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- [00:01]
Narrator
Bitcoin trading below $95,000 today, levels not.
- [00:06]
NLW
Seen since last May, leading to the endless debate of whether the cycle top is in or whether there is a cycle at all. Even in context of everything happening with price, there's a lot happening behind the scenes with the government reopening and gaining some renewed tailwinds on legislation, regulation and more. To unpack all of the big stories of the week, I've got NLW for the Friday 5. Let's go. Let's dope. Good morning bear market enthusiasts and welcome to the dystopian future hell that is crypto. Gonna welcome NLW bear market things. You know it's a baby bear Bitcoin, 95, $500. Clearly it's all over. I haven't even looked. Let's see where crypto fear and greed's got to be low. Let's pull that up. 6 16. Extreme fear yesterday extreme fear. I don't know man. Seems like there's a lot of depression and maybe, maybe a bottom is approaching.
- [01:23]
Co-host
Yeah. I mean, who knows? I think that there's, there's a lot that you can point to in all directions, I'm sure. Which we will unpack throughout this episode.
- [01:36]
NLW
Yes, we will. I still think that this image is living rent free in a lot of people's heads when it comes to the cycle theory and where we're at. This 2023 Reddit post that said the pattern would put this cycle's all time high on the 6th of October 2025. Exactly when we hit126,000 people looking for reasons for this renewed sell off of course as well though you had Michael Saylor saying hodl. Apparently the Titanic's going down. What are we doing here?
- [02:05]
Co-host
I don't know, man. I don't think. I don't think that picture says what he thinks that picture says.
- [02:10]
NLW
No. I'm wondering if he's Jack and Rose is hanging off the back there somewhere and he's gonna just dwindle down into the abyss.
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Co-host
Yeah, I think that he thinks that the Titanic is the global financial system, but everyone who sees this thinks that it's bitcoin.
- [02:25]
NLW
Yeah, maybe. And meanwhile, at the exact same time the FUD strikes hard. Arkham sailor strategy cuts Bitcoin holdings by 47k. So a series of tweets saying that Michael Saylor is selling. Right as his HODL image comes up with the Titanic sinking. Of course this is probably just wallets moving.
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Co-host
There's.
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NLW
Yeah, listen, this is selling.
- [02:51]
Co-host
Michael seller Michael Saylor selling would Be a very damaging psychological signal for.
- [02:57]
NLW
That would be the thing. Right. And I'm like, yeah, bear market. I think everybody would agree. You just said Michael. Seller, seller by the way.
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Co-host
Exactly.
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NLW
Yeah, there was impeccable.
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Co-host
Yeah, there you go.
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NLW
So I actually do think though, like if you were looking for something that could be a catalyst for a much lower price, if that actually happened and was proving that that could be it.
- [03:17]
Co-host
I think there's actually like certainly from this, the, the, if you view bitcoin as the people who are inside industry and the sort of, you know, the, the rest of the financial world that's now incorporating it. I don't know that there's anything that could more hurt the psychology of the folks who are inside than, than a sailor sell man.
- [03:36]
NLW
The, the non sailor whales have been selling their butts off though. It's pretty clear when you look at any of the data that this has just been. And sustained and relentless selling by these old wallets and it's, it's pretty impressive how much bitcoin these guys have and their willingness to not sell it at these prices.
- [03:52]
Co-host
Yeah, yeah. I, I mean I think that that's when the dust settles and we're, you know, have the benefit of some emotional space from all of this. That will be a key point of analysis of this entire cycle is, is that sort of, you know, basically relentless pressure.
- [04:10]
NLW
So something else that never ceases to amaze me is how much money people can put into leverage positions and see liquidated crypto market liquidations. Top 1.1 billion. That was in less than 24 hours by the way. And not even counting when we dropped all the way down and have had hundreds of millions on every single day, basically. But analysts compare stress to FTX collapse. I would say that maybe was comparable because of the mass liquidation event on Binance, but steady liquidations, that seems wildly over. Over, over stated.
- [04:47]
Co-host
Yeah, that seems like an analyst who wasn't here like when that, when that happened. It's like normal parts, even if unfortunate and unfun parts of a market cycle versus like the culmination of multi tier, multi end year fraud exploding into, you know, an event that you know, could do more to damage the reputation of this industry in the US than anything before it. Like not comparable. Which is good news.
