California. America’s longest state. Well, actually third-longest, after Texas and Alaska.

But California is that beautiful region stretching like taffy along our western coast, dotted with palm trees and constantly threatening to break off into the Pacific Ocean.

But when Californians aren’t bracing for the latest earthquake or devising new ways to underdress for nice restaurants, it’s a state with a focus on tech.

From San Francisco to Silicon Valley, California’s always rolling out the latest developments that will shape tech consumption for the rest of America.

And now, finally, California’s turning a legislative eye to crypto. But can its new crypto law change the fate of the entire nation?

Espresso Shots

☕️ Bitcoin Past $31k

The price of Bitcoin has risen past $31,000, its highest price point since last July.

This recent rally is most likely driven by optimism surrounding the coming approval of the Bitcoin Spot ETFs.

Analysts from JP Morgan have indicated that a Bitcoin Spot ETF could be approved by this Christmas.

And if Bitcoin continues to trend upward, the price hike will be accelerated by options dealers that will have to buy Bitcoin on the spot market to hedge their positions.

"At its peak around $32,500, almost $20 million of BTC will need to be purchased by options dealers for every 1% move up to stay delta neutral," said Galaxy Research Head Alex Thorn in a market report covered by CoinDesk. "The positioning implies that market makers need to buy back increasing amounts of delta as spot moves higher, which should add to the explosiveness of any move in the short term."

If Bitcoin manages to rally through the rest of October, the coin’s success will undoubtedly culminate in a celebratory, pumpkin-spice-latte-fueled fall photo shoot.

☕️ Mining Beats Bitcoin

Crypto mining stocks have outpaced Bitcoin this year, based on data from CoinGecko.

And it’s not that Bitcoin is struggling — Bitcoin went up 84.61% this year.

But Bitcoin’s rise was almost doubled by crypto miners. Based on a pool of eleven crypto mining firms, there was an average stock increase of 148.59%.

This trend was most likely brought about, ironically, by the increase in Bitcoin’s price, as well as a shifting focus to ordinals and market-wide anticipation of the Bitcoin spot ETFs.

This development may give Bitcoin a serious case of “miner’s envy,” a condition that had previously only afflicted gnomes, dwarves, and West Virginians.

☕️ AI in Space

NASA is preparing the Nancy Grace Roman Telescope for a 2027 launch to study dark matter and, and investigate the possibility for life beyond Earth.

This deep space telescope will acquire massive amounts of data. And when it comes to managing all that data, NASA is turning to AI.

“There's all this interesting technology development that has to be done on the back end by people to figure out what you do when you collect data this quickly,” Dr. Dominic Benford, a program scientist for the Nancy Grace Roman mission, told Decrypt. “It's a ‘big data’ kind of problem.”

However, this isn’t NASA’s first implementation of AI. NASA is already using a Bright Transient Survey (BTS) bot to monitor the cosmos for supernovas.

As NASA and AI further their relationship, NASA has made sure that semi-sentient AI captains will know when it’s appropriate to “open the pod bay doors.”

Polled Brew

Spilling the Beans

Crypto’s California Dream 🐻 🏄‍♂️

Part of what makes America so wonderfully, terribly complicated is that we’re not just a country. We’re 50 states with a couple of new territories along for the ride.

If you’re a tourist in America, you’d probably be struck by the vast, cultural and societal differences between Birmingham, Alabama and Burlington, Vermont.

Some regions in our country are so wildly different it feels like they’re different nations altogether.

That’s why we’re a republic, with both state and federal laws, so our strange little regions can be governed accordingly.

And depending on how you measure progress, that means that every state is going to be at different benchmarks on every major issue, whether that be reproductive rights, marijuana legalization, or whether you’re allowed to pump your own gas.

And like any piece of controversy, the states radically differ on their outlooks on crypto.

You might think that New York or Massachusetts, some of our oldest and most densely populated states, would be the most forward-thinking when it comes to crypto.

But actually, New England and the rest of the country have been outpaced by Florida when it comes to crypto legislation.

And, whether you agree with his politics or not, a lot of that is thanks to Florida’s pro-crypto governor, Ron DeSantis.

But a new challenger is entering the arena, the state that got the whole country into avocado toast and long skateboards: California.

On October 13, California Governor Gavin Newsom signed a bill called the “Digital Financial Assets Law,” which will go into effect on July 1, 2025.

In short, this is California’s answer to New York’s BitLicense, a regulatory framework for crypto licensing within the state.

Somewhat controversially, this California law wouldn’t only create a licensing framework, it would also require stablecoin issuers to have a bank charter.

And in its current state, the bill will need a fair bit of tinkering before it's ready for public release.

As Gavin Newsom wrote in his letter regarding the signing, “Ambiguity of certain terms and the scope of this bill will require further refinement in both the regulatory process and in statute to provide clarity to both consumers, regulators and businesses subject to this new licensure framework,” in short, common-sense actions will have to take place to protect customers and investors.

And this framework will be continuously edited and perfected in collaboration with California’s Department of Financial Protection (DFPI).

Now, we know there’s nothing particularly sexy about licensing frameworks. And yes, it’s going to be quite a few years before this new law goes into effect.

But the establishment of clear, comprehensive ground rules has been one of the largest missing pieces in American adoption.

And, as we’ve mentioned, because this is a country comprised of states, adoption is going to happen at different speeds across the country.

But California, like New York, is a huge grab for crypto.

Say what you want about the coastal elite, but we look to New York and California, our cultural hubs, to see which way the future of the country is headed.

Hey, we don’t make the rules, but the rest of the country doesn’t usually look to Florida for tips on how to conduct themselves. And that seems to extend to crypto regulation.

Unfortunately, Florida’s leaked one too many stories about bath salts and gator fights to be taken seriously as a tastemaker.

But California’s been established as America’s cool kid with relaxed parents. Just look at marijuana legalization. Marijuana’s West Coast success led to a trickle-down effect for the rest of the country.

Now my retired parents are just one of the many cars lining up around the block at their Southern Maryland dispensary, a region that previously treated marijuana smokers like medieval witches.

In the cliquey, high school cafeteria of American culture, California’s a trendsetter. Hopefully, these beginning steps toward crypto acceptance will be echoed across the country as implicit peer pressure sets in.

Maybe even Delaware will become confident enough to establish a crypto-licensing regime.

Then we won’t have to listen to any more stories about Delaware’s “Canadian-Model Girlfriend” that it “met at camp.”

Crypto 101

AI Agent: Artificial intelligence built upon an existing coding language, such as GPT-3.

AI agents are designed to think independently. Not just to answer user prompts, but to learn and adapt to new situations. Self-driving cars are a prime example of AI agents.

The Last Sip

The Last Sip: Yes, Bitcoin’s been performing very well this October, but with the more impressive surge from crypto mining companies, it may still be suffering from a bad case of that “miner’s envy.” If it’s too much for Bitcoin to bear, we recommend the “Balrog of Moria” method. This involves displacing the current miners with a fire whip and installing yourself as Dark Lord Under the Mountain.

Stay Caffeinated,

Coffee & Crypto Team

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