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The Wolf Of All Streets
Super Bullish: Bitcoin Mania Returns! S&P Embraces Crypto, Meta Preps Stablecoin
00:19:58
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- [00:01]
Scott Melker
Bitcoin mania has returned as more companies are becoming bitcoin treasury companies. Coinbase has added to the S and P. Galaxy Digital going public today and Etoro having a smashing debut ipo. A lot going on in the crypto market. Good thing we have NLW here to unpack it all on the Friday 5. Let's go. Let's do what's up everybody? I'm Scott Malka, also known as the Wolf of all streets. Before we get started, please subscribe channel hit the like button. We got super rugged by Streamyard before. Even just now when I tried to play the theme music, it just sat there and did nothing. So clearly we are living in the glitch. I'm used to living in the glitch on Twitter spaces like every single time, but not usually on YouTube.
- [01:02]
NLW
Yeah, we actually have had a shockingly few technical issues with this. So we were due.
- [01:08]
Scott Melker
Yeah, we were definitely due this. I had to somehow myself attempt to set up a stream here, which is interesting. The YouTube link now has no, like, description or anything. But hey, let's do a show. The first thing on the menu before we dive into all of the things bitcoin related is tariffs and inflation. We're gonna knock it out and get it out of the way. Obviously we had a CPI report for April that came in lower than expectations, meaning that those who are expecting tariffs to have an immediate effect on inflation has not happened. Trump says Fed must lower rates after soft inflation reports. So once again, going back to bullying Chairman Powell to try to get this done. And of course we just had us consumer prices rose less than expected expected in April. A lot of commentary on why this happened, but I'd love for you to break it down.
- [01:59]
NLW
Yeah, I mean, look, I think that there are, there are a couple things that are going on here. One, maybe the, the relevant context for this is markets are watching this really closely because part of, you know, the, the next set of macro factors outside of tariffs are going to be rate policy. And Powell can't really do anything living under the. The gun of potential increased inflation. So the Fed is watching both inflation and potentially softening labor markets really, really closely. And you know, as markets and the administration want Powell to cut, there are a set of things that have to happen for him to consider that. One of them being not seeing a bump in inflation. Now, one print that is sort of, you know, light like this does not mean that Powell is going to jump out of his seat to go cut rates, but it's certainly positive, especially, you know, people were Wondering if we were already going to see some of these tariff changes show up in this. My sense is that it's probably a little bit too soon to see those changes really show up. So it's kind of, you know, the next couple of months are going to be more significant when it comes to the Fed's analysis. But you know, especially as like we discussed last week, markets are looking for reasons to be enthusiastic again. They're looking for reasons to be less concerned about all of these big changes. And this is an inflation print that fits firmly in the, okay, maybe this isn't so bad. Maybe we were overreacting sort of, you know, set of, of, of factors and that's a positive thing, at least from a, again, a market perspective.
- [03:29]
Scott Melker
Yeah. Anna Long, who we reference from Bloomberg all the time on the show because Mike McGlone works with her, said the Fed likely won't take much signal from April CPI report as we think their internal forecasts point to higher inflation in months ahead. We maintain our baseline that the Fed will cut rates only once this year by 25 basis points at the December meeting. So a lot of people still not buying it. She said that the inflation impacts won't be felt for quite a while. And if you actually dig into the numbers, electronics were up the highest they've ever been and things directly impacted by 130 plus percent tariffs or 120% plus tariffs in China were impacted. And it's going to take a little while so I guess we'll see what happens. But I think the most important point for the purpose of this show is what you said, is that markets just want an excuse to go up.
- [04:12]
NLW
Yep, yep. I mean look, it was, there was this only had a chance to be bad. It couldn't really be, you know, anything other than baseline and, or, or really bad. And so, you know, markets are just glad that it wasn't bad.
- [04:27]
Scott Melker
Yeah, that makes perfect sense. The second story of the week obviously has to be Coinbase mania. Coinbase stock source 24 is inclusion in S&P 500 singles. Dramatic turnaround for crypto industry. This was huge. It should be noted that they weren't just included, they weren't coming in at 500. They're in the top 150 companies in the S&P 500. And obviously we saw the stock soar massively. Now we have this situation where even the biggest haters of crypto and bitcoin definitely have exposure to crypto and bitcoin now because everybody is indexed to the S&P 500 and has some exposure there. Really interesting. Brian Armstrong, obviously having his celebration here. He says it right there. Crypto's about to be in everyone's 401k. But then we have to talk about the. Of course, because it's crypto side of what happened. Coinbase gets public, it's all hype. Their stock goes up massively, and then they have an admitted data breach, tried to get ransom for $20 million, and have admitted that we're all getting fished by weird texts because one of their employees basically got bribed to give away our information. Good times at Coinbase.
