← The Wolf Of All Streets
The Wolf Of All Streets
The Golden Age Of Crypto Starts Now!
00:24:57
The Golden Age Of Crypto Starts Now!
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- [00:01]
Scott Melker
The golden age of crypto starts now. Not my words, but those of crypto and AI czar David Sachs and also of an official congressional hearing on digital assets. This is just one of the many stories that happened this week. We've got the Friday 5, NLW and I will unpack it all for you right now. Let's go. Let's do what is up, everybody. I'm Scott Melker, also known as the Wolf of all streets. Before we get started, please subscribe to the channel and smack that like, button right down below. This was a bit of a strange week in crypto. As NLW said to me right before the show, a lot of B level stories, but I would make the argument these would have been A level stories like a year ago. But now we're so used to huge stories every week that we're pretty indifferent.
- [01:04]
NLW
Absolutely. I think the other thing is a lot of it's in between type of things. Right. Little, a little hearing that kind of lets us know how partisan lines might be forming an introduction of legislation which is sort of the opening salvo of a fight.
- [01:19]
Scott Melker
Right.
- [01:19]
NLW
Like nothing big and conclusive. There are some, I think, you know, stories that are maybe contradictory of the sentiment and the feeling out there, which is maybe the most interesting part of this week. But we'll get into all that, I'm sure.
- [01:32]
Scott Melker
Yeah, we will. I mean, you take a quick look at the market and I think we have this just utterly flat, boring, sideways situation that's once again driving people nuts. Bitcoin is flat on seven days and you would think it was at zero. Right. And altcoins, largely, some of these are even up over the last seven days and you would think that they were zero. So I think that people are just looking for a catalyst to get excited.
- [01:56]
NLW
About, you know, the market. Very clear. The traditional markets hate volatility, or at least they hate, rather they hate uncertainty. Right. And I think we need a term that describes crypto hating. Non volatility. We hate it when things are only 10% this week. Oh my God, we absolutely hate it. Give us, give us agony or give us rapture, but nothing in between, ladies.
- [02:23]
Scott Melker
And gentlemen, meme coins. Right. That's exactly why that is such popular thing. But that is not the topic. First one Here we have SEC and Binance request 60 day pause in lawsuit as the agency shifts to be more crypto friendly. I think there's a sentiment right now that a lot of the aggressive actions by the previous SEC and Gary Gensler are likely to either disappear or be dramatically diminished. And we're in that kind of honeymoon period where we're trying to figure out what that's going to look like. This story is just one of many about crypto and the new SEC. Obviously we had Hester purse sort of laying out 10 priorities for what the new SEC would do with crypto. We had SAB122 reversed not long ago. And we also have, I believe today, the answer on Coinbase's interlocutory appeal or whatever lawyers speak, that is with the sec, which could give us even more clarity on what's happening there. Also, what I find interesting about this SEC and Binance story is that CZ is all over it. And he's back on X, by the way, all over Meme Coins and talking about crypto and talking about BNB and talking about finance. Seems like he may not be running it, but he's kind of running it.
- [03:30]
NLW
Yeah. Who knows? The biggest punishment for CZ was always him having to step down. I mean, that is a man who's meant to build companies and no amount of him saying he was going to go work on non profits or whatever could, could change, could change that. No, look, I, I think that when this changing of the guard happened and we started to get these new indications from the sec, the big lingering question, or at least the thing that people were waiting for, was confirmation that they were going to close the file on all these open cases, which sort of still stood out as, as potential, you know, pesky annoyances for these firms. And I think that the positive thing about this one is that this is sort of exactly what we would have expected, you know, fairly soon after this new SEC took power, which is a move forward to get rid of these cases that had been dragging these particular institutions for the last couple of years.
- [04:22]
Scott Melker
Yeah, I agree. I think they're going to go away and I think it's going to be massively beneficial to the industry. It's just interesting. I think the market doesn't really care at this point, but once again, I think that's completely fine. The SEC coming into line with everything we ever dreamed of. I believe maybe we'll get safe harbor, maybe we'll eventually get market structure and some clarity on what these assets are and what they could do. And we're going to actually get little deeper into the other agencies momentarily. But the next story today has to be Powell says new inflation data shows Fed has more work to do. I would say that the story is the entire two day testimony by Powell and all of the different things that happened, including him getting aggressively grilled about operation choke point 2.0, basically admitting that it happened, begrudgingly making a, a, basically a statement that it would not happen in the future. We have a lot going on with Jerome Powell this week.
