📌 MUST READS

Amidst all the hustle and bustle of the crypto scene, let's take a quick moment to appreciate bitcoin for what it is at its core: a hedge against the volatility and corruption of traditional fiat systems.

Today, we give you two recent examples:

Turkey:
Bitcoin prices are soaring to new ATH’s against the Lira on local exchanges. In fact, BTC was recently trading ~1.3% higher on Turkey's largest exchange than in the rest of the world.

The reason? The nation's currency, the Lira, has dropped a staggering ~30% against the U.S. dollar since January.

Last week, to battle its whopping ~40% inflation rate, Turkey hiked up its interest rates to a solid 17.5%. Tough times indeed.

Japan:
Japan is also seeing a surge in BTC investing.

Looking closely, the total trading volume on Japanese exchanges rose to $4 billion in June alone, marking to a 60% YTD surge. And in case you were thinking it was just Asia in general, it’s not, as Korea is down more than 25% over the same period.

Couple this with the fact that the share of bitcoin trade volume on Japanese exchanges is currently at 80% and it’s safe to say Japan is making a significant push into BTC.

But, why the rush?

Because since the Fed started aggressively hiking rates, the Japanese yen has been depreciated sharply (6.3% against the U.S. dollar), registering one of the most severe exchange rate turbulence on record.

In similar fashion with Turkey, BTC has traded at an average premium ranging between 0.5% and 1.25% on Japanese markets this year.
Bottom line: While fiat currencies around the world are fighting inflation and shackling people with sky-high interest rates… bitcoin still stands as a viable solution and alternative.

🔎 DEEP DIVES

We don’t need to go into the details. It’s quite obvious that AI is the hot thing right now.

You might even say that AI is what crypto was in 2018.

Whether it is companies, venture funds, or your nutty uncle, everyone is trying to convince you they are “in” on AI in some way.

And, yes, that includes crypto companies.

You’d be remiss not to think this is just another Long Island Blockchain moment. Remember them? The company that changed its name from Long Island Iced Tea Corp to Long Island Blockchain in order to pump its stock price and was ultimately shut down by the SEC?

We are in the early stages of that exactly. So much so that we even have crypto companies pivoting their brands away from crypto to highlight how they are focusing on AI.

And so this week when we saw that HIVE Blockchain Technologies (HIVE) was changing its name to HIVE Digital Technologies (HIVE) to pursue AI projects, our first instinct was to roll our eyes.

But read further and dig deeper, and the move might actually make sense. Let us explain…

The Mad Dash For GPU Chips
The crypto mining process on face value is a fairly simple one.

You buy a lot of expensive chips (GPUs & ASICs), add electricity, and poof, magic internet money appears.

Obviously it’s a little more complex than that, but for explanation, it’s close enough.

The goal for the miner is to make the right side of the equation higher than the left. That is, to make a profit.

But because miners get paid in the crypto they mine, when crypto prices are low, the cost of mining exceeds the value of the reward.

Now for some miners, such as Hut 8, that is fine. They believe so much that the future price of BTC will be worth more that they are willing to take a short term loss. But at the end of the day, if the crypto miner can make more money allocating their chips and electricity to something other than crypto, why wouldn’t they?

And that’s precisely where we are today.

As the whole world is shifting to AI, it needs as many high powered chips as it can get its hands on.

Simply put, high-end computer chips are the new oil.

And if that’s the case, then crypto miners are sitting on a gusher.

As we explained above, crypto miners for years have been hoarding chips in order to mine crypto. And just when it was starting to look like shutting off GPU miners was the best move with faltering crypto prices, AI emerged, giving miners a perfect pivot.

Now, here is where we should note that not every miner will be able to pivot. That’s because the kinds of chips that are needed to train AI models are not the same kind of chips needed to mine Bitcoin (ASICs). The kinds of chips needed are GPUs. Most miners have these, but not all.

But regardless, all of these miners have everything else that is needed in place to pivot – management, energy, real estate (sometimes close to a renewable energy source such as hydropower), and supply chains to procure more chips.

So, Who’s Pivoting?

TWEET OF THE WEEK

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