very quickly it became obvious then that it was just a group of insiders with fake wallets, and they were trading to themselves, and doing all that stuff.

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So that market disappeared s- within six months. It never, like, had a big thing. And so I think, uh, the gambling itch couldn't be... scratched with crypto. Uh, it didn't exist in a dependable way, in a trustworthy way.

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[laughs] And so Polymarket and Kalshi are the, are the safe way to degen. The, the government-approved- Yes. [laughs]... you're allowed to gamble here.

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And I think there's like a deeper lesson to this too, because I think that ultimately when you look at Kalshi and Polymarket, I, I mean, I've- if had to guess, I would say the two biggest markets, just off the top of my head, for these would be politics and would be sports- Mm-hmm...

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on, on either of these platforms. For sure. Right? And I think that the political one- It's fascinating... kind of gives it this veneer of legitimacy in the sense of like, well, it's not really gambling, right?

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You're, you're, you're investing in an outcome. [laughs] Oh, did you- You know? Did you see that one, uh, sports bar in New York City that offered, uh, for the Knicks playoffs, that if they won, the Knicks would...

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If the, if, if the Knicks won the game, they free open tabs for everyone. And what the owner of the bar did is they bought shares on Polymarket- Oh... as a hedge.

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So like, that's actually like a fun, interesting way- Yeah... to like create exposure where, you know, if the Knicks aren't likely to win, you just put 10 cents on the dollar, 20 cents on the dollar up. That's funny.

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And then if the Knicks- Wow... lose, then you just collect the bar tabs. But if the Knicks win, you get a 5X payout. Like, it's a pretty beautiful... Like, that's actually genuine risk hedging. Yeah.

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That's genuinely like an insurance contract. You're, you're hedging- Right... team risk. Now I'm like, can we do that as a promotion? [laughs] Yeah. Find a good way to do that.

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So I mean, you are kind of hinting- No, I'm, I'm like li- I'm legitimately like- Yeah... gears are turning right now. I'm like, can we find a way? Well, because that's like a marketing expense, right?

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It's a marketing expense. If you end up giving the, the free, the free- Yeah... uh, beers. And as long as everything is transparent and, you know- Yeah... honest.

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So I need to go open a bar in a, in a town that loses all the time and just make- [laughs]... a bunch of money. [laughs] At a, a town of alcoholics. This is a great port. A town of alcoholics that loses all the time.

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Yeah, exactly. Somewhere up in the north, but I think Green Bay is usually middle of the pack most years. [laughs] Yeah, Milwaukee. There you go. Milwaukee is the place. [laughs] Yeah. Um, uh, thanks for coming on, Rob.

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Uh, there's one last thing I gotta show here, which is we don't usually, we don't usually talk too much about, uh- Oh, no... about filtering and Bitcoin stuff anymore because this is an AI show.

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But you have your own little, uh- This is when I leave. [laughs] Yeah, you got- [laughs] Got your own little market on here. I got to, I got to- I do have my little... Well, I think someone made a new market. Oh, yeah?

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Is this mine? I don't know. Mine expired. Oh. Um, the BIP-110 activation, 91 basis points. I think it's probably overpriced. Uh, the, uh, the deadline right now for the mandatory signaling is August 7th. Hmm.

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So August 7th we will get a chain split in all most likelihood. Um, there's an interesting actual question I've been trying to get to the bottom of with Ocean, just in general as a very quick point.

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In the event there's a chain split, they use Datum for their like decentralized, any miner can make a block, but Datum decides what the chain tip is.

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So if there's actually a chain split and they're running the new knots, which is BIP-110 enforcing, is there gonna be multiple endpoints so I could just mine on normal Bitcoin, or if you mine at Ocean, are you de facto mining on BIP-110?

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Because even if you could assemble your own block template, you have to build on the chain tip they provide, to my understanding.

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Would love to learn more, but I think that's an interesting thing that- I would also love-... we're gonna find out soon. I'd also love to learn more. We'll leave it there.

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Becca, Rob, thank you so much for coming on the show. Thanks for having me. Appreciate your time. Thanks. See you later. Thanks, guys. Bye bye. We are gonna keep on rolling.

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I believe we have, let's see, we're doing the Swan Suit dropping. We're gonna do Bitdeer deal. But before that, we have a word from our sponsor, Luxor.

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All right, Charlie, let's dig up some skeletons. Yeah, some skeletons. Open the closet. Because it's June, we're gonna dig up some skeletons. [laughs] Thank God we work in Bitcoin, man. Yeah.

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So just a quick update on a story that we've been tracking for some time at Blockspace, and that is Swan Bitcoin dismisses litigation against Proton and its employees.

