 The United States was just downgraded by its credit rating from AAA plus to a whopping AA. And this is actually pretty good for Bitcoin digital assets in the long term. In the short term, it remains to be seen. And what we are talking about is there was a piece from Reuters or Fitch cuts US credit rating to AA plus. The US Treasury calls it arbitrary. And here's what we have. So Fitch today downgraded the US government's top credit rating and drew an angry response from the White House and surprised investors. I got to tell you, I'm pretty shocked that there's actually surprised investors with what's going on with debt. And we'll take a look at that in a second. Traders immediate response was to embark on a safe haven push out of stocks and under government bonds and dollar. Fitch downgraded the US to AA plus from AAA citing fiscal deterioration over the next three years. And actually we're going to take a look at a graph which shows us getting really bad over the 10 year history and repeated down the wire debt ceiling negotiations that threaten the government's ability to pay its bills. So yes, this happened and the response as far as the traders. I mean, it's down a whopping 1.19% which in the crypto market is absolutely nothing. But I mean, for traditional finance, this is like a brutal, a brutal day for them. But you know, if we zoom out over five days, okay, it has gone out a little bit, but over a month still looking pretty good. Six months, not too bad. So again, whenever you have doubts, just zoom out to where we're at right now. Don't just think about the narrative, use your head, take a look at the things and just kind of say, well, this isn't too bad. But that again, isn't the traditional finance. How do we get affected in the crypto market? Not bad. I mean, our total market cap dropped by 0.3%. So there was a little bit of slight uncorrelation, but we still see that Ethereum is down, finance coin, XRP, and a whole host of altcoins, Litecoin 5.6%. Congratulations. I think they just went through their having or just about to happen. But I was kind of surprised this morning because it was so resilient. I took a look at the Bitcoin this morning when I woke up and it's actually up and it was doing pretty darn good at almost 30,000. But you have to remember the whole reason that Bitcoin and digital assets were created, Bitcoin specifically was after the great recession in 2008. And the whole point was to get people out of the traditional finance rat race and get into something a little bit more reliable. Unfortunately, the people that are buying up Bitcoin and digital assets right now are also in traditional finance space. There are the institutions, the hedge funds. So when you see a little bit of a dip in the S&P 500 for a day, where are they going to pull money out of? Well, there's this great market, which is Liquid 24.7365 besides Forex. And it is, again, Bitcoin and crypto. So when you ever see someone like this, it's usually correlated because people just, again, it's just a speculative asset right now for them. And it's going to take them a while to get it beaten their head until they understand that this is actually here for the long haul. So yes, we did go a little bit down today, but not too bad. And then also it talked about treasuries. And if you're in investments, quite honestly, I mean, for T-bills, for government bonds, I mean, why wouldn't you get into this? Look at this. Two months in the treasury yield curve, two months, you're looking at 5.5% return. If you're looking at three months, 5.5, and then 5.5 again in six months, if you go over 30 years, whopping 4% who would do that, but whatever. So yes, the treasuries are looking pretty enticing for them. So they'll get into that. And then also, as far as like debt goes, this is the piece I want to highlight, which is, you know, how they talk about how the traders were very surprised and things like that, it's just amazing to me how people get surprised on things. So this one was from the Kobayashi letter. It states, total US debt levels are expected to rise from 98% of GDP in 2023, which we used to be like 50, 60%. Now with some we're almost 100% of GDP. Our debt is almost 100% of GDP. I had to say that twice because it's even shocking to me. That's in 2023 to 118% of GDP in 2033. By 2053, if we keep going the same way, which we probably will, debt to GDP in the US is expected to hit an alarming 195%. No wonder they downgraded us. We can't pay. How can we pay? How can we this modern monetary theory just keep printing? It doesn't work like that. At some point, the actual bill gets due and you can't print funny money. So if we take a look here, and it shows you just, I mean, look, I'm old and I can remember these days when like the debt to GDP wasn't that bad. I mean, down here, I mean, it was still not the greatest, but it was still a very strong country. I mean, sub 50%. And now just as soon as that pandemic hit, all of a sudden we're just here 118, 120% and going up to 195%. So that is definitely a problem. And then also, as people get into the dollar, the Dixie will go up. But I think at some point that Dixie will start to falter. And right now today, the US dollar index, which is a measure against the basket of other currencies, we're looking at 102.55. And that's up from one of its all-time highs of almost 114. And we took a bigger dip around July. I think we drop below 100 at some point. Here we go in July 14. And now today we're back up at 102. But just as a reminder, when the dollar, when the strength of the dollar goes up, Bitcoin usually goes down. And when the strength of the dollar goes down, Bitcoin usually goes up. There's a nice little graph I put together. I'll