The Breakdown

Latest Episodes:

Why Is the Fed so Scared of Stablecoins? Aug 21, 2021

Show notes

On this edition of “The Breakdown’s Weekly Recap,” NLW looks at:

News that Brian Brooks left Binance.US after a fundraise proved unsuccessful
Why Coinbase is investing $500B in crypto
The Fed’s discussion of stablecoins at last month’s FOMC meeting
Which nations rank atop Chainalysis’ new adoption index

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“The Breakdown” is written, produced by and features NLW, with editing by Rob Mitchell and additional production support by Eleanor Pahl. Adam B. Levine is our executive producer and our theme music is “Countdown” by Neon Beach. The music you heard today behind our sponsor is “Only in Time” by Abloom. Image credit: Al Drago/Bloomberg/Getty Images, modified by CoinDesk.

What's Really Going on With OnlyFans and Payment Censorship Aug 21, 2021

Show notes

The tyranny of payment processors as moral barometers strikes again. On Thursday, Axios revealed that OnlyFans was struggling to raise money from outside investors despite being on track to make more than a billion dollars this year. Later in the afternoon, OnlyFans announced it is eliminating sexually explicit content from its platform.

The internet was agog, given that OnlyFans’s success is almost entirely based on sexually explicit content. In this episode, NLW explores the variety of things going on behind the scenes, connects the dots to Chase Bank’s shutdown of Compass Mining’s accounts and argues that payment processors shouldn’t be in charge of societal decisions about what free people are allowed to do.

“The Breakdown” is written, produced by and features NLW, with editing by Rob Mitchell and additional production support by Eleanor Pahl. Adam B. Levine is our executive producer and our theme music is “Countdown” by Neon Beach. The music you heard today behind our sponsor is “Tidal Wave” by BRASKO. Image credit: Gabby Jones/Bloomberg/Getty Images, modified by CoinDesk.

DeFi Grows in Institutional and Regulatory Importance Aug 20, 2021

Show notes

First, on the Brief:

Banks and bitcoin
Coinbase’s cash reserves
Brian Quintenz’s CFTC departure

In the main discussion, NLW addresses decentralized finance’s (DeFi) place in regulations as crypto continues to be on the minds of policymakers. Contention across U.S. regulatory bodies remains as the Federal Reserve’s concern with stablecoins, the Treasury Dept. with the infrastructure bill and the Securities and Exchange Commission’s Gary Gensler attempting to create the broadest reach on crypto regulations his organization can manage.

In The Wall Street Journal’s recent interview with Gary Gensler, the SEC chair claimed a particular focus on DeFi. He stated that core software developers, promoters and sponsors would be centralizing factors, calling the term DeFi a “misnomer.”

How will DeFi’s future unfold as it becomes increasingly important for both investors and regulators?

“The Breakdown” is written, produced by and features NLW, with editing by Rob Mitchell and additional production support by Eleanor Pahl. Adam B. Levine is our executive producer and our theme music is “Countdown” by Neon Beach. The music you heard today behind our sponsor is “Only in Time” by Abloom. Image credit: Feodora Chiosea/iStock/Getty Images Plus, modified by CoinDesk.

Is Twitter Getting Serious About Decentralized Social Media? Aug 19, 2021

Show notes

On this episode of “The Breakdown:”

Corporate dips into decentralized media, starting with Twitter and TikTok
Regulatory difficulties continue for Binance
Crypto on the minds of Congress and the SEC

Big corporations have been seeing crypto not just as a hype machine, but as a technological update opportunity. Twitter, for example, has found a new lead for its decentralized social media group Bluesky. TikTok has similarly dipped into decentralized media as it struck a deal with decentralized music app Audius. Which platforms will take on crypto next?

Binance continues to come under regulatory scrutiny with the Netherlands as the latest country to issue a warning to the company. Even after CEO Brian Brooks left the company citing “differences in strategic direction,” Binance founder Changpeng “CZ” Zhao claims to continue to search for regulatory-minded people to join the company’s ranks.

