The Breakdown

Latest Episodes:

Network Undergoes Biggest Difficulty Adjustment Ever; BMC Says 67.6% of North American Bitcoin Mining Is Sustainable Jul 03, 2021

Show notes

Today on “The Breakdown,” NLW looks at the latest in the highly dynamic, fast-evolving world of bitcoin mining, including:

China’s mining ban and the “Great Western Hashrate Migration”
Bitcoin’s built-in hashrate fluctuation mitigation, the “difficulty adjustment”
The Bitcoin Mining Council’s newest sustainable mining figures

China’s expansive mining ban, including regions with hydroelectric power, forced China-based miners to liquidate some of their crypto in preparation for a move elsewhere. Where will hashrate move next? Will miners join U.S. crypto-friendly jurisdictions like Texas and Kentucky, or will they stay close to home in bordering countries like Kazakhstan and Russia?

The ban induced a massive reduction of hash power on the network. Luckily, Satoshi prepared for such a circumstance and built in a concept of “difficulty adjustment” into Bitcoin’s protocols, which allows for fluctuation in the composition of miners. The adjustment expected to be made tonight will be the highest adjustment ever made on the network.

Lastly, NLW addresses a report released by the Bitcoin Mining Council on sustainable energy disclosures. This report’s feature number, 56% of mining electricity mix is sustainable in Q2 2021, has some groups excited while others remain skeptical of the validity of the report. As NLW argues, “Some data is better than no data.”

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George Soros and Steve Cohen Go In on Bitcoin; Here’s Why That Might Not Be a Good Thing Jul 02, 2021

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In this episode of “The Breakdown,” NLW discusses a fresh wave of investors and their potential disruptions to markets, including:

Two new major hedge funds, Point72 and Soros Fund
Inevitable short-term investors as part of market maturation
Troublesome possibility of regulation forming around institutional trading habits

In early 2020, institutional investors flowed into the crypto space nonstop, including hedge funds, corporate treasuries and insurance companies. This new type of investor changed the space, with surging and plunging prices following news of investors coming and going. Then the flood stopped as the always-controversial Elon Musk’s Tesla balked at bitcoin’s energy consumption and walked back accepting the top cryptocurrency in exchange for the company’s trendy vehicles.

In the last quarter, institutional investors have been stepping back into crypto. Point72, Steve Cohen’s company, stated it would be “remiss to ignore a now $2 trillion cryptocurrency market” and is looking to hire a “Head of Cryptocurrencies.” Besides Point72, internal management at George Soros’ Soros Fund has given the “greenlight to actively trade bitcoin.”

Are these two hedge funds just the tip of the iceberg for a resurgence in institutional investment? How will this new mass of money impact markets and regulation?

A "Crypto Frenzy"? Today's Congressional Hearing Puts Bitcoin and DeFi in the Hot Seat Jul 01, 2021

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An interview with a congressman followed by a congressional hearing on crypto signal policymakers are moving to the next phase of talks about regulating crypto.

Troubling comments in Congressman Bill Foster’s interview with Axios
Upcoming committee hearing titled ominously “America on ‘FIRE:’ Will the Crypto Frenzy Lead to Financial Independence and Early Retirement or Financial Ruin?”

Foster has historically been a champion of the crypto market: He is a co-chairman of the Congressional Blockchain Caucus and was previously supportive of the future of crypto. However, in his recent Axios interview, his tone flipped, as he went as far as to suggest the need for a “cryptographic backdoor” to allow the court the ability to view or even reverse transactions. Is Foster’s new viewpoint indicative of a greater shift in policymakers’ attitude toward crypto regulation?

Today’s House Committee on Financial Services hearing with a particularly colorful title is yet another signal for an upcoming regulatory push in crypto. The hearing’s agenda includes a discussion of bad actors on decentralized currency exchanges, or DEX, including a reference to Mark Cuban’s recent loss of money in a DeFi “rug pull.” With an expert witness lineup, including Jim Cramer of “Mad Money,” Alexis Goldstein of the Open Markets Institute and Peter Van Valkenburgh of CoinCenter, there is quite a mixed set of viewpoints on the current state and future of crypto.