link this in the description. And yeah, in 2013, when the Dixie was 83, it was at a high point at that point, Bitcoin was actually 13 bucks. Then in November, 2013, the Dixie went down to 80.11. And Bitcoin went to 11.27. And you can see here the same thing on 2016. Dixie was up, Bitcoin went down to 6.10. Then of course, over here in 2018, Dixie was up again, Bitcoin out of 9,000 as a close of 2017. And then lastly, we can see that again, when Dixie was down here on November 2021, which the Dixie was 112, it was pretty good actually. Bitcoin went up and then Spice versus. So always watch the strength of the dollar because that's what it is. And then lastly, the correlation, we can see that today as far as the Dixie as compared to Bitcoin, as far as correlation, if you're at zero, there's no correlation. If you're at perfect negative, that means that they do the exact opposite. And then in the pluses, it means they pretty much follow those types of things. We can see that Dixie is always negatively correlated. But S&P 500 is usually positively correlated. And we can see down here that it's actually going down just a smidge, but we are still correlated to the market because those people, institutions, hedge funds, want to keep buying up. And then lastly, I will just say this that for the Fed and everything that's going on with inflation and such and such, you're going to hear a lot of stories about oil and the price of oil is going up and just like the worst thing of all time. Just remember though, it's not the production cost of oil itself, it's because of supply cuts. Now, I'm not a macro economist. I just dabble here and there, but just so you know that Russia and OPEC, they came out and said, yeah, we're going to reduce or actually supply for creating oil. So of course, once you reduce the supply and there's still the same amount of demand, you will see that unfortunately prices will go up, which is the same thing that's going to happen with the Bitcoin halving in April of 2024, when the same amount of demand is still there, but we're going to cut supply. And we'll see how that works out. And of course, also, people are talking about how awful oil production is and things like that. And yes, it has gone up quite a bit since July, we can see it. But again, if you just zoom out, right now it's below 80, it was above 80, it was freaking out. If you look over like a past a year or so, you can see that in all honesty, in 2022, we were at almost $100 per barrel. So just keep that in mind when you hear these types of stories that it's all going to be okay. And there we go. So let me know what you think about that in the comments section. And let's finish up with a little crypto news. Yesterday, we had talked about there was a case that was being brought forth to Terraform Labs, which was the creator of Luna. And the federal judge, Jud Rackoff. That's his name. I didn't make it up. He came out and kind of went against the Ripple ruling from Judge Torres. And yesterday, I talked about how this could be bad for Ripple and XRP. And I know I got a lot of hate in the comments. Let me just say this, I get it. Ripple holders, excuse me, XRP holders, you've gotten kicked in the teeth for over a year. You need two years, excuse me. And it's been very tough to hold on and keep that community. And you had a big win not too long ago. And what's not cloud that. So yesterday, when I talked about this, I tried to make it clear, but maybe I didn't, that this is no relevance. It doesn't have any relevance to the case that Judge Torres took over or looked over. And the different decisions that she made, which going forward was in my personal opinion, and a couple of different lawyers out there, it was a win for Ripple. But this piece here, and I'm going to show you, I'm going to show you why I think this is a problem moving forward. And we're going to chime in from Stuart Alderotti and what he says he is the chief legal officer over at Ripple. And we'll just get into this. So again, the federal judge denied stable coin issuer Terraform Labs motion dismiss a lawsuit from the SEC. Judge Jed Rakoff, he was district court for the Southern District of New York, rejected the use of a ruling from Judge Torres, who recently ruled that Ripple Labs did not violate securities laws and making XRP available on secondary platforms for retail investors to purchase. The big distinction was, was that when Ripple sold them to the hedge funds, there was a form of contract. You can go through and you can read what Judge Torres wrote. You can also follow Alderotti, I think I say his name, right? And he says the exact same thing. The difference was, was of course, when you are selling XRP on an exchange, and it's you as an individual and you're selling to another individual, there's no investment contract. That's what Torres says. But the difference was, of course, it just depended on who you were selling it to. Was it a hedge fund? Were you talking to them? Was it directly from Ripple or not? Or was it just from an individual investor? That was the big difference. So an emotion dismiss Terraform argued that people bought UST for practical purposes and did not have an expectation of a being an investment. And that's the thing about law. If you have a one on, you can set Preston over here. So now Luna is trying to say the same thing like, look, we're not responsible. Like this was, this was an investment and they, you know, they knew that there was no expectation of profit or actually being an investment. There was no contract. Attorneys for Terraform also appointed the recent Ripple ruling in which Torres said that while Ripple had violated securities laws and selling XRP to institutional investors, that's