The Five Most Important Stories in Crypto Last Week [Pre-Election Edition]
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Welcome back to the breakdown with me and L W. It's a daily podcast on mro, bitcoin and the big picture, powerless PS remaking our world. What's going on, guys, this is friday, november first, and that means it's time for the friday five before we get to that.

However, if you are enjoying the breakdown, please go subscribe to IT, give you a rating, give you a review, or if you want to dive deep into conversation, come to on the breakdown, you can find a link that you are going a bit that I sash breakdown pod. All right, friends, we are back with another friday five with me in Scott milker. And today's episode, I think, is just a perfect in capillary of the last three to six months, which have been totally defined by the election cycle by the etf.

We get a chance today to kind of summarize all of that and take a post on where we are in our last friday five before the U. S. Presidential elections. It's a good one. So let's dive in another .

week where IT seems like a thousand things happened were no longer in the boring stages of this cycle. Good morning, man. How are you? great.

How are you? I'm doing well, i'm mcleans. You are Mercedes again, we didn't plan IT. We didn't plan IT, but it's happening.

So this we're got to give an honorable mention really quick just because IT happened this morning. We obviously got non farm payroll job numbers, and I had to check four times to see if this is correct. U.

S. Economy add twelve thousand jobs in october. The expectation was one hundred and six thousand. This is the lowest print since july twenty, twenty one. Now unemployment was in line, but these are exceptionally low job numbers.

And surprise guys, I know you're not going to believe this, but they revised the last two strong months down eighty one thousand in August from one fifty nine to seventy eight, and september, that huge print. We head down thirty one to two fifty from two, fifty four to two hundred and twenty three. And just days before the election here, you can't believe these numbers anymore. Men.

we've been able to for forever. It's like when haven't we like had a revision downward at this point? IT will be fascinated to see if this really moves the needed at all or if it's sort of just so incidental relative to preelection. Just hold on and see what happens next. That's that's kind of my base case of how IT plays out in practice.

Yeah, I tend to agree with you and I think this just gives the fed the cover they need for another cut.

Yeah I mean, honestly.

that to me, the story is like maybe they weren't gna cut again and t again.

I feel to be honest, that does feel like the type of thing where is we're seeing an immediate market reaction down. But I kind of feels like really inevitably when the market is sort of like takes a step back, I think they're going to come to that exact time of conclusion that you are that you know any question of whether there is going to be sort of like a pause might be out for the cycle. So I don't know part of what the market had been trying to figure out as if rate cuts were, you know sort of bullish because things we're Normalizing or barriers, ed, because things we're going bad. And so this is in the bad column, but I I tend to think that this sort of an initial reaction where the market is trying to figure that out, and then they remember they are getting .

a great cut either way, and then they get happy again. So now I think futures dumped to men pum kind of immediately usual like major reactions about. So I think our first story here is kind of big quin Price action, obviously, because I think, you know, tech alysa been watching that sixty nine, seventy level.

Let's finally get back above that. Will we did. And we've been relatively good at staying there for the moment. We've got bitcoin Price takes breather as good coin etf record another day of monster inflows. We've got black rock that in ef getting record inflow ahead of us election.

And then of course, bitcoin Price drop leads to two hundred and fifty million bullish liquids scripter sentiment indicator single top, that's the extreme, agreed that we've been heavy. And then we need narratives for why we have barely made IT about to seventy thousand. The coins runs told record high, falters as trump election odds dip.

So much going on here, all I see is bitcoin went up really far, really fast. And then all the leverages got flushed. And here we are, right back of amazing level .

of seventy thousand. Yeah, you know, I think that the bomber for me, which is, you know, a very silly bomber to have, but this is sort of like the closest we've ever had to being able to make a new all time high on bitcoin White paper day, and we just couldn't get IT done. I mean, I feel like somewhere should have taken one for the team.

You know, just sort of, mh, smash the bid button and got a done. But we are now officially the longest period of time at which the court has been above seventy thousand. It's kind of that type of moment where you so anticipate, you know, they wanting to get above that is, is that consolation prize of this sort of being in totally uncharted territory kind of goes out the window? IT is weird though. I mean, plenty people have commented on the divergence between the Price in the sentiment.

agree. And you sort of mentioned bitcoin soshi White paper day. We've got a eet from Donald trump. Would would like to wish our great big coin nera happy sixty, the universities, so she's White paper.

