
Happy Friday!
Bitcoin just had a decade’s worth of news in a matter of days. It wasn’t enough that the latest dump of the Epstein Files — the biggest yet — had several unfortunate tie-ins to bitcoin.
But bitcoin’s also suffered its fourth worst daily drawdown in history on Thursday.
For today’s letter, we cover the intersection of Epstein and Bitcoin, with some other commentary at the bottom on why Bitcoin’s price collapsed.
Plus, news from Blockspace on:
French officials throwing a wrench into MARA’s plan to dominate France’s AI/HPC sector
AI CAPEX spend isn’t slowing down yet
Bitcoin’s hashrate is primed for its largest adjustment since the China mining ban
Much, much more from this week you missed!
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Everything you need to know about Bitcoin in the Epstein Files
The DOJ dropped the largest batch of the Epstein Files yet this week, and they revealed just how many things the notorious pedophile had his tentacles in – and that includes Bitcoin.
Social media was awash with references to prominent Bitcoiners who were either mentioned in Epstein’s emails, took funding from the sex-offender financier, and/or had direct contact with him over the internet or in person.
To get it out of the way: none of these emails necessarily prove any illegal acts by the people mentioned in this article, nor do they implicate them in any nefarious behavior. Further, Epstein’s ties to Bitcoin do not mean that he – or the Deep State! – created or co-opted Bitcoin. Jeffrey Epstein may be a nonce, but that doesn’t mean he has anything to do with Bitcoin’s nonces.
That said, the emails do show that Epstein invested in early stage Bitcoin companies, and he was in contact with some of the more impactful personas of Bitcoin’s early days.
Why is anyone’s guess, but it probably has a lot to do with Epstein’s attempts to exert influence over anyone and anything of consequence when he was running around unchecked, which includes bleeding edge, far-out new technology.
And with that out of the way, let’s dive into our findings.
Brock Pierce is all over the Epstein Files
Brock Pierce? The former child actor, Mighty Ducks star, and EOS cofounder?
Yes, that Brock Pierce.
The serial crypto entrepreneur and generally-creepy-dude first made contact with Jeffrey Epstein in 2010 by way of Al Seckel, the late illusionist and paramour of Isabel Maxwell, who is the sister of Jeffrey Epstein’s lover-in-chief, Ghislaine Maxwell.
In 2010, Seckel organized the so-called Mindshift Conference on Epstein's Little Saint James island. The conference was one piece of a public relations push to repair Jeffrey Epstein’s reputation following his 2008 conviction in Florida for sexually trafficking a child and soliciting prostitution.
It was a total dud, so much so that Epstein penned a fake email to Seckel, pretending to relay message from an Epstein Foundation member. But Epstein got his first Bitcoin connection out of it: Brock Pierce, who spoke at the event.
Pierce and Epstein maintained a relationship up until Epstein’s death in 2019. During this time, Pierce enjoyed assignations with some of Epstein’s “girls,” took legal advice from Epstein on how to resolve 5 years of tax evasion, introduced Epstein to Steve Bannon, and served as Epstein’s point of contact for personalities in the Bitcoin space, including the Winklevosses.
(If you want a more thorough rundown of the more salacious and dastardly side of Pierce and Epstein’s relationship, I recommend this article on Protos, which covers some of the above in depth; for our purposes, we’ll be more focused on the nexus of Pierce and Epstein's business relationship and their investments in Bitcoin companies).
A few more bits of interesting trivia unearthed by the Epstein files before we get to the meat of it: Pierce tried to purchase Mt. Gox in May 2013, nine months before it collapsed; and in 2014, Pierce also wanted to tap Larry Summers to “get involved” with USDT issuer Tether – which Brock cofounded in 2014 – perhaps to give legitimacy to the project.
Epstein invested in Coinbase via Pierce’s Blockchain Capital
But most notably, Epstein used Brock Pierce’s Blockchain Capital as a surrogate to invest in Coinbase.
Epstein made this Coinbase investment via Blockchain Capital in December 2014. In November 2014, Pierce notified Epstein that Blockchain Capital was planning to invest in Coinbase’s next round, but that he would “need [Epstein’s] permission to let the founder know who [Epstein is]” but that Epstein’s identity “would not be disclosed beyond that.”