what she said, retail investors could not have known they were personally XRP from Ripple because they bought the token on intermediate exchanges. Judge Rakoff stated this, whatever expectation of profit they had could not, according to that court, be ascribed to defendants' efforts. How he makes no such distinction and it makes good sense that a purchaser bought the coins directly from the defendants or instead in a secondary resale transaction has no impact on whether a reasonable individual would objectively view the defendant's actions and statements as evincing a promise of profits based on their efforts. So Rakoff was saying, I'm just going to throw it, I don't really care about that. This is for the Terra Luna case. And yes, I understand that the difference between the Terra Luna case and the Ripple case, which took two years in the Terra Luna case, which is just starting, I understand, I get it. This is what Stuart Alarotti says. Chief legal officer, again, for Ripple. On closer read, the Terra judge actually agrees that orange groves alone are not securities without promises to cultivate the groves and share the profits or, i.e., an investment contract. There needs to be an agreement between contracting parties for there to be an investment contract. A lot of others dive in the Terra judge's comments, including his apparent misreading of the Ripple judge's reasoning. Example, missing the entire point that secondary market traders can't invest money in anyone or anything if they don't know who they're buying from. So the point I was trying to make yesterday was this. Very simply, you can get a judge Torres, because let's be honest, the SEC is going to come through and they are going to appeal this court case. So you can either get a judge like Torres, which really understands what's happening, or you could get a judge like Rackoff. And that's the whole thing with life. You never know what you're going to actually get. You could get somebody who's super competent and someone's like, you know what, I got a lot of things to do is let's just move this forward. So on that piece, it kind of makes me worried because you never know. Because if the SEC comes through and they've already hinted that they're going to appeal this process, this could be an issue down the road. However, the good news is this, when you do an appeal, especially in New York, from what I want to understand as far as the state cases, it could take 12 to 24 months to hear those appeals and get those going. What does that mean for us? Well, let's be honest, in roughly nine months, we are going to go through a Bitcoin halving. We are in 2020 through right now. In 2024, we'll go through the Bitcoin halving. I personally believe that the cycles are still intact. It's been working pretty well for 13 years. We'll see what happens. So by the time this actually gets to the next phase, unfortunately, it's going to be all burdensome for Ripple if SEC does appeal this. In that time, we will probably go through, or let me say this, we will maybe go through a bull run. We don't know if it's going to actually happen. This is what I think is going to happen, but I can be wrong. I've been wrong many a time, just ask my wife. So when we go through this, when this case comes through, maybe at that point, the Bitcoin ETF will actually be approved and we'll be on to a whole another thing. And if it goes positively or negatively or half a win or half a loss, whatever it actually is, in reality, I don't think it's going to make a big deal for this cycle. But again, I could be wrong. Let me know what you think about that in the comment section as I tried to explain this as best I possibly could. Let's move on to kind of some negative stuff, negative but positive. I shouldn't say negative and positive. This is actually, once these guys get burdensome or get brought to justice, it's going to be pretty good. So three arrows capital, one of the co founders, Jeffries says the US court can no longer tell him what to do. So before I move on, the whole thing with three arrows capital, you know, those collapses with FTX and Voyager and Celsius and a host of other ones, it mostly has to do with this group right here and not everything, not everything. But these guys, three arrows capital, they were doing some pretty shady things and they took all of our money. I mean, not all of it, but a big huge chunk of it. And now they're living abroad and valley and these different places, very nice places. And they're buying yachts and they're buying condos and they're buying everything else with your money. And we're trying to get that money back from the courts. And they're like, no, we don't want to do this. So here's what we got. Three arrows capital co founder called Davey said he renounced his US citizenship in that US courts no longer have jurisdiction over him, which is false. US born and raised Davey's renounces US citizenship in 2020 for the avoidance of debt. I am not subjecting myself to or accepting the jurisdiction of the courts in the US, which is hilarious because they're still going to get him. So this came after months of attempts to force Davey's and three arrows capital co founder Suzu to cooperate with the effort to liquidate their failed hedge fund and repay billions to investors. So when we talk about the process of chapter 11, chapter 15, and we're trying to claw back some of these funds, a lot of this is from three arrows capital. And that is Voyager and Celsius and some parts of FTX. If these guys would just stand up and go, you know what, we promised something, we couldn't do it. Here's your money back. I know that sounds super naive to say, but it's just the truth. That's what they did. If