- [05:18]
NLW
Yeah. I mean, so on that side, I think, once again, speaking of things that I think that we were just been anticipating and wanting, the more public acknowledgment of this operation choke point 2.0, the better in terms of the likelihood that it doesn't happen again. So that's, that's just nothing but positive in my estimation. I think that when it comes to the inflation surprise, you know, this is a thing that we've been nervous about or markets have been nervous about for, you know, ever since the, the, the cutting cycle began, really, that there would be something like this that really, you know, not only stayed the Fed's hand in terms of their pause, but also even potentially created the conditions where we could see rates have to go in the other direction. You know, this is a, it's just one reading, obviously, and I think it's too fast to, to, to overly, you know, to overly diagnose here. But you know what, what Everyone from the beginning of this cycle has not wanted it to be a repeat of the past where, you know, you think you got inflation tamped down and then it just rages right back.
- [06:18]
Scott Melker
Yeah, I've seen a lot of economists and armchair economists unpack this data, and it's extremely mixed on the opinions they have. Some people think that we're going back to 5, 6, 7% inflation in a matter of a year. Others say if you dig in and look at where the inflation came from, I eat eggs and shelter. There's a lot of lagging data and things that are very temporary. And you open up truflation and it says we're at 2.06% if you calculate it a different way. So I think the Fed is probably just going to stay on hold here until they get a lot more clarity. Once again, though, for me, operation choke point 2.0 becoming such a key issue at this point or this early in the presidency, being looked into so deeply. Hundreds of documents being release, the FDIC potentially getting rolled into the treasury, apparently. I mean, there's so much here. And, you know, I spoke to Caitlin Long yesterday in a recording. She said, listen, this is all great news, but, you know, Custodia Bank's master account is still on hold. We don't know how many banks are going to jump into this. We still have Michael Barr in power. There's a lot of things that still need to be cleaned up, but we're on the right path.
- [07:30]
NLW
Yeah, I think that the, the narrative shift is satisfyingly fast, but that is not the same ultimately as policy shifts. I think to your point though, it is, it is dramatic. I mean, even, even Warren having to sort of kowtow to the know, that shouldn't be happening, you know, kind of, kind of line is. Is reflective of just how radically, you know, the narrative around this has shifted.
- [07:55]
Scott Melker
Yeah. For anyone who missed that, Elizabeth Warren literally said it was a problem, that the crypto industry was being debunked. I didn't see that coming. Yeah. I guess every once in a while she has to say something intelligent. The next story we have is to me, very interesting, actually. So Coinbase profit revenue surge during Trump inspired rally. Consumer transaction revenue was up 179% sequentially. And they saw subscription services revenue as much as 765 million. And then you click over to Robinhood, it's on 8x jump in crypto trading revenues in Q4, 2024, putting pressure on Coinbase. So Robinhood did exceptionally well and the bulk of that was an increase in crypto. What I find interesting about this story is if you take a look at sentiment, as we've discussed over and over again, you would think that retail was dead and nobody was trading anything. And this is not Meme Coins, Right. This is Coinbase and Robinhood, who are probably the two largest exchanges touching retail and crypto in the United States with more of the conventional crypto assets, whatever that means, and not the meme Coin casino that we think is taking all the attention. So how do they grow so much?
