The Breakdown

Latest Episodes:

Everything You Need to Know About Elon, Jack and Cathie’s Bitcoin Chat Jul 23, 2021

Show notes

On this episode of “The Breakdown,” host NLW dissects a highly-anticipated discussion between Cathie Wood, Jack Dorsey and Elon Musk at yesterday’s “The B Word” conference, including:

Wood’s predictions of deflation rather than inflation
Dorsey’s unwavering belief in bitcoin as the internet’s native money
Musk reveals he, Tesla, and SpaceX all hold bitcoin

Wood, one of the earliest Wall Street investors to get into crypto, has been through enough market cycles to have a nuanced understanding of the space. She revived one of her long-standing themes of Bitcoin’s rules-based monetary policy, especially relevant now as central banks operate on unbounded monetary policy. She also touched on recent inflationary concerns, specifically ARK’s belief that deflationary concerns are likely to emerge in the long-term.

Twitter and Square CEO Dorsey has been a consistent ally to Bitcoin. Dorsey highlighted a few of his projects dedicated to a more decentralized future, including Square’s upcoming self-custody hardware wallet and Bluesky, a project to develop an open and decentralized social media platform.

The controversial Musk's contributions to the discussion garnered mixed reactions from the community. Most notably was his admission that outside of Tesla and SpaceX shares, bitcoin is his biggest investment. Additionally, his now-famous statement “I pump but I don’t dump” was backed by his revelation that SpaceX, in addition to Tesla, held BTC. He affirmed the three have never sold their BTC holdings.

While Wood recruits institutional investors and Dorsey builds tools to improve the space, what is Musk’s role in helping or hindering Bitcoin?

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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 “Razor Red” by Sam Barsh. Image credit: Screenshot from The B Word, modified by CoinDesk.

Bitcoin Reclaims $30K as the Macro Discussion Shifts From Inflation to COVID-19 to Growth Jul 22, 2021

Show notes

Bitcoin is up just over 7% in the last 24 hours, following its first close below $30,000 since New Year’s Day. On this episode of “The Breakdown,” NLW proposes possible explanations for this reversal, including:

Competing concerns of Inflation and slow post-COVID recovery
Institutional interest in crypto

A few weeks ago, headlines were centered around markets being nervous about inflation. Emergence of the Delta variant and its induced lockdowns, coupled with reports of unexpectedly slow growth in Q2 in China, casts doubt on the inflation concerns. Which concern will prevail and drive the next macro narrative?

Many speculated non-fungible tokens would be a fleeting phenomenon, in fashion for a short period of time and then fading away. However, an investment round for NFT platform OpenSea raised $100 million. Is OpenSea’s success an indicator of renewed long-term investor confidence in crypto?

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: Nuthawut Somsuk/iStock/Getty Images Plus, modified by CoinDesk.

So THIS Is ‘And Then They Fight You’ Jul 21, 2021

Show notes

“First they ignore you, then they laugh at you, then they fight you and then you win.”

In this episode of “The Breakdown,” NLW examines crypto’s current “and then they fight you” phase, citing recent regulatory battles:

A New Jersey Bureau of Securities order calls for BlockFi to stop accepting new clients residing in the state. CEO Zach Prince remains optimistic, believing the company’s products are lawful and that further discourse with regulators would clear up concerns, the most important of which seems to be surrounding yield delivery. Is a new macro narrative emerging as competition ramps up with high yield enticing new crypto users?

In a meeting with the President’s Working Group on Financial Markets, attendees discussed the rapid growth of stablecoins and their risks and benefits for the future. Of the eight political and regulatory figures in attendance, who are likely to provide pro-stablecoin input?

This morning, an incendiary headline dropped – “EU Aims to Ban Anonymous Crypto Asset Wallets” – following a European Commission release. Is the severity of the commission’s reform as fierce as the headline suggests?

Will DAOs Break the Power of Venture Capitalists? Jul 20, 2021

Show notes

In addition to the deep dive into distributed autonomous organizations, or DAOs, and their future in venture capital, today’s “The Brief” covers:

Bitcoin futures trading approved for some Bank of America clients
Stablecoin discussions entering the upper echelons of U.S. government
The bubble continuing to inflate as markets roll over historical indicators

SushiSwap, the decentralized exchange based on Uniswap, is proposing to sell a portion of its treasury to venture firms as part of a broader diversification plan. The community finds itself torn in half over the announcement, with some advocating for the benefits of seasoned expertise and others vehemently denying the need for institutional investors.

SushiSwap’s “VC-versus-community” debate provides a case study on the growing world and strength of DAOs. VCs have previously held the essentially sole power over the fate of startups, but in the case of SushiSwap, they are now forced to be in open negotiation with the community.

This power shift presents a window into the vitality of DAOs, stemming from their democratic and global nature, dynamism and anonymity. Will DAOs succeed as the internet native form of organization?

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: BrianAJackson/iStock/Getty Images, modified by CoinDesk.

Why Governments Should Invest in Bitcoin Infrastructure Jul 18, 2021

Show notes

This week’s “Long Reads Sunday” is a reading of “Bitcoin: An Orange New Deal” by Andrew Bailey and Bradley Rettler.

Paraguay's Leaked Crypto Law: Depressing Dud or Too Early to Tell? Jul 17, 2021

Show notes

On this edition of the “Weekly Recap,” NLW covers:

The latest in Binance’s global regulatory troubles
Leaked crypto legislation from Paraguay
Capital Group’s big bet on MicroStrategy
The U.K.’s Financial Conduct Authority slated to spend £11M on an anti-crypto campaign for young people

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: naruedom/iStock/Getty Images Plus, modified by CoinDesk.