We will end condo less war and cypher and biton will be made in the USA vote trump. And then, of course, one hundred horsey, from bit wise, you have imagined this from U. S. Presidential candidate a year ago were entering the mainstream era. I mean, I think that's just incredible that something like that could be tweet from a presidential candidate.

But we would have imagined that from domna trump for four years ago because he was created about how was no fan of cow, you know, if if were being honest, he was never screaming about that. He was letting .

Steve was reading ah Megan stole is phone in the morning and fired off some tweet about his hatred for bitcoin. But still this really does show you how much things have changed in the past years when we had such bare sentiment and such few years about the united states government, uh, to some degree, on both sides. And here we are right where the cycle should be back in the seventy thousands waiting to break an all time high with the election. I mean, you know the title here here is why next week we'll pavior for grip that shows you right? I mean, it's going to matter who is the president for the next four years.

IT absolutely will. And now I think that there's sort of an interesting nuances to the political conversation where IT matters both, I think, as as much as people feel, but also sort of not as much in the sense that IT will be highly consequential. We've seen with this administration how much A A White houses disposition towards the asset, whether it's direct or whether it's by verge of a allowing someone else to control their disposition towards that can impact policy. At the same time, I think that post election, we will sort of you know remember that it's gonna fine in either case is just how fine IT is and how much we have to deal with on the you know.

all the way I agree with that. Well, there is one person that we're definitely not surprised is revolution mpc coin right now. But maybe we can finally be just how bullish is Michael sailor microstrip gies twenty one billion equity plan tops tesla for record.

So that is absolutely not. And then when you consider that twenty one is actually forty two and we have still here, microscopic sala pitches voltige share Price, a sign of healthy capital. But this guy has always been all in.

We've still been surprised at just how all IT is every single time he raises a little more debt to buy a little more bitcoin. Forty two billion more dollars in three years. Can we pull this off?

I I am not in the business of betting against sala when IT comes to his acquisition. No, look at at at some point, the eyes get so large that even the free markets go like, do we really want him buying all that much? But for now, you know, I think that if you if you if you really look at you're look at Price support for as far as the eye can see the stage.

So you know it's is super ambitious. I I think you know he is abundantly clear about IT is what was really interesting about this earnings call, where where they were discussing the strategy is sailor threw down the gotland, uh, IT was very clear that IT was no longer a sort of justifying how they think about things. IT was about a sort of denial that anyone could catch up to them without going all in right.

He basically said at one point during the call, other people are gna get interested in this. There's no way they can actually copy us without going on in. And no one can go as all in as we can go right now because, you know, we couldn't.

We didn't start here. We add to sort of grow this. And then IT was very interesting just how different the the conversation was. In fact, more broadly, one of the things that I noticed doing shows this week is I had a full ash show about earnings calls related to cyp to there was Robin hood, coin base, microstrip, gy and a couple of others obviously kind of know all these things in the attract. But the fact that there was A A full shows worth of news about earnings calls from the public markets that relate specifically of just a reminder of just how different things are.

Well, Robin hood did poorly as you mention them. And I think it's interesting to talk about going is very briefly here. But their share is tumbled the most is twenty twenty two.

After results lagged estimates, they had total revenue one point to one billion. Of course, that's very good, but it's how you do verse expectations and expectations of one point two five. And they are net income was seventy five million, which was below the hundred and twelve point two million expected. But important note, I think during this pair last year, they lost two million coin basis healthy, doing exceptional well. But looking at these two, which three efforts sort of the biggest proxies for the cyp to market or bitcoin in general microscopes while they are performing coin base now up?

Yeah, I mean, quite so. The thing that's different is that microstrip gy, all you have to be your calculus is entirely around what you think bit coins going to do to some extent, right? Well, plus what micros signing. I think the other thing is about my.

Telegraphic this strategy in a way that they perhaps haven't be foreign in terms of getting specific is that IT gives analysts the chance to kind actually start to put models around how they think micro strategies is going to be a relative to the the Price of the point, right? That gives you a chance to kind of catch up to the premium uh of microstrip gy stock versus the underlying bitcoin wherewith coin base. You know, coin base has always been a tale of revenue streams.

One is trading and and the other is everything else. And so coin basis trading revenue was down over the last quarter because I was just quiet, right? We all felt IT know we had to make up a bunch of stuff, luckily, you know, trumping, coming over here for us.

H, making sure that we had to talk about every week this summer. But I was quiet, right. You know, IT IT is even this year, I think has felt this proportionately quite even relative to Price.