- [05:15]
NLW
Right.
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Co-host
It's good when we're getting that sort of hyperbolic.
- [05:19]
NLW
It's that human need to compare any bad situation to a worse situation.
- [05:25]
Co-host
Yeah, well, and you know, in this, I think in this case it does us good because boy, it's not even close.
- [05:33]
NLW
Yeah, absolutely. So let's talk about some of the actual tailwinds, though. As everybody on planet Earth, I would imagine, knows, the United States government reopening this week after the longest shutdown in history. Obviously, we saw a pause on a lot of things that we were looking for and excited about in the crypto market when it came to the government regulation and legislation. We came out of the gate swinging, though, right? Got an XRP launch of an XRP ETF, which was the best of 25. I think it outpaced the B sold by about a million bucks. But that was obviously a success even.
- [06:09]
Narrator
In a down market.
- [06:10]
NLW
But more importantly, the regulators and legislators are chirping again. I think that this is one of the bigger stories. SEC Chair Paul Atkins unveils plan for token taxonomy to redefine crypto regulation. Utility tokens, payment tokens, securities, commodities were the four buckets that I saw from looking at this, but actually found digging into his words really interesting. I mean, maybe you can unpack this first, but this is something we've been needing or looking for for a long time.
- [06:36]
Co-host
Yeah, I mean, a lot of these ideas hearken back to stuff Hester Purse has been talking about for years. You know, the, the. There's. They're trying to. They're basically taking up some amount of the work of this key question of whether a thing is a security or not and can it cease to be a security. You know, one of the key things that Atkins said is that basically the security nature of a thing can expire over time because the promises that were made to investors initially which gave it security, like properties cease to have a relevance to the sort of the nature of the, of the ecosystem and community. And I think that that's very coherent for those of us who live in this space who can see that there's a difference between, you know, a token that launches and needs to raise capital to sort of build itself out and uses a token sale as part of that and what that looks like from a security perspective, as opposed to five years down the line when it's mature, when you have a totally different set of actors than the people who launched it, who are maintaining it, and, and we're finally actually sort of getting, or we're lurching towards systems that can handle that sort of complexity.
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NLW
Complexity.
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Co-host
It's also interesting to me that Atkins is taking on some of this. I think that, you know, he made it very clear that he's not trying to duplicate the work of Congress. But I do think that they Are he is at least a little bit preparing for some of those security designation questions to be punted on because they're clearly kind of second tier in terms of the debates from a political perspective that are, that are getting had. So it's a lot of positioning to actually be in the place that we need to be once this legislation is signed and in the books.
- [08:16]
NLW
Yeah. What I find interesting, I actually had a conversation with Matt Hogan about this yesterday afternoon, but it will come out on Sunday. It was not live, but we both sort of agreed that it's not necessarily that the SEC is pro crypto right now. It's almost like they're just swinging the pendulum back to reasonable. And when you dig into what is happening, they're actually saying maybe most of this isn't even our jurisdiction or our business. So I mean, maybe we should just touch on the next story as we talk about that. Senators unveil draft crypto bill giving CFTC oversight power. This is a bipartisan bill that's being proposed that really would put most of the onus of regulating this industry on the cftc. And when you see Atkins talking about those buckets, three of those buckets are probably CFTC and most things he does not view as securities. And when you listen to him talking about it, he said, yes, we're still going to use the Howey test because it's what we have. But most of these things started that way, but no longer are. He even went into a pretty great explanation about Howey and the orange groves that it was based on and the fact that those are no longer orange groves now they're roads and streets and there's trees and there's parks and none of those things are the same security as when they started. So I think they're really kind of pushing this off the SEC's plate.
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Co-host
Yeah. And I think that this is so that the, the bill, the draft bill that was presented was presented through that, through the Ag Committee. So it's focused on that side of things. But this has been, you know, I think a pretty common theme in a lot of the way that the crypto industry was, was hoping to be regulated over the last few years is a bigger role for the cftc. We're now at the point where we're actually getting into some of the logistical questions. You know, the CFTC is about a quarter of the size of the sec. And so there are questions of whether it can handle this from a jurisdiction perspective. But you know, to your point about Atkins and pro crypto or not, I think that pro crypto can just be. One of the best ways to be pro crypto is to know what when you don't have any jurisdiction over parts of crypto.