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This, this headline could also say that, you know, that the court basically forced them to, to dismiss the case. So,

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uh, to back up here, Swan Bitcoin sued, um, a company or an LLC called Proton Management and its former employees that were involved in its Bitcoin mining operations.

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These were mining operations that Swan had with Tether. And the Proton team basically left Swan, ended up forming Electron, and they left, I believe, at the end of 2024, roughly.

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Uh, or rather, it's almost been two years at this point, actually. Uh, I think roughly August of 2024. And Swan ended up suing them, saying that they stole proprietary information.

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Now, that court case was, uh, ha- had been complicated by the fact that Tether ended up suing Swan in the UK courtAnd so this is coming by way of the UK court, uh, and [chuckles] then getting tied back into the case in California between Swan and Proton.

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There's all of this... It, it's a web- Yeah, yeah. For the, for the listener, th- this has been, this is happening in multiple jurisdictions, different countries. Very, very, very messy case.

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But- And, and it makes it difficult to track, as you think you're following the case in California or not. This is, this particular venue, uh, for the dismissal happened in the UK.

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Yeah, that's what's interesting about this, because ultimately, the UK court, um, is the one that gave the order for them to dismiss their case in California.

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But I'll read here from the PR, quote, "In re- in related litigation in the United Kingdom, Swan ultimately conceded what defendants argued from the beginning.

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Swan does not own any of these alleged proprietary assets, documents, or trade secrets at the core of its California lawsuit. This admission forced Swan to seek dismissal of its own claims in the California litigation.

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The court has now dismissed Swan's entire case against all defendants." Um, so

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the, the crux of this whole, of, of the whole case, when you really peeled back the layers, was the only thing that Swan could really say against Proton was that they had, they had stole proprietary minor management software when the Proton employees left Swan and joined up and started this new company to manage mining assets for Tether.

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And the reason they had to go with that line of argument is because Swan, by its own fundraising docs that we reviewed at Blockspace when we were covering this story, Swan didn't actually own any of the mining assets until it r- until Tether, its mining partner, had recouped its investment in the mining, uh, in, in, the mining joint venture.

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So Swan and Tether had this joint venture. They started deploying hash rate. This was part of Swan's mining business.

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You know, they wanted to give their, their clients the ability to buy Bitcoin miners and earn B- you know, uh, a- and earn Bitcoin that way.

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This was during a kind of explosion in these services during the 2021, 2022 post-China mining ban environment in the US, where Bitcoin mining really took off in the US.

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But if you look at the investment docs that, um, or if you look at some of the presentations that Swan had at the time, they admit in those presentations that

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they actually didn't own any of these assets until Tether had recouped the money that it had put into the joint venture.

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So all that being said, the lawsuit in California between Proton and those prior, uh, employees at Swan has been completely dropped. I'm not sure what this means for Tether's lawsuit against Swan, though.

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I assume this will wrap up sometime soon. I did not see anything about that being concluded. We haven't seen anything about that, that I'm aware. We...

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Blockspace has kind of been the, the forefront of covering specifically the Swan mining, uh, dispute story.

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I mean, from the news today, um, and this is, uh, I'm just reading from the, really just the announcement on the news today, so this is not our reporting. I'm reading from it.

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Um, there, it reads, quote, "In related litigation in the United Kingdom, Swan ultimately conceded what defendants argued from the beginning.

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Swan does not own any of the alleged proprietary assets, documents, or trade secrets at the core of its California lawsuit." So that is what has been ruled in the UK court,

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but they're speaking on the California court, I believe. Correct me if I'm wrong, Colin. [chuckles] Yeah, I mean, this is why we need to get a lawyer on to talk about this- [laughs] Yeah... because there are,

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th- within either lawsuit, there are basically these, uh...

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Because both lawsuits were concurrent with each other, m- certain facts had to be resolved with the California one before the one in, in, in the UK could, could advance, is my understanding.

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That's probably butchering the actual legal ways of it, but the basic idea is because these lawsuits are cross-jurisdictional, but they involve all the same people, their, like, the discovery processes for both lawsuits would inform the other one.

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And so that's why we've gotten what we've got today with this. Yeah. So- And, yeah. And so- The, yeah... the question is just, like, what does that mean for Tether's lawsuit against Swan?

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And, you know, what does this mean for Swan in terms of l- legal bills? I mean, they've had this, uh, with Proton. They have the Tether lawsuit. Um, they're also caught up in Prime Trust's bankruptcy estate.

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Uh, Prime Trust bankruptcy estate is suing Swan, Strike, and a bunch of other companies to try to claw back Bitcoin that were withdrawn shortly before Prime Trust went belly up. So just a lot of messy stuff going on.

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Yeah, and it appears, if I'm interpreting this statement from the Business Wire news today, it reads, "Swan may attempt to reframe its concession and dismissal of its California suit as part of a broader ship and strategy, or a move to other forums or against other defendants.