- [09:07]
NLW
So one of the things that crypto Twitter does not recognize often is that retail is two entirely different groups. There are the denizens of Said Said seen the, the degens who are, you know, meme coining and fart coining and all this sort of stuff. And then there's the vast majority of what actual retail is, particularly in the United States, who are using Robinhood and Coinbase and are, you know, looking at the top 20 alts that aren't bitcoin, not the. These, you know, these insane meme coins. Right. If you look at like litecoin, I think was up over the last month. You know, the other sort of none, none of the other top 20 altcoins are down more. Ethereum's, I think is the most down, is like down like 16% or so something the rest of them are Sort of, you know, whatever, like flatish or, you know, down slightly. But I think that there's an entirely different sentiment profile for the people who are just not paying attention to Twitter, you know, for their own sanity. And that is actually an increasingly large portion of what retail is, which is why it's such a jarring disconnect between what it feels like and, you know, the mean streets of crypto Twitter and, and the behaviors that we're actually seeing. You know, I think one of the things that's interesting to me about this is, you know, Wall street had gotten used to, I think, coinbase outperforming when markets and crypto came back. The difference in, in these types of results, in addition to them just, you know, beating estimates by, by a significant margin is the sheer volume of these things. And now Robinhood being right there with them, I think is a clear indicator that this is not just some small force that you cyclically look at when things are going well. These are, I mean, these are incredible amounts, incredible amounts of money being made from, from this particular type of trading. It is, it is, you know, it is competing aggressively with stocks as a thing that people are doing in a way that Wall street cannot ignore.
- [11:08]
Scott Melker
And this is not leverage, which I think is notable and further proof that it's not the degens. Right. Because the same degens who are trading memes now are probably, you know, aggressive by bitcoin leverage traders on Bitmex at all. And I just find it very interesting to note that this is looking back and we did have this huge XRP run and hbar run and algo run. There was that moment a few months ago when all of these dinosaurs went up 6, 7x. Those are the assets that are here. And since this is looking back at the previous quarters and previous years, got to remember a lot of these alts did pump like crazy.
- [11:44]
NLW
Yep.
- [11:46]
Scott Melker
The next story that we have here going back to the regulators mount up. Trump plans to pick Quintenz as derivatives regulator head. This is pretty amazing. So Brian Quintenz obviously was in previous administration working at the cftc. Now likely to come back and head it. Where was he in between at Anderson, Andreessen, Horowitz. Right. At a 16C degenning alta in the altcoin space on behalf of them obviously at a, you know, regulatory and advisory role. Even when he was at the CFTC previously, he was extremely pro bitcoin, pro innovation, pro crypto in general. Coincidentally, I also happened to talk to Chris Giancarlo yesterday who was the chairman of The CFTC when Brian was there. And he could not say enough positive and wonderful things about what the CFTC is likely to look like under Brian Quintenz. And then just to note, it's in that article as well, but this one went basically unreported. But Donald Trump taxed ex Spitfury Crypto Exec to lead US Bank Regulator Right now we have Jonathan Gould at the OC to be the head of the OCC which is one of the major bank regulators. This guy was literally a bitcoin miner. I mean this is, you can't write this stuff right now how incredibly bullish it is for our industry.
- [13:02]
NLW
Yeah, I think so with Brian, you know, having now covered this industry for a very long time. Quintons was a loud vocal advocate way, way early on right back in, you know, the, the ancient days of 2018, 2019, 2020, you know, so he's been interested in this for a while. Like you said, he, he did a stint doing policy for a 16Z but got to be excited about that one. And then on the, on the, on the OCC side, you know, this is quietly one of the more influential but less known roles. So I think that this is, you know, we've had. So this was the position that Brian Brooks had for a very short period of time and really tried to, you know, basically institutionalize the inability of banks to do exactly what they did during operation choke point 2.0. But all that was revealed the second or reverse rather the second that Biden got into power. And you know, interestingly, the OCC during most of the Biden administration, it had a leader, it had leadership that wasn't pro crypto but was at least a sort of general like thoughtful person who wasn't sort of just out for blood in the same way that the sort of Warren camp was. And, and it's notable that they weren't necessarily, you know, as implicated in the OCP 2.0 stuff because of that, but still having a, having a pro crypto regulator in that spot I think is nothing but, but incredibly positive for us.
- [14:31]
Scott Melker
Yeah, I mean as a quick review and I'll probably miss some. So now you have Jonathan Gold at the OCC who was a bitcoin miner. You have Brian Quintenz who is at a 16Z likely heading to CFTC and heading a CFTC that already has a bunch of pro crypto, pro bitcoiners on it. Right. So even the temporary head there fam, she is obviously pro crypto. You have Atkins coming in to replace Gensler with a Republican majority, that will be Atkins, Purse and Ujeda. And then you can go step by step down every single cabinet position, whether they're financial or economic or crypto related or not. And it's all somehow bitcoiners. Now, I'm not going to make the claim that they're being appointed because they're bitcoiners, but I will make the claim that the kind of people that Trump wants in positions of power are the type of people who have done the work and understand this industry for whatever reason.