Regulatory focus continues in the U.S. as well, with members of the Securities and Exchange Commission, Commodity Futures Trading Commission and Congress hosting opposing opinions on how to regulate crypto. The disagreements continued this week, including a statement from the Fed’s Neel Kashkari bashing crypto and a letter from two congressmen requesting clarity from the SEC and CFTC. Will U.S. authorities ultimately come to an agreement on the best path forward?

“The Breakdown” is written, produced by and features NLW, with editing by Rob Mitchell and additional production support by Eleanor Pahl. Adam B. Levine is our executive producer and our theme music is “Countdown” by Neon Beach. The music you heard today behind our sponsor is “Tidal Wave” by BRASKO. Image credit: Cole Burston/Bloomberg/Getty Images, modified by CoinDesk.

Innovation vs. ‘The Big Short’: Cathie Wood and Michael Burry's Battle Frames the Potential Futures of Markets Aug 18, 2021

Show notes

Investors Cathie Wood and Michael Burry are predicting opposing outcomes for the recent high inflation rate. On this episode of “The Breakdown,” NLW explores:

Michael Burry’s background and principles
Cathie Wood’s ARK Investment and its strategies
Burry’s bet against ARK

Michael Burry, the main subject of “The Big Short,” has built his career betting on bubbles. Notably, he shorted Tesla in 2020 and took a negative stance against Elon Musk’s bitcoin boasts. He predicted an upcoming “mother of all crashes” for crypto, which has yet to occur.

On the other end of the spectrum is Cathie Wood, long-time Tesla supporter and champion of bitcoin on Wall Street. Her fund, ARK Investment, focused on disruptive tech innovation and 2020 saw her flagship exchange-traded fund rise to become the world’s largest.

Their opposing strategies have reached a critical point as news broke that Burry has shorted ARK, prompting Wood to launch into a Twitter thread to defend her fund’s beliefs. Only time and markets will be the judge of which investor’s fundamentals win in the end.

“The Breakdown” is written, produced by and features NLW, with editing by Rob Mitchell and additional production support by Eleanor Pahl. Adam B. Levine is our executive producer and our theme music is “Countdown” by Neon Beach. The music you heard today behind our sponsor is “Only in Time” by Abloom. Image credit: Astrid Stawiarz/Stringer/Getty Images Entertainment and Alex Flynn/Bloomberg/Getty Images, modified by CoinDesk.

WTF Happened in 1971? (And in Afghanistan?) Aug 17, 2021

Show notes

On this episode of “The Breakdown,” host NLW takes a step back from the nitty-gritty of markets and politics to examine current events from the global macro perspective, including:

The 50th anniversary of the “Nixon Shock” – aka the end of the gold standard
Afghanistan news and the fall of Kabul

This weekend marked the 50th anniversary of when President Richard Nixon decoupled the USD from the gold standard. That event in 1971, which upended the world of finance, contributed in a large way to the rise of cryptocurrencies.

The site “WTF Happened In 1971?” has chronicled the impacts of Nixon’s decision in the years since with extensive data covering wages, productivity and more. Can 50 years of financial transformations be traced back to one event?

In global news, the Afghan government’s struggle against the Taliban has reached a critical point as Taliban forces have taken Kabul, the capital. The news comes after the U.S. withdrew its troops after a 20-year war. This global event is bound to affect the financial system, but it also has ties to cryptocurrencies as they are a new, completely external tool to provide citizens in tumultuous regions agency over their money in a way that has never been possible before.

“The Breakdown” is written, produced by and features NLW, with editing by Rob Mitchell and additional production support by Eleanor Pahl. Adam B. Levine is our executive producer and our theme music is “Countdown” by Neon Beach. The music you heard today behind our sponsor is “Only in Time” by Abloom. Image credit: Paula Bronstein/Stringer/Getty Images News, modified by CoinDesk.