- [05:32]
NLW
Yeah, I mean, this is just. Look, you know, it's a really unfortunate timing. The reality is that this is just a. This is just part and parcel of existing and operating in the world now. You know, I think that the market.
- [05:45]
Scott Melker
Not just crypto. Yeah, exactly.
- [05:47]
NLW
I think the market's reaction to it is fairly muted for that reason. You know, it's. It makes for a good companion headline for outlets that are looking for a positive story followed by a negative story. But ultimately the bigger deal, obviously, when. When the history books are written, is Coinbase entering The S P500, as you pointed out. You know, even the haters having exposure now in. In a way that they don't get to opt out of. And more than anything, just the sort of relentless march of legitimization of the. Of the industry that this represents.
- [06:16]
Scott Melker
Yeah. So this is obviously a huge story. I don't think anyone saw it coming. Really interesting. Without any anticipation or any major pump in the stock ahead of it. So I thought that was really interesting. Just for quick to wrap up the Coinbase side of this, they think that it could cost about 180 to 400 million to deal with that data breach. I think last month someone reported there was about 40 million lost to these phishing attacks on Coinbase alone. So obviously a problem, but I definitely applaud them for looking to solve it. But alongside this news, we have this IPO mania. We have Galaxy Digital going live today. Of course. This article reports 295 million Q1 loss before a NASDAQ US listing, but that is happening today. Great to see that for Novogratz. But perhaps the biggest story is the success, which we've talked about a few times, of the eToro IPO. Right. It started at about 45 bucks, ended up raising at 52 bucks, closed the first day of trading at 67 bucks. This is the first time in a very long time that I've seen an IPO at all. Much Less one in crypto do so well coming into it and then into the first days. We can get into this other story later, but obviously they're a crypto business, but it's not the bulk of their business anymore.
- [07:32]
NLW
Yeah, I mean, listen, you know, I think that the IPO window has been closed for an enormously long time. And I think that this was very surprising to people to see, as you pointed out, an upsizing of the initial price, an over, you know, more demand that they could handle, and a pop on the first day. Like, we just haven't had IPOs like that in. In any area for. For a very long time. You know, for me, as obviously a single data point is not a trend. But you have to think that a lot of companies who were maybe holding back from their IPOs are now saying, man, is this the window? Do I. Do we. Do we get in now? And so I will be really interested to see, not just in crypto, but in general, there are. There are a slew of companies that have been hanging back, you know, so. So will we see kind of a rush in? I'm not sure, but it's, you know, very positive. Because, listen, as much as Etoro can say that it's other things, like, I think it is broadly associated with crypto, I don't think anyone's getting into this thinking, oh, yeah, and they also do crypto. You know, it's super bowl ads were crypto. It's, you know, it's just. It's crypto through and through.
- [08:42]
Scott Melker
So, yeah, I mean, it's an honorable mention. Has to be Robinhood's acquisition of Wonderfi this week in Canada. And big news, obviously, that Robinhood's going to Canada. But the bigger news, that they decided to go crypto first, it's kind of a signal of the same thing.
- [08:56]
NLW
Yeah, Boy wonderfi, The stories, the stories I have with.
- [09:01]
Scott Melker
Oh, well, yeah, from the ftx days and Mr. Wonderful, I can't even imagine one day we'll, you know, have some drinks on a Friday morning and we'll share them all here. Couple tequila shots and get you loosened up and see what you got.
- [09:13]
NLW
Yeah, I had no. I will say publicly for the record, I had nothing to do with that particular deal, of course.
- [09:18]
Scott Melker
Anyways, so. Yeah, but Mr. Wonderful, seriously cashing in once again. Anyways, good for him.
- [09:24]
NLW
He's much nicer than I thought.