Epstein responded,” yes ok,” committing $3 million to the round via Blockchain Capital’s Crypto Currency Partners II, LLC (not to be confused with Crypto Currency Partners II, LP, Blockchain Capital’s public facing fund that invested $200,000 into Coinbase during the same round, per a 2015 investor deck).
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France stalls MARA acquisition of EDF data arm over sovereignty concerns: Bloomberg
The French government has intervened in the planned acquisition of EDF’s data arm by MARA (NASDAQ: MARA) to request a deeper review of the transaction, according to a Bloomberg report. The publication said French authorities asked EDF (Électricité de France) for a more detailed review of options regarding the sale of its unit. Previously, the French Treasury green lit the deal, but the latest intervention puts that approval on pause. - link
Tether invests $100 million in Anchorage Digital
Tether has invested $100 million in crypto bank Anchorage Digital, according to a Thursday press release. The strategic equity investment builds upon an existing partnership where Anchorage serves as the issuer for USA₮, Tether’s compliance-focused stablecoin. - link
Endeavor condemns Mawson poison pill defense amid takeover battle
Endeavor Investor Group issued a statement Wednesday condemning Mawson Infrastructure Group’s (NASDAQ: MIGI) adoption of a stockholder rights plan as a move to protect management at the expense of shareholders. On Monday, Mawson adopted the limited-duration stockholder rights agreement to prevent a takeover without a control premium. - link
Cipher Mining prices $2 billion note offering for Texas data center expansion
Cipher Mining (NASDAQ: CIFR) announced the pricing of $2.0 billion in senior secured notes to fund the completion of its industrial-scale data center in Wink, Texas according to a company press release on Wednesday. - link
TeraWulf surges 10% after 1.5 GW Hawesville, Morgantown acquisitions
Bitcoin miner-turned-AI factory TeraWulf (NASDAQ: WULF) is acquiring two brownfield industrial sites in Hawesville, Kentucky, and Charles County, Maryland, which could expand its gross load capacity by approximately 1.5 GW. - link
Bitcoin difficulty projected to drop 15% as hashprice hits all-time low
Bitcoin is bracing for a historic bitcoin mining difficulty decrease as bitcoin miners are powering down operations at the fastest rate since China’s bitcoin mining ban in 2021. The drop comes as bitcoin plummets below $80,000, driving bitcoin’s hashprice to an all-time low. - link
Cryptography researchers publish witness encryption scheme emulating covenants on Bitcoin
Cryptography research firm allocinit has published the white paper for Bitcoin PIPEs v2, a major update to its scheme that enables covenants and zero-knowledge proofs on Bitcoin without requiring any changes to the protocol’s consensus rules. - link
Tweet of the Week
If you’re wondering WTF is going on with bitcoin, you’re not alone. The best breakdown I’ve seen for what’s driving this historic selloff (and whether we’re close to a bottom) comes from VanEck’s Matthew Sigel. TLDR (although you should read the whole thing), we’re in the midst of a massive deleveraging event, and almost every indicator screams oversold. Take that hopium to the bank, but don’t overdose — we could always go lower.
Blockspace Podcasts
On the latest news roundup, Charlie, Colin, and Matt break down Bitcoin's brutal 50% drawdown and the resulting 13% difficulty adjustment. We dive into the geopolitical tension in France over Mara’s data center acquisition and Tether’s strategic move into Anchorage Digital. We also break down the massive $2 billion debt offering from Cipher Mining that was 6x oversubscribed and TeraWulf's 1.5GW power grab. Whether it's hash price hitting record lows or institutional funds unwinding, we’ve got the pulse on the markets.

If your net worth was just cut in half over a matter of weeks, don’t forget to take care of your physical health, which will go a long way to help you maintain your mental/emotional health. And you don’t even have to go balls-to-the-wall, either. A recent BMJ Medicine study found that consistent, extended-periods of walking was one of the most effective ways to reduce all-cause mortality. Go get those 10,000 steps in, y’all!
-CMH