And so you know the the coin basis for years now been really clear that everything in that company, the long term is about diversifying those revenue trips like that. If they focus on it's base, it's custody, it's at all of these things. And you know there they're showing if you kind of ticket step out from quarterly result, they're absolutely showing progress on those things.

But you know trading is still king, still driving you know big portion the revenue. So you know I think I think that your assessment is right, uh, that this is still an extremely sort of healthy performance. Just didn't quite get at expectations um but I think expections were.

And you know one of the things things is interesting about expections is I think crypto companies are in for we're still in a period where wall street analysts aren't that good at understanding what's going on in markets. And so that makes IT hard for them to you know kind of get expectations right when IT comes to trading because they are they're not sort of familiar with those dynamics. And my guesses that, that will get Better over time.

Yeah, they throw out dark to get an expectation in the stack moves based on how the actual numbers and come in relatives to those expectations. Wall street doesn't understand and how to value base, right? They do not understand that um we get a raging alcoa bull market in the next three months that coin bases revenges are going to absolutely skyrocket.

okay. I see that as an opportunity. More than eight team, certainly for coin base .

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So we had a bitcoin move, obviously to the upside. And I can tell you exactly why IT happened is because we had tether'd. And if you get tether'd, it's always some sort of bottom or appreciate some sort of mature pit when moved to the outside.

Um we have this story here, the cypher T S too big to fail. Uh token tedder faces new threat from us and tethers usage shifting largely the united states as U. S.

scrumpy. Of a hundred twenty billion stable coin growth. First of all, this thing is one hundred and twenty billion.

I don't know where I was this time last year, but IT wasn't close to that. Ah I tether absolutely one of the most profitable, incredibly growing fast companies in the world. And seemingly even this food is dated and kind of nonsensical. And the D O J is sort of always looking together, right? Yeah, I just seems like there is nothing new here.

Yeah I mean, listen. So one, I think you're right. Like at this size and at every size that IT hits from now on, the scrutiny there will always be scrutiny on other IT is simply too big to not be constantly scrutinized, right?

Every every office and every potential you know regulator and enforcement division going to be constantly looking at this company. You know, it's just it's just massive and it's so getting to be no more and more systemically important. So that sort of inevitable what's interesting about this story is is is sort of the question of um there's a few different scenarios that this could be. One is uh is you know there is a pipeline between the D O J and uh and the major news outlets that we've seen before that use press leagues effectively as tactics to try a kind of exert pressure.

Um I think the place that we saw this most and this kind of resemble to me, was in the months leading up to finance settlement, we saw a lot of these types of leaks, leaks from privileged sources in the enforcement divisions know well sourced uh that you know sort of felt like they existed to put pressure on the you know the the the company in question to may be come to the settlement table. Now we've got tons of those of finance. I mean, there was a series of like four or five of them that that happened.

So you know this is not that same pattern is just a single story um but IT is reminiscent of that to me. At the same time, this story could be a single person inside the D, L, J who has an exotic, and he wants to throw, you know, tomahawk on their way at. There's a lot of reasons to also not take IT all that seriously.

I think that the ten foil hat, not that ten foil, not that hat, kind of look at this is Howard letton ck has been getting larger and larger in the media you know was trumps uh transition team coach hair and you know he is a huge herbal because um uh because it's company IT uh and you know maybe there's some long fare you know you know the sort of pre law politics and going on, who knows? I think ultimately, we should assume that with where tether sits. And I I have to assume that tether knows this and they've given all the indications that they are Operating as such.

They are now a officially sort of too big to Operate, kind of fully outside the system. You know, they are clearly still focused on providing services for you outside the U. S.

In the global south. They've also spent the last three years not seeding the official U. S. Stable coin story to U. S, D, C.

There could have been in a moment where in twenty, twenty one, twenty two other kind just said, like you, you get, the U. S. Will take everything else.

But they have IT. They talk all the time about how much they work at the FBI I like. So I I would assume that whatever amount scrutiny there is either is taking a head on and using their considerable watches to make sure that .

they are out ahead of IT. Yeah, this is one of the guys they fear there again. Or interesting here that he is gone on a main street, right? I love the beginning of this article and you can unpack A A bit for us is my person believe that no Normal person to know the name of the security and exchange commission's chair and yet here I am about to explain my his bit issue in the tony twenty four presidental election good job, gary. What do you think?

Yeah uh this is an interesting article in the sense that journalist not procreate able not uh unnecessarily and know kind of provided a uh some amount of logic you know not like sort of that you're supposed to believe but you know at least an explanation for why uh, the S C C would use its sort of regulation by enforcement strategy.