Why Bitcoin Matters for Nigeria and Iraq Aug 15, 2021

Show notes

On this week’s “Long Reads Sunday,” NLW reads:

“How Crypto Can Help Nigeria’s Economy” by Olumide Adesina
“The Inevitability of Crypto in Iraq” by Abdurrahman Bapir

“The Breakdown” is written, produced by and features NLW, with editing by Rob Mitchell and additional production support by Eleanor Pahl. Adam B. Levine is our executive producer and our theme music is “Countdown” by Neon Beach. The music you heard today behind our sponsor is “Only in Time” by Abloom. Image credit: Golden_Brown/iStock/Getty Images Plus, modified by CoinDesk.

Is the US Government at War With Itself Over Crypto Regulatory Authority? Aug 14, 2021

Show notes

On this week’s “Breakdown Weekly Recap,” NLW looks at some reported emerging tension around which U.S. regulatory body holds authority over crypto.

The U.S. Treasury has revealed its heavy hand in the infrastructure bill process, and it isn’t the first Treasury Department to have a problem with crypto. SEC Chair Gary Gensler is asking Sen. Elizabeth Warren for more authority for his organization. Meanwhile, the CFTC is publicly saying regulatory authority lies with it, not the SEC.

“The Breakdown” is written, produced by and features NLW, with editing by Rob Mitchell and additional production support by Eleanor Pahl. Adam B. Levine is our executive producer and our theme music is “Countdown” by Neon Beach. The music you heard today behind our sponsor is “Tidal Wave” by BRASKO. Image credit: Andrew Harrer/Bloomberg/Getty Images, modified by CoinDesk.

These North American Bitcoin Firms Mined 59% More Bitcoin in July Aug 14, 2021

Show notes

On this episode of “The Breakdown:”

Bitcoin mining bump
Coinbase’s massive Q2 earnings and more institutional news
Crypto tax companies popping up

North American bitcoin mining companies saw a significant increase from the previous month. Contributing to this increase is the downward difficulty adjustment, a built-in and automatic Bitcoin feature that incentivizes more miners to join the network. The adjustment came after China’s crackdown on their miners and a subsequent drop in hashrate. Is this mining success bullish for bitcoin?

Coinbase’s Q2 earnings report revealed a successful quarter with a bigger portion of trading volume attributed to institutional over retail. Additionally, ethereum surpassed bitcoin in trading volume for the first time. Will these trends continue?

With regulatory pressure on the horizon, several new crypto tax companies are being formed (and venture capital-backed) to fill the gap. Crypto presents new complexities for reporting and the tax implications of the U.S. infrastructure bill are imminent. Will these companies be able to find a solution when it’s tax time?

“The Breakdown” is written, produced by and features NLW, with editing by Rob Mitchell and additional production support by Eleanor Pahl. Adam B. Levine is our executive producer and our theme music is “Countdown” by Neon Beach. The music you heard today behind our sponsor is “Only in Time” by Abloom. Image credit: eclipse_images/iStock/Getty Images Plus, modified by CoinDesk.

Turning Point: The Crypto Industry's Battle Against the Infrastructure Bill, Feat. Jake Chervinsky Aug 13, 2021

Show notes

Jake Chervinsky is the general counsel for Compound Labs and DeFi lead at the Blockchain Association. Over the last few weeks he has been deeply involved in the battle against the onerous crypto provision in the infrastructure bill.

In this discussion with NLW, Jake provides a blow-by-blow overview and insider's account of the battle, from first learning of the provision to the moment that a senator’s special interest broke the bill. Finally, they discuss what the legacy of this event will be for the crypto industry and why we’re likely to be stronger now than ever.

“The Breakdown” is written, produced by and features NLW, with editing by Rob Mitchell and additional production support by Eleanor Pahl. Adam B. Levine is our executive producer and our theme music is “Countdown” by Neon Beach. The music you heard today behind our sponsor is “Tidal Wave” by BRASKO. Image credit: uzenzen/iStock/Getty Images Plus, modified by CoinDesk.

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