Blockspace: AI & Bitcoin – Episode Summary

Episode Title: NEWS: Block’s Layoffs, Magic Eden Drops BTC + ETH, MARA Gets Serious on AI, Jane Street’s Lawsuit
Date: February 28, 2026
Hosts: Charlie Spears & Colin Harper
Podcast: Blockspace: AI & Bitcoin

Overview

This week’s Blockspace covers seismic shifts at the intersection of Bitcoin, AI, and crypto markets. The primary theme is the disruptive impact of AI on tech and Bitcoin industries—most notably summarized by Block’s (formerly Square) massive workforce layoffs. The episode also dives deep into the unraveling of Magic Eden’s presence in the Bitcoin ordinals market, miner pivots towards AI and HPC compute, and a wild web of theories surrounding Jane Street’s role in Bitcoin price action and a high-profile lawsuit tied to the collapse of Terra’s stablecoin.

Key Topics & Discussion Points

1. Block (Square) Lays Off 40% of Workforce

[00:00–16:40]

• Background: Jack Dorsey’s company Block (formerly Square) announced layoffs amounting to 40% of its workforce (~4,000 out of 10,000).
• Reasoning (via Dorsey's statement): A preemptive move justified by productivity gains from AI tools.
  • “Now it takes maybe one person to do the job of two or three people formerly because of these AI tools.” — Colin Harper [00:33]
  • Stock price jumped 20+% after-hours in response to the cost cutting.
• AI Employment Thesis: Called “the Citrini Thesis” — that AI adoption triggers imminent, larger sector-wide layoffs.
• Employee Severance: Generous package: 20 weeks base, equity through May, six months healthcare, corporate device retention, $5,000 exit bonus.
• Misconceptions addressed: Viral tweet claimed $68M was spent on a single company party before layoffs—a misreading; actual G&A expense included both event and restructuring costs.
• Internal Impact: Layoffs span most segments (Cash App and Square hit hardest).
  • Bitcoin-specialized teams, like Spiral (Bitcoin devs), reportedly untouched.
  • BitKey (wallet group) and Proto (ASIC division) affected to lesser extents.
• Corporate Complexity: Confusing org structure; many “different businesses that should be unified.”
• AI Dilemma: Discussion of broader implications—“Depending on your take, this is either a warning of mass layoffs to come, or just natural tech progression.” — Colin Harper [16:12]

2. Magic Eden Exits Bitcoin Ordinals & EVM Markets

[16:40–25:22]

• Major Scoop: Magic Eden, a dominant NFT/digital asset marketplace, is reportedly shuttering its Bitcoin ordinals and EVM (Ethereum Virtual Machine) related marketplaces, per sources.
• Timeline: Announcement imminent, with wind-down to occur over March–April. Mid-March: export-only phase; April: full shutdown.
  • “...going to shutter their bitcoin ordinals, trading and EVM related marketplaces.” — Charlie Spears [16:50]
• Historical Context:
  • Magic Eden pivoted aggressively to Bitcoin ordinals in 2023 at the ordinal boom and overtook OpenSea/Blur in trading volumes—$700M+ in March 2024 alone.
  • Raised $157M in VC funding, valued at $1.6B (2022) before the ordinals mega-surge.
• Product Fallout: Flagship cross-chain wallet, launched less than two years ago, to be deprecated.
  • “That’s kind of crazy because they really like pushed their wallet. It was a flagship product under two years ago and so sunsetting it is pretty crazy to me.” — Charlie Spears [21:47]
• Market Reaction: Mass exodus—most major ordinals collections went red within 24 hours.
• Future Direction: Speculation that Magic Eden will pivot to “prediction markets” or back to its Solana roots.
  • “If you’re in the gambling industry, you move from flipping JPEGs to prediction markets.” — Colin Harper [19:16]

3. State of Bitcoin Mining: Hash Rate, AI Compute, & Geopolitics

[03:13–09:02; 25:55–41:10]

Hash Rate & Market Update

• Mining Economics: Hash price hit an all-time low ($28/PetaHash/day); Bitcoin’s difficulty increased, squeezing out less profitable miners.
• Weather Impact: Winter storm “Fern” caused dramatic hash rate drops—lowest since mid-2025.
• AI Pivot: Major US miners selling off Bitcoin fleets to make room for more lucrative AI compute.
  • “AI is eating into bitcoin profits domestically... US miners are pivoting to AI. Where’s the hash rate going? Suspicions it’s going to Russia.” — Charlie Spears [07:56]
• Geopolitics: Russia now claims 16.4% of global hash rate, up from 15% the previous year.

GPU Market & AI Compute Migration

Guest Segment: Mike, Luxor Technologies

• AI Compute Complexity: Transitioning from ASICs (for Bitcoin) to GPUs for AI/HPC is a leap in business model complexity.
  • ASICs: plug-and-play, same workload everywhere.
  • GPUs: dynamic, require client development, custom workloads, and business development for monetization.
• Secondary Market: H100/H200 GPUs remain in high demand, even as older hardware can still serve edge/less latency-intensive models.
• Operational Hurdles: Monetization strategy and client network are essential for success—unlike mining, you must have direct customers or cloud partners.
• Data Center Buildouts: “It’s fairly easy to buy a container...[but] proving that you can actually run these systems is what’s going to help you build your business’s reputation.” — Mike, Luxor [35:54]
• Supply Chain Stress: GPU and RAM prices skyrocket—enterprise RAM snapped up by OpenAI/XAI, trickling into consumer scarcity.
• Gamer Corner: “My DDR5 is like quadrupled in the past couple months.” — Charlie Spears [39:44]
• Strategic Approaches: PowerShell (build, lease-out) vs. owned & operated model (full-stack, Tier 3 uptime required).

