Podcast Summary: The Wolf Of All Streets Episode: Extremely Bullish On Bitcoin: Crypto To Become A National Priority
Host: Scott Melker
Release Date: January 17, 2025

1. Introduction

In this episode of The Wolf Of All Streets, host Scott Melker delves into the burgeoning optimism surrounding Bitcoin and the broader cryptocurrency industry. Central to the discussion is the anticipated executive order by former President Donald Trump, positioning cryptocurrency as a national priority. Co-host NLW joins Scott to unpack the implications of recent developments in crypto policy, macroeconomic indicators, regulatory shifts, and notable events affecting the crypto landscape.

2. Trump's Executive Order on Cryptocurrency

2.1 Overview and Initial Reactions

Scott Melker opens the conversation by highlighting reports that Donald Trump is poised to issue an executive order declaring cryptocurrency a national priority. This move has been recognized as a significant bullish signal for Bitcoin and the crypto sector. Scott remarks:

[00:00]: "Donald Trump is expected to issue an executive order calling cryptocurrency a national priority... that's hyper bullish."

2.2 Analysis by NLW

NLW provides a nuanced perspective, emphasizing that while the news is promising, the specifics of the executive order remain uncertain:

[01:23]: "There's a flurry of information around what might come with these executive orders... It really has to be actual action, not just symbolic action."

He outlines potential components of the order, such as halting federal crypto litigation, establishing a crypto advisory council, and creating incentives for Bitcoin miners. NLW cautions that without concrete details, the immediate impact might be limited.

2.3 Comparison with Biden’s Crypto Policies

Scott draws parallels between Trump's expected order and a previous executive order by President Biden, which encouraged agencies to review crypto policies:

[03:12]: "There’s some conjecture that this could basically be the inverse Biden executive order... People said maybe this is the inverse where he says... take a look and send me your feedback in a positive light."

NLW agrees, noting that the effectiveness of Trump's move hinges on the specificity and action-oriented nature of the policies introduced.

2.4 Involvement of Key Figures

The discussion shifts to notable figures supporting the Trump administration's crypto stance. NLW mentions tech influencers like Mark Andreessen, who has been significantly involved in Trump’s transition team, indicating deep engagement in shaping crypto policy:

[05:35]: "Mark Andreessen has basically been living at Mar-a-Lago for the last month... 816Z is one of the more loud advocates for positive crypto policy."

This involvement suggests a serious and sustained commitment to advancing crypto-friendly regulations.

3. Macroeconomic Indicators Impacting Bitcoin

3.1 Market Movements and Indicators

Scott transitions to macroeconomic factors affecting Bitcoin, noting a surge in Nasdaq futures and Bitcoin breaking the $100,000 threshold amid a risk rally:

[06:47]: "Nasdaq futures jumping 1% as Fed rate cut bets revive. Bitcoin rises past 100,000 threshold amid risk rally renewal."

NLW concurs, explaining that mixed job and inflation data have created uncertainty, but the market's response indicates a readiness to embrace bullish trends:

[07:43]: "The market might have realized that it was getting a little overly pessimistic... and was overcorrected."

3.2 Job and Inflation Data Analysis

The hosts delve into recent job reports and Consumer Price Index (CPI) data. NLW highlights that lower-than-expected headline CPI figures have alleviated fears of persistent inflation, potentially paving the way for Federal Reserve rate cuts:

[08:00]: "Headline CPI was down for the first time in six months... It adds credence to the belief that perhaps even some of the previous negativities were based on a lag in the data."

Scott emphasizes the market's reliance on "animal spirits," suggesting that sentiment often drives price movements more than the data itself:

[09:51]: "The market is mostly animal spirits."

4. Changes in SEC Leadership and Crypto Regulation

4.1 Appointment of Paul Atkins

Scott and NLW discuss the impending confirmation of Paul Atkins as the new SEC Chair, replacing Gary Gensler. This leadership change is anticipated to signal a shift towards more crypto-friendly regulations:

[15:47]: "Paul Atkins sitting down his desk has 10 proposals sitting there for stuff they should actually do right away."

4.2 Implications for SEC Policies

NLW projects that under Atkins' leadership, the SEC will likely halt enforcement actions against major crypto exchanges like Coinbase and Kraken, fostering a more supportive environment for the industry:

[16:29]: "This is very positive and will be significantly meaningful in terms of its actual impact."

Scott underscores the significance of this shift, viewing it as a removal of governmental obstacles for the crypto sector:

[16:29]: "They're taking the governor off the crypto industry in the United States... All these things are going to be lifted."

5. US Government's Seizure and Return of Bitcoin to Bitfinex

5.1 Background on the Bitfinex Hack

The conversation moves to a high-profile case where the US government has decided to return seized Bitcoin from a 2016 Bitfinex hack back to the exchange. Scott compares this to a scenario where stolen personal property is returned to the rightful owner:

[17:31]: "The United States government is holding this as if they own the asset... It's like someone stealing my wife's engagement ring and the government says it's theirs."