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NLW
You know, it's funny, I interviewed Purse years ago and I started it thinking that I was being endearing by saying, yeah, we love to call you crypto mom. You're the only pro crypto SEC chair, SEC commissioner. And she was very quick to say, I'm not pro crypto, I'm pro common sense. This has nothing to do with my opinion of the asset class. I'm just trying to do the right thing.
- [10:44]
Co-host
Yeah, yeah, I think, and I think that that's, that's a, that whether that actually reflects their opinions or whether that's just this sort of like the stance that they're taking, I think it's the better one from a longevity standpoint of these polic policies.
- [11:01]
NLW
Quickly Saylor just tweeted, there's no truth to this rumor underneath Walter Bloomberg. So I think we can put the sailor is selling thing to bed because if he lies, he goes to jail. So.
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Co-host
Yeah, good.
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NLW
Yeah, good. Okay, so moving on to some more bullish things because as much as prices continue to drop, it's just amazing how many things are being built, adopted and created in this space. But Coinbase offer new crypto tokens to traders ahead of listing. Basically a pre sale launchpad here from Coinbase with Monad being the first. We've seen a lot of unsuccessful structures for launching tokens. Will this finally be the right way to do this?
- [11:45]
Co-host
That I don't know, but I, I'm glad that they're doing it. I think the ICO movement gets rightly maligned for the amount of it. That was sort of co opted by, you know, scams and just, you know, absurdity and overzealousness. But part of why it found such a ready market is that people have been kept out of early stage investments, you know, systematically for decades as they've watched sort of, you know, the, the, the accredited class get rich. And that is a big part of the discontent that was driving interest in ICOs in the first place. You, you, there's broader political conversations about this right now about finding ways to get more people invested into the success of American companies so that there's not a sort of an, a rejection pattern a priori, because they're not benefiting from these gains. And so I think that any experiments that are sort of in the, in the realm of, of legally feasible that allow people to have earlier access to These projects, especially in crypto, where they get to be a part of those projects in more meaningful ways than, for example, just buying early my stock as, you know, as secondaries or something like that, I think is a, is a net positive thing. I also think that Coinbase doesn't do things that are like, overly risky. You know, I, I think that if they're doing this, they have a sense of, of, of where it's going to fit with the new regulatory regime. They're not doing some crazy version of it. I think they were very loud about the non listing fees, no listing fees for, for part of this. So there's clearly an attempt to take the good parts of token launches and turn them into a thing that people can participate in.
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NLW
Yeah, I've said this a few times on the show, but I think that there's kind of two parallel issues with the ICO structure. One obviously is tokenomics and I think that's going to come down to the project and not something Coinbase can necessarily control. But the other side is the disclosures and breaking through the opacity that comes with these launches and the fact that they already have shown who the market makers are, how many tokens they're getting, how long they'll be market making for, obviously shows that we're on the path to more transparency. Now you can debate all day whether they should be releasing more than 7.5% of Monad in this sale. Right. Those are the things that go back to the old days of ico, where people feel like there's a privileged class that's getting the benefit. But at least we, everybody knows the vesting structure, everybody knows where the tokens are going to and then you can make your choice accordingly.
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Co-host
Yeah, yeah. I mean, the, the, the, the shitcoin waterfall was one of the key problems with ICOs where like literally you would have five different classes of people who were let in early that each had, you know, different tiers of discounts and it on, you know, there was no lockup. Right. It was just the day one liquidity, you know, dumping on retail's heads. It was a very, very weird moment.
- [14:38]
NLW
Yeah. I mean, and if we're talking about Coinbase, I think we definitely have to give an honorable mention to the fact that they delisted EOS this week. Since we're talking about ICOs. I mean, that was the most successful ICO of all time. Raised over $4 billion and never built a thing. But the block one who was behind that still has 120, 160. I don't remember the number. 160,000 Bitcoin they own. Bullish a lot of things. If you want to look back at the best example of the gratuitous grift of the ICO craze, raising $4 billion, not giving any of that, that back to retail, but accumulating a shit ton of bitcoin in businesses. Maybe the best claring example we have.
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Co-host
Yeah, I mean, listen, treasury management was the most successful crypto strategy for a good number of years.