Square Sets Out to Bring DeFi to Bitcoin Jul 17, 2021

Show notes

Square has announced a new initiative, titled “TBD,” that CEO Jack Dorsey describes as “focused on building an open developer platform with the sole goal of making it easy to create non-custodial, permissionless and decentralized financial services.” Dorsey intends the platform to be developed completely transparently: “open road map, open development and open source.”

In this episode, NLW puts the new initiative in the context of Square’s long-term relationship with Bitcoin, explains why it’s different from the company’s Square Crypto efforts and analyzes how different parts of the community are reacting to the news.

BlackRock CEO Seeing No Demand for Crypto Jul 16, 2021

Show notes

On this episode of “The Breakdown,” NLW addresses recent shifts in institutional and regulatory discussions on crypto, including:

How BlackRock CEO Larry Fink sees the state of crypto
ShapeShift’s final structural shift
Fed Chairman Jay Powell’s stance against stablecoins
A dissenting letter from two SEC commissioners

BlackRock made headlines when it entered the crypto market because it viewed bitcoin as a hedge play that could no longer be ignored. Now, this investment management company finds itself in a changed landscape as bitcoin prices have fallen from all-time highs. How has CEO Larry Fink’s view of crypto changed with this new price point?

ShapeShift, a global digital asset trading platform, was created with a vision of minimizing user-collected data. That vision was tarnished in 2018 when the platform began requiring basic information, resulting in a 95% loss of its user base. ShapeShift’s tumultuous history has added another chapter today with the announcement that it is converting to a decentralized autonomous organization, or DAO, owned by the users. Is this one step in a greater trend of fundamentally shedding corporate organizational power structures?

Federal Reserve Chairman Jay Powell countered Vice Chairman Randal Quarles’ pro-stablecoin stance in a recent testimony before Congress. While Quarles asserted successful stablecoins would make a U.S. central bank digital currency (CBDC) redundant, Powell offered the opposite opinion: “You wouldn’t need stablecoins, you wouldn’t need cryptocurrencies if you had a digital U.S. currency.” Whose stance will win in the growing stablecoin versus CBDC debate?

Two members of the U.S. Securities and Exchange Commission released a letter of dissent following a SEC enforcement action against U.K. company Coinschedule for anti-touting provisions. The letter expressed the members’ disappointment at the lack of regulatory clarification following the Coinschedule opportunity and an overarching distaste at a lack of transparency surrounding crypto guidance. Will more members follow in their footsteps and push for a clearer SEC stance?

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: Stefan Wermuth/Bloomberg/Getty Images, modified by CoinDesk.

Federal Reserve Vice Chair: ‘We Do Not Need to Fear Stablecoins’ Jul 15, 2021

Show notes

On this episode of “The Breakdown,” NLW analyzes a stablecoin-focused speech from Randal Quarles, vice chair of the Federal Reserve, starting with a primer on developing trends related to the topic, including:

CBDC discussion, investigation and development across global powers
The ability of stablecoins to make a U.S. CBDC redundant

The conversation around central bank digital currencies (CBDCs) is growing louder. In China, the digital yuan continues to roll out through lottery tests and, more recently, for use in the Beijing subway. Today, the European Central Bank announced a new two-year “investigation” period during which the ECB will prepare for a larger digital euro design phase with user consultation, regulatory discussions and market analysis.

Still, NLW argues that we can’t view the rise of public CBDC discussions in the absence of the growing adoption of private stablecoins. While these private, fiat-pegged stablecoins seem increasingly in the regulatory crosshairs, Federal Reserve Vice Chair Randal Quarles recently argued the U.S. central bank and policy makers shouldn’t fear them – and that, indeed, when regulated properly, stablecoins might make the need for a CBDC redundant.

While Others Warn of Market Bubble, Bitcoin Bull Bill Miller Doesn't Think So Jul 14, 2021

Show notes

On this episode of “The Breakdown,” NLW analyzes value investor turned bitcoin bull Bill Miller’s contrarian take on a possible upcoming market bubble. Miller’s background lies in traditional markets, with a massive portion of his portfolio grounded in strategically held Amazon shares. That, in addition to his relatively early bitcoin investments, provides him with an insider perspective from an external base understanding of markets. While other top investors predict an “epic” market crash, Miller remains unconcerned.

Today on the brief, NLW covers the most recent crypto market news, including:

New CPI releases fanning the inflation debate fire
Crypto volatility spillover risks to traditional markets
Square’s forthcoming hardware wallet

Newly released Consumer Price Index (CPI) numbers fuel an ongoing, contentious debate around inflation. While the Federal Reserve sticks to its “transitory” assessment, others are not so sure. How will the numbers change as base effects no longer become a valid explanation?

As institutional investors fill the crypto space, a “spillover” system risk concern becomes increasingly relevant. Is spillover just another piece of FUD, or is it an inevitable reality as traditional and crypto markets become more entwined?

Square’s teasing of a hardware wallet project is materializing. CEO Jack Dorsey tweeted no less than 12 guiding principles for the project, and the project lead more recently announced the company’s dedication to make “bitcoin custody more mainstream.” Although no exact timeline for release exists, Square’s project is an exciting step towards easier entry to bitcoin mobile and self-custody use.

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: Abscent84/iStock/Getty Images, modified by CoinDesk.

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