-- Earn up to 12% APY on Bitcoin, Ethereum, USD, EUR, GBP, Stablecoins & more. Get started at https://nexo.io/ -- Enjoying this content? SUBSCRIBE to the Podcast Apple: https://podcasts.apple.com/podcast/id1438693620?at=1000lSDb Spotify: https://open.spotify.com/show/538vuul1PuorUDwgkC8JWF?si=ddSvD-HST2e_E7wgxcjtfQ Google: https://podcasts.google.com/feed/aHR0cHM6Ly9ubHdjcnlwdG8ubGlic3luLmNvbS9yc3M= Follow on Twitter: NLW: https://twitter.com/nlw Breakdown: https://twitter.com/BreakdownNLW The Breakdown is produced and distributed by CoinDesk.com

How the Macro Landscape Is Shaping Bitcoin Markets Jun 30, 2021

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Highlights from today’s Breakdown:

The latest legal challenges around the Bitcoin white paper
A barrage of institutional bitcoin news
What the S&P 500 hitting all-time highs has to do with the crypto markets

For those worried there was a loss of momentum around institutions entering bitcoin, fear not. Cathie Wood’s ARK is joining forces with 21 Shares to become the latest to apply to the U.S. Securities and Exchange Commission (SEC) to launch a bitcoin ETF. Morgan Stanley has bought more than 28,000 shares of the Grayscale Bitcoin Trust.

More broadly, markets have been buoyant over the last few weeks, closing at new all-time highs on Monday. This is finding its way into crypto markets, which reflects how increasingly intermingled traditional investors are becoming with crypto investors.

Could a new COVID-19 variant negatively impact the economy’s overall momentum? If it did, what would the likely impact on bitcoin and other cryptos be?

The Real Story of the UK Binance Ban Jun 29, 2021

Show notes

Today on the Brief:

Indian investment in crypto soars
The first Mexican bank to accept bitcoin?
Tether FUD from the FED?

In our main discussion, NLW looks at recent regulatory action from the U.K., Canada and Japan. He argues that we’re entering a new phase of global regulation, where we’re likely to see a particular focus on leverage and derivatives.

The Great Western Hashrate Migration Is Real Jun 27, 2021

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On this week’s “Long Reads Sunday,” NLW reads Nic Carter’s latest essay for CoinDesk “Go West, Bitcoin! Unpacking the Great Hashrate Migration.”

Even in an Off Week, Bitcoin Had Quietly Massive Institutional Adoption News Jun 26, 2021

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

Two more massive fundraises
A set of positive regulatory news
A new partnership that will bring bitcoin directly to bank accounts and credit unions around America

Elon Shitposting While El Salvador's President Addressed the Nation About Bitcoin Is Peak 2021 Jun 26, 2021

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Last night was one for the history books. As Elon Musk was making weird, stupid jokes about bitcoiners, the president of El Salvador was live on YouTube discussing what amounts to a $117 million BTC airdrop to citizens as a part of the recently passed law making bitcoin legal tender in the Central American nation.

John McAfee and the End of Crypto’s Gonzo Era Jun 25, 2021

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The passing of an icon in crypto necessitates reflection. John McAfee was at times reviled, and at the same time, deadly serious and a prophet, sometimes a clown. The many facets to his personality mirror the roller-coaster history of crypto, a Wild West of finance in its earliest days.

Join NLW in this episode of “The Breakdown” for a journey first through the winding history of McAfee, followed by a narrative tour of the many flashpoints in the “gonzo” era of early crypto.

Full transcript: https://www.coindesk.com/podcasts/coindesk-podcast-network/john-mcafee-end-crypto-gonzo-era

Bear Market? Not According to These Monster Funding Rounds Jun 24, 2021

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Today on “The Breakdown,” NLW looks at the contrast between growing bear market sentiment versus a sustained set of high-profile eight and nine figure financing rounds across multiple dimensions of the crypto market. Specifically, he looks at funding deals in NFTs, DeFi and institutional bitcoin, arguing that even if we do head into a bear market, that capital is likely to mean a return to bull more quickly.

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