- [09:26]
Scott Melker
Yeah, he's. He's a pretty nice guy. I've met him quite a few times. Anyways, the next story has to be bitcoin treasury companies, obviously. So we got David Bailey of Bitcoin magazine and Bitcoin native holding company Nakamoto announced merger with kindly MD to establish Bitcoin treasury company. I think they raised about 700 million if I'm not mistaken. But it was supposed to be two or three. So once again, this was sort of a story of oversubscribe as we cook through these Tether buys 459 million Bitcoin in Bitcoin should say for 21 capital. This of course, the company formed by SoftBank Tanner Fitzgerald Tether, we've talked about it led by Jack Mahler. So we're seeing them actually make a big public buy. Meta Planet now has more bitcoin than El Salvador. So listen, we know that microstrategy or strategy has continued buying by the, by the billions. Saylor isn't stopping, but the clones doing it slightly differently are popping up everywhere. I have my concerns about this, to be honest, if it continues. But right now, nice to see these companies buying bitcoin.
- [10:34]
NLW
Yeah, I mean, listen, this is the week that this trend tipped over into an area where some people are worried about it being this cycle's bubble. Right. And, or just have concerns around what it actually means. I think what's interesting to watch is the non bitcoiners are always going to have their critiques and whatever. Who cares about sort of Peter Schiff's analysis about things like this? But you're seeing more diversity of opinion within the bitcoin community as well. Marty Bent, who obviously, you know, from, you know, content creation and bitcoin investment fame, had an interesting tweet where he basically said, look, this is cool, but what's even cooler is actual operating companies building real things, using Bitcoin as a Treasury asset, you know, to, to build things rather than just sort of being a bitcoin only game. And I think that it's, you know, listen, I think it's, it's healthy to have an emergent conversation because for a very long time, obviously, you know, no one is going to be critical of Sailor or MicroStrategy because they're, they're keeping us afloat for, for a good portion of time there. But look, markets right now seem to really like this. They're willing to pay, you know, double what bitcoin costs to get in on these companies. And, and so we'll just see how that shakes out.
- [11:53]
Scott Melker
Yeah, I just don't want to see 10, 20, 30, 40, 50 of them. Right. I'm here for every single company in the world adding some Bitcoin to their balance sheet. But effectively becoming a hedge fund to manage a treasury of bitcoin and find creative ways to buy it concerns me because as much as we don't think there could ever be a bitcoin drawdown again in this new era of the super cycle and euphoria, well, if Bitcoin goes down 50, 60%, these people are going to be aggressively tested as to their willingness to sell. I'm not saying it will cause the bubble. I'm saying that if we have a 40% retracement, it turns into a 60% retracement when they all sell off.
- [12:29]
NLW
Yeah, absolutely. It creates structural risk that Bitcoin did not have before, that even its incredibly dedicated Hodler base cannot beat. Because we're not dealing with like individual people deciding whether or not to sell bitcoin. We're dealing with forced sellers, you know, and that's a very different dynamic that we've witnessed over and over again. Look, I will say this right now. There is no way, no way, if these companies continue to build that some version of that doesn't happen at some point. It is just, it's impossible for it not to, that is, there's, these are.
- [12:57]
Scott Melker
Actively managed humans up just, it is what it is. Yeah.
- [13:01]
NLW
So, you know, there are lots and lots of different ways it plays out, how severe it is, has to do a lot with management and the way that things are structured and like, there's plenty of ways to de risk those things. These are all smart, thoughtful people who have, who are not immune to these sort of things. So I, I think that there's still plenty of room for optimism and excitement. I think the fact that the market wants this is validating. So it's a good thing. Now it just creates new risk, you know, but new things create new risk.
- [13:28]
Scott Melker
I, I, I mean, these are three groups that I'm perfectly happy are doing this and I think are responsible and understand it. Like I said, it's the 10th, 11th or 12th one that jumps in at the dead top and goes all in and gets wrecked. But hey, we'll see what happens. Our Next story here. SEC's crypto broker rule likely to get overhaul. Atkins says. I guess we can just wrap this all one up in Paul Atkins in general. He gave the keynote address at the Crypto Task Force Roundtable on tokenization. Clearly a massive bitcoin bull. Crypto bull. Who gets it, Wants this industry to thrive in the United States. And of course US SEC considers conditional exemption for tokenized securities. This kind of A reignition of Hester Purse's safe harbor sec is pretty favorable to crypto right now. A little different than in the past.
