The Breakdown

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Lyn Alden on Bitcoin, Inflation and the Potential Coming Energy Shock Jun 23, 2021

Show notes

Lyn Alden, investment researcher and strategist with a keen eye on both crypto and traditional markets, joins NLW on today’s “The Breakdown.” Listen for a conversation about the state of the market and projections for the future including:

Inflation: base effects and transitory in nature or here to stay?
Foreign debt markets tapering off
The Lightning Network and predictions for the success of El Salvador

Inflation at a high number, 5%, leaves investors and market observers jumpy. On top of that, many have a hard time believing the U.S. Federal Reserve’s narrative for inflation as outlined in the recent FOMC meeting. How is this inflation different from previous spikes?

The foreign sector has historically been a large buyer of Treasurys in structural trade deficits. In 2013, China stepped away from this practice and started investing in its own infrastructure and in other regions across the world. Even if other countries continue to invest in U.S. assets, it is increasingly in hard assets like stocks or real estate. Will the dollar weaken as the Fed is forced to be the primary buyer of U.S. Treasurys?

El Salvador’s commitment to bitcoin as legal tender is one thing, but what will the reality of this new currency look like? Bitcoin’s Lightning Network provides easy access and transaction speeds, so long as enough of the general population has access to smartphones.

Lastly, with the public’s attention captured by the current inflationary moment, what market features are getting underreported? Tune in to hear Alden’s perspective on what will have an unexpected impact in the upcoming cycles, including the potential for a significant energy shock in the years to come.

-- Earn up to 12% APY on Bitcoin, Ethereum, USD, EUR, GBP, Stablecoins & more. Get started at 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

The De-Chinafication of Bitcoin Jun 22, 2021

Show notes

On this episode of “The Breakdown,” NLW takes a look at the most recent crypto news before taking a deeper dive into the latest step in the de-Chinafication of bitcoin.

MicroStrategy going “all-in” on bitcoin

Michael Burry’s warnings on Twitter of the “Mother of All Crashes”
The “dot plot shock” and post-FOMC meeting confusion
Accelerating China mining ban

While in this in-between state, post-COVID and pre-monetary policy tapering, institutional investors find themselves on diverging and opposing paths. Michael Saylor’s MicroStrategy has gone “all in,” while at the same time investor Michael Burry took to Twitter with warnings of an upcoming “Mother of All Crashes.” Confusion following the Federal Reserve’s FOMC meeting only adds to the contention between investors with contrasting visions for the near future of crypto.

The Central Bank of China has convened a meeting with the major banks to reiterate and tighten previous policies on the prevention of virtual currency transactions in bank accounts. Is this restriction on crypto transactions yet another indication that China is taking a more aggressive stance against bitcoin?

More to this point, Sichuan became the most recent province to crack down on crypto mining. Sichuan, primarily mining with hydropower, seems to diminish previous ban reasoning citing environmental concerns. How far will China go to remove itself from bitcoin, and what does that mean for its citizens and the crypto space as a whole?

Does a Law From the Civil War Make Stablecoins Illegal? Jun 20, 2021

Show notes

On this week’s Long Reads Sunday, NLW reads “How the Civil War Shapes the Future of Stablecoins” by Franklin Noll, and discusses the recent debates around stablecoins and CBDCs.

What Are the Prospects for a Bitcoin Standard in Africa? Jun 19, 2021

Show notes

This week on “The Breakdown’s Weekly Recap” NLW covers:

More institutional bitcoin news, including a new Morgan Stanley fund from NYDIG and FS Investments and a Goldman Sachs trading partnership with Galaxy Digital
A resurgence of “crypto is for criminals” FUD plus new China miner shutdowns in Sichuan
The latest debates around El Salvador’s bitcoin law
Rumblings of bitcoin in Nigeria, CFA countries and Ethiopia

The Shorter Cycle Theory With Larry Cermak Jun 19, 2021

Show notes

The idea of a multiyear supercycle is fading as shorter cycles take their place. In this episode, NLW and guest Larry Cermak, director of research at The Block, discuss the transformation of the supercycle timeline as the crypto space evolves. The discussion includes:

An analysis of the macro-narrative and the current “wait-and-see” mode

Shorter cycles taking hold as the crypto space matures

The larger institutional narrative promised a bevy of substantial allocators to contribute to the market. That narrative, however, has weakened over time as the promise falls short. Add on the uncertainty from China’s partial ban on mining and Tesla’s environmental concerns, and the narrative continues to lose momentum. What narrative will take over next? When will this “wait-and-see” mode end?

Historically, crypto was perceived to fall into semi-stable cycles. For a couple of years, prices would rise, and for the next two or three years after, prices crash. However, with longer-term investors and a broader focus on usability over speculation, is there now a foundation for a more stable market with shorter cycles?

From a $1T Asset to a $100T Network: Everything We Learned About the Bitcoin Mining Council From Michael Saylor's Twitter Spaces Jun 18, 2021

Show notes

On today’s episode of “The Breakdown,” NLW first follows up on yesterday’s episode about the FOMC meeting and a potential future shift in Fed policy. As many expected, the Fed kept its short-term policy the same, but revised forward its estimates for when it will begin rate hikes to 2023.

The main discussion focuses on the latest from the Bitcoin Mining Council. Yesterday, MicroStrategy CEO Michael Saylor hosted a 90-minute discussion via Twitter spaces that featured many pointed questions. NLW argues that what’s clear from the session is Saylor is focused on scaling bitcoin from a $1 trillion asset to a $100 trillion network and fighting anything that stands in the way.

Will the Fed Shift Policy Due to Increasing Inflation? Jun 17, 2021

Show notes

On today’s episode, NLW looks at the Federal Open Markets Committee briefing coming up this afternoon and discusses what it might signal in terms of future monetary policy. The discussion includes:

How the Great Financial Crisis inspired “the largest monetary policy experiment in history”
2013’s “Taper Tantrum”
The return to GFC era policies during COVID-19
The insurgency of meme traders
Why inflation is a self-fulfilling prophecy

Will a US Digital Dollar Protect Privacy? Jun 16, 2021

Show notes

The question of digital currencies is a question of power. On today’s episode, NLW explores that power in multiple dimensions: between states, between states and companies and within states with regard to their citizens.

NLW looks at recent regulatory announcements, including:

The SEC leaving crypto off its regulatory priorities list
A House hearing on the digital dollar

'Bat-Shit Crazy’ Paul Tudor Jones on the Fed, Inflation and Why He Recommends 5% in Bitcoin Jun 15, 2021

Show notes

Just when it seemed like the “Economic Empowerment” narrative coming out of El Salvador was poised to overtake the inflation/digital gold narrative, one of that viewpoint’s strongest advocates was back on CNBC today. Hedge fund legend Paul Tudor Jones discussed why he doesn’t think inflation is transitory, why he recommends 5% in bitcoin and why the outcomes in the market will be based largely on what the Fed does next.

Also on this episode:

Elon Musk says Tesla will accept BTC as payment again once renewable mining hits 50%
Michael Saylor and MicroStrategy sell $500 million in bonds to buy more BTC
More shockwaves from El Salvador’s landmark bitcoin law

Is Bitcoin a Trojan Horse for Freedom? Jun 13, 2021

Show notes

This week’s “Long Reads Sunday” presents a reading of Human Rights Foundation CSO Alex Gladstein’s piece “Bitcoin Is a Trojan Horse for Freedom.” NLW contextualizes the piece with this week’s landmark legislation out of El Salvador and the concerns some international observers have about that country’s president.

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