- [15:24]
NLW
I mean, listen, I think that this is, you know, the debates could be endless around, you know, who gets what positions, for what reason. But I think that there's a strong argument to be made that it would make sense theoretically to appoint people who have been correct about the trajectory of the financial system and the value of these sort of innovations earlier than their peers and colleagues have. That shows a level of engagement and foresight with the future that others don't have and in fact, have been on the exact opposite side of. So if you are looking for people to make policy with the future in mind, rather than just, you know, the past and current static situations, it makes sense, or stands to reason, at least, that you would choose people who have kind of been on board with the future for a little while now.
- [16:09]
Scott Melker
Right. And they're not just on board with the crypto future, to be fair. These are people who embrace AI, who are technologists, who believe in entrepreneurship, and basically just want to re unlock innovation in the United States. But interesting that every single one of them has done the work, like I said, and either owns this stuff, has worked in the industry, or is just generally a proponent. I think almost every single one of them has actually owned Bitcoin, which is pretty astounding. And now back to Capitol Hill. It's hard not to just talk about politics endlessly right now, but crypto industry gets chance to make its case to U.S. congress. This was a hearing with the very loaded title A Golden Age of Digital Assets. Hence our title, the Golden Age of Crypto Starts. Now. You may remember that in his hearing on crypto, David Sachs also used the term golden Age and made sure that the heads of the four committees there also said golden Age. This seems to be our new vernacular. And the shift in having a congressional hearing like this, as opposed to the ones of the past, is exceptionally dramatic.
- [17:10]
NLW
Yeah, it is. Although, you know, one of the things there was. There was nothing substantial from this hearing. It was a, you know, highly. Yeah. And this is this is par for the course. In fact, there's a, there's a real nature is healing aspect to congressional hearings no longer being front page affairs. I think we should be pleased with that. As a general, as a general phenomenon, however, I think that, you know, watching it a little bit closely, it certainly made clear as well that it's not going to be a bipartisan cakewalk to get things done and that there are going to be battles. It is still here. So, you know, it was, it was interesting, if for no other reason than getting a pulse for, you know, what the likely attitudes of congressional opposition are going to be like when it comes to specific issues.
- [17:58]
Scott Melker
That's right. Throw it on the table and see which sharks bite and how hard. Because this was the opportunity for a lot of the anti crypto army to speak up and they somewhat didn't. I think maybe alongside this story we should note the amount of stablecoin registry legislation that's being proposed and maybe the order in which we will see legislation. I think we will get stablecoin first, maybe market structure second and then it's, who knows. But it is interesting that we have stablecoin legislation being proposed by both parties. Yeah.
- [18:28]
NLW
So it's interesting if you dig into the Waters bill, it's being positioned as basically just what she and Patrick McHenry figured out previously. But boy, is it not. It is. It is a bill that is designed to have the veneer of total reasonableness with endless landmines and gotchas. You know, someone said that they wouldn't be surprised if, if you told them that the American Banking association wrote this, they wouldn't be surprised. So, you know, it's clear that the, the opposition knows that they have to be more clever with their, with their fight, you know, against crypto. But it's going to be, you know, in these sort of tricky means, you know, by sneaking, you know, aggressive punishments in and, you know, regulatory loopholes and things like that. So, you know, not as, not as sheer bullish as it, as it seems.
- [19:17]
Scott Melker
Just because it says we're going to get legislation doesn't mean that we're going to like it. And I think everyone at this point would be very skeptical of something coming from Maxine Waters, who's been so critical and of course was so very close to sbf. Right. And I think just as a side note, as when she proposed this legislation, JP Morgan came out, you guys may have missed this, and basically said, well, in a situation like this, Tether may need to sell all its bitcoin holdings or back out of the United States. Which by the way, is true. If there's stablecoin legislation that says you have to be a United States bank chartered with depository institution to have a stable coin in the United States, that could be problematic for all of the crypto incumbents and even for smaller institutions that want to have stable coins. But Paolo Arduino, boy, he from Tether, he shot right back at that and slammed that JP Morgan analyst. But all of this, just saying, man, there's a lot of landmines and this could still go wrong even though we're getting legislation if it's not crafted correctly.