Basically the argument of the piece is that regulation by enforcement is what to available to them because judges keep letting them do IT so that you know their incentivize to to take that path. SHE can lays the blame with the beef of congress for not giving the S. C.

C. More resources. But at the same time, it's pretty clear that there's not a lot of compassion for the idea that D S C C says common in register and then doesn't allow people to come in and you know and work with them.

So I think, you know, if you were a totally objective outsider just reading this, probably what you'd come away with is thinking, boy, all that looks messy. There's clearly not a hero on the against their side. Maybe I understand where they're coming from, but I don't think it's a particularly positive look for gangs, iller or the sec in their approach.

This guys got to go no matter what happens. In the reason that he's got to go for this administration is that we have a few surveys here that you're saying that crypto really matter. This is from paradise. Crypto will matter at the ballot box this november, which of course, is now.

And then we had one from the digital chAmber I spoke a parian borrower actually yesterday about this are a major polling piece that basically said that sixteen percent of voters cared deeply about cypher and would consider voting for date based almost solely on their belief about crypt. U IT. Actually went into a lot of other interesting findings are especially that the people who were voting democrat and believed in crypto largely thought of the democrats were more procris pto, and those voting republicans that that the republicans were more procreate t do. So it's important sometimes to step out of our echo chAmber and realized that things are very bipartisan and most people are just going to assume that their team is Better for their thing.

Yeah, I mean, that's there's something nice about that honestly. You know like people have this sort of faking confidence, but I don't know mean, it's still hard for me to rap my head around these statistics.

I think a lot of them are, you know what is clear from the aggregate of all of these polls? This is a meaningful issue to a meaningful portion of people where they tend to lose me as when they try to construct questions that are about single issues. It's very hard for me to believe that actually five percent of americans are single issue cropt of voters.

There's very few issues that have five percent of americans a single issue voters around that thing. But IT almost like doesn't matter, you know, because that's so incidental to the fact that like IT is there is no way to read these polls. And what has happened in this election cycle and not see corrupt having emerged fully as a meaningful political force and issue that speaks specifically to a lot of people as well as being resonant with a lot of other related issues. Crypto is here on the ballot box, on the agenda, whether people are voting exclusively on their clipt beliefs or just as a part of a thing, it's not ignorable in in any meaningful way. And more than any polling, the candidate posture has demonstrated that.

yes. So that wrapped the major stories we were going to talk about there. IT was such a big week that we had a lot of vulnerable mentions.

We had a new fake toshi, which was supposed to be announced the press release, london. We had, obviously, the treasure was advising on toggle zone. Basically, he said that stable coins help the U.

S dollar, which was interesting, but then completely left crypto out of their federal inclusion report with every universe, buying equity. D F, hong KPI for copti markets, cracking, restructuring and firing people. Consensus ally of people. D Y D X, when I tell you guys there was another big week, there was a lot there.

Yeah, this is our last friday, five before the election. Next week, we're gonna be able to actually kind of like sift through, well, presuming that we know who the the new president is, that time, which is, you know, anyone's bad, we were going have a lot to sit through.

But no, I think where we kind of just send IT is is as a pretty good reflection of you know what the last three to six months have taught us in terms of the the crypto o story you know here we are uh, in an election cycle where cypher has absolutely and undeniably become a major issue, where we had a candidate from one of the major parties, you know, loading bitcoin ters in the satoshi White paper. You know, bitcoin White paper day yesterday on halloween, where crp to political forces have meaningly swayed primary elections up and down the ballot and where bid in is sitting at you above seventy thousand for the longest period that IT has as IT seeing record inflows for etf. That's largely driven by institutional buyers. Like if you need a picture of where things are right now and at how different IT is, you know it's a pretty good snapshot.

Absolutely agree. I not if i'm looking forward to or dream next friday, but I guess we'll see the next seven days of our lives goes important. Remember guys, that if the person that you support a loses, the world going to be over. So what happens? I know for all even be here.

Yeah well, I script to so we see about, like, I don't know, like somewhere between thirty and seventy percent of you.

I guess. Yeah, that's exactly right. Oh, right, guys, that's all we got the thing. You unpacked a lot of this on the breakdown, obviously, this week.

If you are more in depth, go back and listen to those and listen them in the future to get a preview of what my here on the next twenty five go ahead. Give him a follow and always listen. And thank you so much. See next week, 比尔盖茨。