- [14:17]
NLW
Yeah, I mean, look, I, I think all of us who were so excited about MIT lectures are still a little bit, you know, shell shocked and, and not willing to be as excited about this one particular thing as perhaps we have in the past. But all signals are positive and I think that it, you know, to me, one of the big unlocks has always been this sort of, you know, the safe harbor idea. Whatever version of it becomes real where crypto, instead of debating why crypto isn't equity, like, it is allowed to explore its equity like properties that are equity like, but not equity exactly in a place where you're not going to get sort of like destroyed either, you know, from a, you know, mismanagement perspective or from a regulatory perspective. I think that a lot of the exciting and interesting things that crypto could do live in those realms of sort of like what was previously just an unregistered security. And so I would be very enthusiastic about there being a place, you know, where people can experiment and explore things. I think a lot of really interesting things come out of that. I think that more than anything we've seen so far would ignite a new sort of, you know, bull run, whatever, just like actual cycle of innovation and enthusiasm and potential new participants. We're just, we've sort of scraped against all the things that aren't security ish that we can do, you know, and.
- [15:40]
Scott Melker
We'Ve had obviously a lot of positive rhetoric from the administration and from the regulators about bringing crypto home and United States becoming the crypto capital of the world. These are the actual steps that prove they mean it.
- [15:53]
NLW
Yep.
- [15:53]
Scott Melker
Right. So we need to see these things happen in my mind.
- [15:56]
NLW
Yep. I also think that the faster we can get safe harbor type rules in place that allow people to get in and go through a full cycle of being in a safe harbor and whatever sort of registration they have at the other end of it, the harder it gets for an unfavorable administration to just shift it out. Right. If there is a new structure that's built that is proven to, you know, allow for these sort of opportunities without wrecking retail, you know, it creates a lot more inertia for, for someone to have to sort of unwind that later.
- [16:26]
Scott Melker
Yeah. And the final story that we have today is surrounding stablecoins in General. There's more UST and DT in circulation than ever as Tether supply crosses 150 billion Mark Clever tweet here from Palo Arduino, the CEO of Tether. 150 billion next door. 1 trillion. That's a big jump. But hey, I'm here for it. And of course in the midst of the stablecoin madness and maybe we should even talk about the fact that there's been a bit of thawing again on the stablecoin legislation and maybe we will actually see that soon. But we have this guy Mark Zuckerberg back Meta and talks to deploy stablecoin. Three years after giving up on landmark crypto project. We went from Libra to DM to nothing to now they're coming back with a wallet potentially and a stable coin at Meta. Lots to talk about here on stable coins.
- [17:14]
NLW
100 inevitable. Like it made sense why Zuckerberg wanted this the first time. Yeah, it just was the US was absolutely not about that. It was a really bad time for him politically. He had radically underestimated how angry people were on both sides of the aisle coming off of the previous election. So it was never going to happen. Right? It was very clearly never going to happen in that old version. But to the extent that big tech companies are allowed to issue stable coins, they will all do it. They will all have their own internal currency. It's just going to make sense for them. You're going to have an on ramp where you convert your USD into you know, Instagram coin or Meta coin or you know, LinkedIn coin which you know is will be the, the lamest of them of course and it's just going to be like that. So I mean honestly though, the, it is no guarantee that that is a thing that will be allowed to happen. In fact some of the, some of the, the Republican holdouts to the stablecoin legislation, that is the exact thing that they do not want to happen. I think Josh Hawley, that's sort of one of his biggest concerns is he does not want big tech to be able to accrue more power by virtue of having a stable coin. So no guarantee that it'll actually be regulatory enabled. But to the extent that it is, you better believe Zuckerberg will be there first.
- [18:29]
Scott Melker
And do we believe that we're going to actually get this legislation now that it's been halted and the initial vote sort of failed?
- [18:35]
NLW
I think yes. I actually think that it just, I actually think that the Democrat, the anti crypto Democrats don't did themselves a real disservice. I think that they looked petulant and silly. I think that they frustrated their peers. Who were you know who do have really big issues with the way that the legislation was written but who actually still wanted to get it done. I think that sort of like obstructionism is, it's, it's costly political theatrics and so you know, I think that we will get there with something and, and I, you know, I don't know, I don't think that it's going to be much better for that walkout that was seen last week but we'll see.
- [19:16]
Scott Melker
Totally agree. That was it. We cooked through it despite the technical issues and me having to play producer and set up a street stream in less than three minutes. But I think we're, we're amazing to be honest.
- [19:27]
NLW
There you go.
- [19:28]
Scott Melker
Amazing. Nlw, thank you so much as always guys, follow, listen to the breakdown. Follow him at NLW on X and otherwise we will see you all next Friday. Thanks everyone. Thanks man.
- [19:40]
NLW
Later.
- [19:42]
Scott Melker
That's dope.