- [20:16]
NLW
Yep. The flip side is holding aside waters or you know, whoever in the Democrats is looking for, for these landmines, there actually is a ton of common sense middle ground where stablecoin legislation is the type of thing that, that you can actually build some amount of bipartisan agreement around, which I think is fairly important early in this congressional cycle. You know, the natural tendency, I think, for this particular Congress would be to be absolutely partisan everything because, you know, the Democrats basically feel like they have to, or at least have historically acted like they have to be unified in opposition to Trump no matter what it is. Right. And the Republicans. So, you know, look, there's, there's a positive chance. You've got the Torres wing of the Democrats who were likely to push back for kind of some of these common sense changes to, to this legislation. I think it's going to be hard to defend a lot of the things that are clearly put there as gotchas rather than as, you know, considered policy. So I don't know, maybe, maybe it goes positively and we actually get some, some nice progress on, on this particular set of rules that allow things to move forward.
- [21:26]
Scott Melker
Right. So you have to, if they're going to slide those landmines and they're going to have to do it very quietly and they're going to have to work the room to make that happen. Because we all know that being a part of the anti crypto army is very unpopular right now and not somewhere that a politician who may need to be reelected in the next two to four years wants to be.
- [21:43]
NLW
I think if, if ever, if anyone in D.C. has learned anything, it's that the crypto industry is too on it to, to be tricked by landmines. You know, like the first time they tried this was the infrastructure bill, however many years ago, and it ended up with the infrastructure bill being delayed for like three weeks because they made this. Right. And that was before we were even well organized.
- [22:04]
Scott Melker
God, about that. You are.
- [22:06]
NLW
You are not.
- [22:06]
Scott Melker
One line on crypto blew up the entire bill. I forgot about that.
- [22:09]
NLW
You're not going to sneak stuff past this group. It's just not going to work. So whatever. I would, I would say for the, for the sake of just efficiency, don't, you know, try other strategies, man.
- [22:20]
Scott Melker
Yeah, I mean, that's all of our five stories for the day. We kind of have this story here to bookend, which I've talked about multiple times. I showed the tweet from Matt Hogan. There's a massive disconnect between retail and pros in crypto. I'll read what he said. There's an absolutely massive disconnect between retail and professional sentiment in crypto right now. Retail sentiment is the worst it's been in years, while professional investors are extraordinarily bullish. It's like living into a completely separate world. We somewhat talked about this at the beginning, but just a reminder that all of the things that we see as FUD and negativity and sideways price action and meme coins, most of that is not even on the radar of the big money and the big institutions that are just starting to get interested in this industry. To me, what he's describing is the recipe for a massive bull run. You know, the big money moves in first, prices go up a bit. We all know that the greatest marketing for bitcoin is higher prices or for crypto in general. That's what gets retail to FOMO in nearer to the top or on the way up. So just important to remember that it's almost all good news right now, regardless of the price of the assets you may be holding.
- [23:20]
NLW
Yeah, I mean, ultimately, when you dig into this, it's not that complicated. It's just meme coins are ultimately. They have not been as exciting to people as the previous alt innovations. Right. They're not as exciting as ICOs, they weren't as exciting as DeFi, they're not as exciting as NFTs. And so they're totally conditional upon the price. And it's just sort of, you know, it's a snake that's eaten its own tail. Like, you know, the only people that can do anything with them are insiders. There's very little, like, room to actually, you know, play that play in the casino. So, of course, the people who are sort of focused on that are depressed because there's nothing there. Right. You know, we, we need a better generation of. Of altcoin excitement basically, for, for that side of the market. To be stoked. But to your point, there's plenty of people out there who don't give a crap about any of that, who are having a grand old time right now. And. And it's probably better if you're trying to understand the full, full range of sentiment to, to focus over there rather than just on the. The loudness on X. Yeah.
- [24:17]
Scott Melker
If you don't like the price, just wait a little bit. This is. This is bitcoin after all, guys. That's all we got for you today on the Friday 5, give NLW a follow on X and check out Breakdown and his channels, everything he has for you, because he does this every single day, man. Thank you as always, for a great Friday show to all of you. See you on Monday. Bye. Let's go. That's dope.