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NLW
Yeah, well, hasn't been going too well for our new treasury management companies that have been launching. But that's a topic for another day. And just quickly note, Coinbase moves incorporation to Texas from Delaware following Musk's lead. I didn't see this as such big news, but people seem to.
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Co-host
Yeah, I don't know, it's broader stuff that's not just crypto related, that has to do with sort of shifting, shifting tides of how business is organized. But I think it's kind of insider baseball.
- [15:48]
NLW
China accuses us of orchestrating 13 billion bitcoin hack. I haven't gotten so deeply into this story, but I've definitely seen some bad takes because a lot of people are thinking that this was a hack that just happened. I believe this is from 2020. Yeah, yeah. Basically China saying, you know, it's state level actor, most likely the United States that directly effectively stole $13 billion in Bitcoin from China for.
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Co-host
Well, this is the, Isn't this the same pile of money that was like involved in the pig butchering scam that we just talked about like a month ago?
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NLW
Like basically there's 27,272 Bitcoin.
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Co-host
Yeah, yeah, there's this, there's this big chunk of 127,000 bitcoin that a lot of people seem to have different interpretations around. I think what's interesting about this is Chinese, the Chinese government waiting into the conversation around this, you know, basically that this, the, the, this particular person who's been accused of all these things in the U.S. you know, I don't know what it says about, It's a, it's sort of a geopolitical, you know, intrigue, I guess, around, around this. I, I don't think that this plays out into anything. And frankly I think that, you know, the, the idea that this is going to even sort of merit a mention in sp bilateral trade negotiations that are happening I think is pretty far fetched. But you know, whatever, maybe it's one more bully cudgel for, you know, various sides to use against each other and.
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NLW
Speaks to the technique that we're going to see governments using to build those strategic bitcoin reserves. Right. I mean, Kazakhstan, literally it was either this week or last. I remember we talked about said, hey, we're going to do a billion, but it's going to be from seas to Bitcoin. Like we're not buying that stuff. And by the way, I think checks bought bitcoin yesterday. Only a million bucks worth. But that was the first time an actual central bank had added bitcoin and crypto as a strategic reserve asset.
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Co-host
Interesting. Yeah. Well, and you also have some pretty fun conversations. Christian Carlo and Chris Perkins from Coin Fund have been advocating basically for the return of privateering for the US government to go out and basically license hackers to go get it. North Korean Lazarus crypto back, which is a pretty. I think that we could do. There's probably a whole show to be done there.
- [18:00]
NLW
There is. Because no matter how much of it we take back, it's not actually ours.
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Co-host
Well, finders keepers.
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NLW
Yeah, I like the finders keepers mentality for strategic bitcoin reserve building. Love it. So the next story we have here, and these are kind of honorable mentions, but I still think worth mentioning, JP Morgan rolls out deposit token, JPM Coin and Digital Asset Push. So to my knowledge, JP Morgan Coin somewhat existed privately. So that part of it maybe is not the biggest news. I think what is the biggest news, it's on a public blockchain and that they chose base. Right?
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Co-host
Yeah.
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NLW
J.P. morgan and Bass. I didn't really necessarily have on my bingo card. It would maybe like a JP Morgan on Ethereum or something like BlackRock.
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Co-host
Yeah, I, I think that that one of the, One of the. Again it was. We're coming up to the sort of end of the year and so you're starting to like, I don't know about you, but you know, you start to kind of categorize like top stories from the year, top themes, things we got right, things we got wrong. And I think that, you know, it clear that institutionalization was going to be a major theme, if not the major theme for this year.
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NLW
Right.
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Co-host
Check mark. Everyone got that one right. What was interesting about is the, the some of the ways that the competition has played out, I think is different than people thought. People kind of felt like it was an absolute race for circle to get public because there was going to be, you know, basically every big financial, you know, traditional F Trad 5 firm was going to do their own thing and build their own infrastructure. And launch their own coins. And there's certainly some amount of that, but there's also a lot more of just, you know, the big players in crypto. The big crypto native institutions are reaping the benefits as lots of these companies decide that moving faster with them as partners is better than just re rolling the whole thing. And this is kind of another example of that.