5.2 Community Reaction and Implications

NLW acknowledges the mixed reactions within the crypto community, noting confusion and skepticism about the government's decision:

[18:11]: "The response to this has been like, huh, doing the right thing, not really sure what to do with it."

Scott highlights the bullish perspective, suggesting that returning Bitcoin to Bitfinex, a major and stable crypto institution, could positively influence the market:

[19:04]: "This is decidedly bullish... Bitfinex is a really good place for this to land."

6. CFPB's Attempted Rulemaking on Digital Wallets

6.1 Overview of the CFPB's Proposal

Scott introduces the topic of the Consumer Financial Protection Bureau (CFPB) attempting to extend regulations to digital wallets and payment apps, potentially impacting self-custody wallet developers:

[20:31]: "The CFP rule to apply Reggie to crypto... It’s unclear whether they intend to cover self custody wallet developers."

6.2 Analysis and Critique

NLW criticizes the CFPB's approach, suggesting it fails to adequately differentiate between custodial and non-custodial wallets, thereby overreaching its authority:

[20:31]: "They're trying to bury self custody... It’s not going to work if they intend to drop dragnet that in."

Scott concurs, expressing skepticism about the feasibility and impact of the CFPB's proposed rules:

[21:51]: "I can't see it."

7. Other Notable Stories

7.1 Treasury Official Scott Besant's Divestment

Scott highlights the appointment of Scott Besant to the Treasury, noting his decision to wind down his hedge fund and divest from significant crypto assets, including a $500,000 Bitcoin Spot ETF:

[11:21]: "He's actually going to do that... he's opposed to central bank digital currencies and much more likely to be crypto friendly."

NLW emphasizes that Besant's actions demonstrate genuine support for crypto, differentiating him from other officials who may offer only superficial endorsement:

[12:13]: "He's actually put some of his capital into it... he’s strapping in to go."

7.2 Chinese Hackers Breaching US Treasury Computers

The discussion briefly touches on a security breach where Chinese hackers accessed US Treasury computers, including Janet Yellen's laptop. The hosts comment on the public's reaction, including humorous memes promoting the Chinese app Red Note as an alternative to TikTok:

[13:31]: "Memes are hilarious... Americans love to twerk."

7.3 Potential Pardon of Sam Bankman-Fried

Scott and NLW speculate on the possibility of President Biden pardoning Sam Bankman-Fried (SBF), founder of FTX, as a final act, though they express doubt due to Biden's limited inclination to take such actions:

[21:21]: "I can't imagine this one being there... He doesn't have that left."

8. Conclusions and Final Thoughts

Wrapping up, Scott reiterates the significance of the Trump administration's potential support for cryptocurrency and the positive regulatory shifts under the new SEC leadership. Both hosts express cautious optimism, emphasizing the importance of the crypto industry maintaining integrity and avoiding scandals that could derail progress. They encourage listeners to stay informed and engaged with ongoing developments.

Scott signs off with his signature enthusiasm:

[22:36]: "All right, guys, that's all we got for you today. Quick Friday 5... Thanks, Tim. Later. Let's do."

Notable Quotes with Timestamps

• Scott Melker

  • [00:00]: "Donald Trump is expected to issue an executive order calling cryptocurrency a national priority... that's hyper bullish."
  • [03:12]: "There’s some conjecture that this could basically be the inverse Biden executive order..."
  • [06:47]: "Nasdaq futures jumping 1% as Fed rate cut bets revive. Bitcoin rises past 100,000 threshold amid risk rally renewal."
  • [15:47]: "Paul Atkins sitting down his desk has 10 proposals sitting there for stuff they should actually do right away."
  • [19:04]: "This is decidedly bullish... Bitfinex is a really good place for this to land."
  • [20:31]: "The CFP rule to apply Reggie to crypto... It’s unclear whether they intend to cover self custody wallet developers."
  • [22:36]: "All right, guys, that's all we got for you today. Quick Friday 5... Let's do."

• NLW

  • [01:23]: "There's a flurry of information around what might come with these executive orders... It really has to be actual action, not just symbolic action."
  • [05:35]: "Mark Andreessen has basically been living at Mar-a-Lago for the last month... 816Z is one of the more loud advocates for positive crypto policy."
  • [07:43]: "The market might have realized that it was getting a little overly pessimistic... and was overcorrected."
  • [08:00]: "Headline CPI was down for the first time in six months... It adds credence to the belief that perhaps even some of the previous negativities were based on a lag in the data."
  • [16:29]: "This is very positive and will be significantly meaningful in terms of its actual impact."
  • [18:19]: "The market is mostly animal spirits."
  • [20:31]: "They're trying to bury self custody... It’s not going to work if they intend to drop dragnet that in."
  • [21:21]: "He doesn’t have that left."

This episode provides a comprehensive overview of the current state and future prospects of Bitcoin and the cryptocurrency industry, influenced by significant political and economic developments. Scott Melker and NLW offer insightful analysis, blending macroeconomic data with regulatory changes to paint a bullish picture for the crypto market.