4. Public Miners: MARA & Cipher Shift to AI/HPC

[41:13–47:57]

• MARA (Marathon):
  • Reports $907M in 2025 revenue.
  • Announces a JV with Starwood Capital to retrofit sites for AI/HPC compute (targeting ~1GW, scalable to 2.5+GW).
  • Acquires controlling stake in French data center Exion—expanding global AI infrastructure.
  • Interpreted as MARA “finally joining” the AI pivot after a year of resistance.
• Cipher Digital (formerly Cipher Mining):
  • Sells off mining sites to Canaan; rebrands and pivots into AI/HPC.
  • Announces intent to fully divest all Bitcoin holdings by 2026.
  • “It’s getting serious when they’re deciding to sell their Bitcoin treasuries... One of the early bull cases for these Bitcoin miners...was that they were proxies to Bitcoin exposure... Now that correlation is breaking down.” — Colin Harper [47:57]
  • BitDeer also fully sells its Bitcoin holdings.
• Big Trend: Miners are using treasury sales to fund the transition into AI compute and reduce exposure to Bitcoin price volatility.

5. The Jane Street Lawsuit & Market Conspiracies

[49:32–59:27]

• Lawsuit Overview: Jane Street is named by the Terraform estate in a high-profile lawsuit, accused of using insider info (via ex-Terraform intern) to trigger the historic UST depegging.
  • “Right after they withdrew $150M [from a Curve pool], Jane Street then sold $85M UST...tanked the UST price to about 80 cents.” — Colin Harper [53:00]
  • Redacted profits: the lawsuit doesn’t make it clear how (or how much) Jane Street gained.
  • However, blockchain transparency makes it plausible Jane Street simply reacted to on-chain activity rather than used confidential info.
• Conspiracist Theories:
  • Wild speculation that Jane Street’s ETF market participation allows them to “dump” spot Bitcoin and depress the price, especially after the lawsuit came to light and coincided with a price bounce.
  • “There’s nothing to actually link these two things... This really is... wacky conspiracy territory.” — Colin Harper [56:15]
  • SBF (Sam Bankman-Fried) is ex-Jane Street, adding “fuel” for theorists.
• Host Rebuttal:
  • “You’re trying to connect dots where... the simple answer’s way clearer: People [are just] selling bitcoin.” — Charlie Spears [58:21]
  • The price action likely has more to do with risk rotations and ETF flows than dark shadow games.

6. Cry Corner & Saylor/Strategy Short Interest

[59:27–end]

• Strategy, Inc. (Michael Saylor): Now the most-shorted large-cap stock on Wall Street, with 14% short interest by market cap.
  • “Is that really true?... Short squeeze incoming or... Holy, it’s starting to get real.” — Colin Harper [59:53]
• Media Critique: Blockspace calls out misleading headlines from other outlets misclassifying mining outfits as “treasury” companies.

Notable Quotes & Memorable Moments

• “AI is coming for your job. It already took 40% of Block’s workforce.” — Charlie Spears [00:47]
• “This is either a warning of mass layoffs to come, or just natural tech progression and, you know, adapt or die.” — Colin Harper [16:12]
• “If you’re in Bitcoin long enough, you start a podcast. If you’re in crypto long enough, eventually you go into prediction markets or stablecoins.” — Charlie Spears [18:24]
• “Hash price is sitting at a very depressing $28.71 per peta hash per day...just recently in the last week, it set an all time low.” — Colin Harper [03:53]
• “There are suspicions [hashrate is] going to Russia. ...This has big geopolitical implications and also plays into the AI narrative.” — Charlie Spears [08:07]
• “With AI compute, your counterparty is equally as important as your hardware.” — Mike, Luxor [32:39]
• “Every time I think that price inflation [on GPUs] is going to stop, it goes up.” — Mike [39:51]
• “BlackRock isn’t suppressing the price. People are probably trading IBIT options and like doing some kind of weird hedging shenanigans.” — Charlie Spears [58:21]
• “Strategy World is amazing... all the rides are just Saylor ranting at you about why you should sell your house and mortgage it or whatever to buy Bitcoin.” — Colin Harper [60:51]

Timestamps for Key Segments

• Block layoffs & AI workforce impacts: 00:00–16:40
• Magic Eden’s exit from ordinals/EVM & DeFi: 16:40–25:22
• Mining metrics, hash rate geopolitics: 03:13–09:02
• GPU/AI market deep dive (w/ Luxor): 25:55–41:10
• Public miners earnings & AI pivots: 41:13–47:57
• Jane Street lawsuit & conspiracies: 49:32–59:27
• Cry Corner (Saylor/Strategy shorts): 59:27–end

Conclusion

This episode provides a candid, sometimes irreverent, look at how AI is increasingly encroaching on both tech jobs and Bitcoin mining economics, while major players in fintech (Block), mining (MARA, Cipher), and marketplaces (Magic Eden) rapidly pivot or collapse in response. Conspiracies abound, but the hosts cut through the noise, urging listeners to focus on structural trends—the AI shift, hash rate migration, and capital rotation—not just Twitter drama.

Blockspace Media – Subscribe and catch future episodes