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However, based upon its concessions in the UK litigation, Swan is permanently prohibited from pursuing these meritless trade secrets claims in any venue." Because that's, that kind of...

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If, if I interpret that correctly, that, that takes a lot of the, Swan's momentum just off the table.

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Um, so- Yeah, I mean, and you have to wonder how much, you know, just totally, m- you know, speaking kinda off the cuff here, but, like, how much ammo do they have left to continue to fund a lawsuit against, you know, former employees if they, and they can't even do that at this point?

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The former employees are now employed basically under, under Tether, so- Yeah... which has infinite money. Yeah. Well, Electron, but yeah, working with- Electron, which is-... working with Tether... Tether, yeah.

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The, or, yeah. But I can't- But I mean, they might be- It might be- They might end up being a consolidated entity with this, um, 21 Capital merger that Tether is, is, is proposing with Strike and with, with Electron, so.

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Yeah.But I just can't imagine that Tether with- who has giant, a giant, uh, treasury and money would want, like, their counterparty perhaps soon to be, uh, employees, uh,

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to have to deal with this when they just wanna mine Bitcoin. So we're gonna wrap up this story, and we're gonna move on to our final story of the day, Bitdeer. But before that, a word from our sponsor, Ligos.

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Let's go and move on to Bitdeer. Bitdeer back in the news, and for this time, a good reason for being in the news.

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They have broken ground on a one hundred and fifty-five million dollar Alberta site pairing ga- uh, with p- uh, with a gas plant for Bitcoin mining.

250
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So this was announced a while ago, I believe, and the straight skinny of it is that they are building out, uh, this Bitcoin mining facility and pairing it with a one hundred and one megawatt natural gas power plant, um, for roughly about a hundred megawatts of data center capacity.

251
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The project is a hundred and fifty-five million dollar investment, and they expect that it will be energized come Q2 2027.

252
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Now, it is going to be a Bitcoin mine first and foremost as they recoup the investment, but they're saying that, you know, we'll, we'll consider it for AI and HPC workloads as everyone is.

253
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I would imagine that that would be probably, you know...

254
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That would be probably the logical conclusion of a place like this, assuming that it actually fits the bill for what you need it to do, uh, for an AI and HPC workload.

255
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Uh, interesting part about this is this is operating under Alberta's Bring Your Own Generation framework, so, like, they have to have on-site power, hence the natural gas.

256
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But they also have an approved ninety-nine megawatt interconnection, so they can curtail if they need to. And I think this is probably part of the reason why Bitdeer was up this week. I think maybe there are some,

257
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generally some favorable opinions on what this site will mean for their ability to furnish AI and HPC loads in the future, especially considering they're bringing their own power with the, with the natural gas plant.

258
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That is going to be, uh, continue to be, I think, a big theme for Bitcoin miners moving into A- AI and HPC.

259
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It's one of the bull theses I've seen from analysts for Keel about the fact that they actually have those coal plants on site in Pennsylvania for their data centers.

260
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Um, once again, natural gas as your backup, uh, or sometimes primary generation, but in this case, behind the meter, natural gas. Man, don't you wish you were, uh, drilling gas in hard to reach zones?

261
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I mean, here's a little context. I know you love some oil and gas. Give it to us, O&G man. So, [clears throat] okay.

262
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Fox Creek, where this is, it's in the Alberta region, which is where a ton of the oil and gas production happens in Canada.

263
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And in fact, if you were to go back and you were to look at, like, specifically, where does all the flaring occur in North America, it happens mostly in the Permian West Texas, up in the Bakken in North Dakota, and in Alberta.

264
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So I would assume that this, in some part, has to do with all of the regionally mispriced or wasted, economically or technically, uh, trap-associated gas in the Alberta region.

265
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You know, it's like all of this, all of this narrative creation and myth-making that the Bitcoin miners did about tapping into, like, free energy, which is true.

266
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It just happens, I think, to be manifesting in the AI play. Now, I don't know if this particular gas plant will, like, pull from this flared gas region, but it's associated gas-heavy.

267
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All, you know, all that is, like, stranded, and if you were able to tap into it, man, a big old AI data s- data center where there's very few people to protest it, where they basically have tons of free energy,

268
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sign me up. So there's your take. I think we'll leave it there. Yeah. Thank you so much for listening to Blockspace Live, coming at you weekdays at 1:00 PM Eastern.

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If you're listening on Coindesk, make sure to subscribe to the Blockspace feed. We are leaving Coindesk very soon. Subscribe to the feed on Blockspace. Search Blockspace on whatever platform you're using. I'm Charlie.

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I'm Colin. And we'll see you tomorrow. [outro music]