this happens, of course, unfortunately, I have to go through the courts, but there wouldn't be so many people with holes in their investment. So their company, what they did is they have assets in the BVI or British Virgin Islands, chapter 15 bankruptcy protection in the US in order to benefit from the legal shields against creditors provided by US bankruptcy. So what they did is they said, we're not US citizens, but we're going to file chapter 15 bankruptcy protection in the BVI to get us these US bankruptcy protections. Amazing how that works. Liquidators asked for Davies to be held in a contempt of court, possibly subject him to a 10,000 per day fine until he responds. Remember, that's your money that he's paying that with. Three AC founders retreated to Bali after costing investors billions with the implosion of their investment fund. And they just don't want to give it back. They're like, no, no, we earned that. Unbelievable. US financial regulators and criminal prosecutors can still issue enforcement actions or pursue indictment of foreign nationals who have committed crimes in the US or are involving US citizens or entities. So even though they renounced their citizenship, it may not matter. And hopefully they get what's coming to them. I'm interested in thinking about that in the comments and then to finish up a couple more pieces. The US government's investing BlackRock for a Chinese investments. This may be nothing, but it is kind of weird in the timing, especially when they just came through and said, we want to do a Bitcoin ETF. So we'll see. And the whole point of this is Americans retirement funds are unwittingly fueling Chinese firms. The US has flagged over security and human rights issues. Lawmakers say House of Reps select committee on the Chinese Communist Party notified BlackRock on Monday of the probes and their activities. The goal of the investigation is to gather facts that would inform the US's China policies, including American capital flows, routing massive flows of American capital. Two such Chinese entities, the US firms are exacerbating an already significant national security threat and undermining American values. Again, this could be nothing, but I just find it as very odd timing as the SEC has just validated their application for a Bitcoin ETF. We'll see how it all plays out. I am still in the impression that this will not get approved, but I sure hope that I'm wrong. And then also, I think this is good news for Bitcoin in general. Brian Armstrong was just going through tweets between him and the former CEO of Twitter, Jack Dorsey. And he goes, look, and Jack's like, why are you not dealing with Bitcoin lighting? Why can't you do that? And Brian Armstrong, the CEO of Coinbase says, we're looking into how to best add lightning. It's nontrivial, but I think we're doing them all for payments, taking off in Bitcoin. Not sure why you think we're ignoring it, but we're doing it. And then Jack says, no doubt Coinbase introduced more people to Bitcoin than anyone else. And then there was a piece here, Rudy says some great news. And then one of the CTO developers came out from a cash app and said, look, if you want to do this, we'll show you exactly how to do it. Brian just DMed me and Brian said, yes, I would love to talk to you. So that would be good news for lightning network and making things work. But I got to tell you, as far as like, if you don't know what the lightning network is, it's a layer two solution that sits on top of Bitcoin. So instead of using things on chain, which can be very expensive, if you do all the transactions on chain, let's say me and you start up a fund or I want to pay you. So we have a channel together. And we do like, let's say 100 different transactions, those just go back and forth and back and forth. I pay you seven, you pay me six. And then I pay you 10, you pay me 15, and then back and forth, back and forth. Until the one point where it's okay, let's settle this transaction on chain, then we pay that fee. And for all those transactions, it's pennies in the dollar. So that's essentially the most simple way that I can put it. And I think it's good because it's cheap. And how cheap is it? This is interesting. James checked the lead analyst at Glassnode states that the median fee rate of the fee charged per one Bitcoin sent across the lightning network is currently 3000 to Toshis, which is equivalent to 84 cents to send 28,800 dollars worth of value, which is a fee of 0.0029%. You know how much I'm paying for all my online transactions from businesses? I'm paying like two to three, two to three and a half percent. Actually, well, sometimes it just it just varies. It doesn't really matter, but PayPal and Stripe, same type of thing. So if I could use Lightning Network, I definitely would. Transaction fees are free to pennies. Transparency full, and of course Visa in the bank, fund availability in milliseconds one day, cross-border payments instant, Visa 57 days and fraud non-business level. So that was a lot of news and hopefully a little bit of time. And that's all we have. I think this is good news for Bitcoin. I never understood why Elon Musk was so big into Dogecoin. And now that everybody's talking about how he's going to use transactions for Dogecoin. But I gotta tell you, when we take a look at the transaction fees, as time goes on and we get more people, it could just right up there, just as with everything else. But that's another video. So that's it for today. So look, if you like today's video, give it a thumbs up, consider subscribing. Everything we talk about is time-sensitive, but that's it for today. So thank you for stopping by. I appreciate you and I'll see you on the next one.