- [19:38]
NLW
Yeah, maybe I haven't been bullish enough on base. I think that was my, my takeaway. It is Coinbase and we know that Coinbase is eating the world and knows what they're doing, as I said. So maybe I should be more bullish there. We had a final kind of honorable mention story. Maybe we should have mentioned earlier in the CFTC conversation, but Carolyn Pham confirms push to launch leverage spot crypto trading on US Exchanges. And we also could have mentioned this in the 1.1 billion liquidations part. That's what we need. You know, we need perp spots for every American.
- [20:06]
Co-host
Yeah, I, I think that the, you know, the, the maybe if we try to kind of sum up why there's all this sort of good, you know, tail windy news, but the price is still in the crapper. It's none of this, none of these news items, none of this, none of these tailwinds are about the short term, right? They're all long term, like build out like the safe sort of place, the infrastructure for this, for this industry. They're not the type of things, they no longer have the power to drive short term sentiment because they are sort of expected. They're part of the trend and the trajectory right now. But I think in the, in the long term we still, it's very easy to underestimate the significance of these things when it comes to the environment that it, that it creates for, for the, for the long term, you know. But again when it, when it comes to the, the government shutdown, let's put it this way, the government shutdown when it comes to crypto prices is, is sort of more significant for crypto in the fact that we might actually get this clarity bill before midterms now because this, because the shutdown's over. But in the short term the biggest implications for price are probably that, you know, treasury is going to spend a bunch of billions of dollars now that adds more liquidity to the markets which could have a benefit for risk assets in general and maybe some of that flows into crypto. Right? This is just very different things. So if you are feeling bad about here, just kind of, you know, zoom out as Far as you can look. My, my prediction sadly is that I think that, I think that we've hit, it feels to me that we've hit a bit of a shift in sentiment in risk assets broadly, where everyone's kind of like, you know, what year was good, I'm done. See in January.
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NLW
Yeah. Get something off the table. The problem is that the year wasn't good for us. Yeah, I brought, I brought up the coin market cap first week of January prices. Spoiler. Bitcoin was 98 last I checked. We're at 95 here in November of the same year. Given like first week of January is arbitrary. I don't know that you care like what it was. But if we're talking about 2025 and Ethereum was like 36, Solana was like 220, it's at 139. So this is not a bull market. If you look at, you know, those dates that we really participated in.
- [22:14]
Co-host
Yeah, no, I mean that, that is the, that is the challenge. But this also comes back to the fact that, you know, another part I think of the story that will be written about this cycle to the extent that we are, you know, still in cycles, is retail never came back. It was just us degens that, you know, that, that, that diamond handed it through the last, you know, through the FTX explosion, everything else, plus a big bunch of new institutions that was this market. And there was never a, a new group of energy, excitement, capital. And then, you know, we just. There was only so far you could go with it.
- [22:49]
NLW
And Assuming that's true, October 10th was a really big deal when 19 billion was liquidated because maybe that wasn't us over here in the States, but I think as Rand Nooner put it, that was 1.1 million individuals had their accounts liquidated. That's a lot of soldiers if there's no new, if there's 100 coming in.
- [23:06]
Co-host
Absolutely.
- [23:07]
NLW
Yeah. I think that that is still going to also be looked at as one of those events that we'll be unpacking for quite a long time if we do indeed continue to go down.
- [23:16]
Co-host
Yeah, I. Look, I also think that there are, there are more short term tailwinds that we're maybe imagining and it could very easily be that next week we're comfortably back up above 100. We feel a little bit better. We're getting, you know, we feel okay going into, going into Turkey Day once again.
- [23:31]
NLW
Yeah, man. I mean I still default mentally all the lines and whatever to every bull market. We go down 25 like seven times and it's never a thing. So either this is the top for years or we're gonna be back, you know, at 150 at the end of the year and giggling Tom Lee style.
- [23:50]
Co-host
We'll find out, man.
- [23:52]
NLW
That guy though, like this week, I think he literally said he could be 10 or 12 grand by the end of the year. You gotta love them.
- [24:00]
Co-host
Pure bullishness.
- [24:01]
NLW
Just go for it. All right guys, give NLW a follow, Check out the breakdown, both newsletter and show and we will be back next Friday for another Friday 5. Thank you man.
- [24:11]
Co-host
Later.
- [24:11]
NLW
Bye guys.
- [24:12]
Narrator
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