The Breakdown - A Mid-Year Bitcoin Check-In

Episode Date: July 3, 2025

We're halfway through a wild year for Bitcoin and crypto, with treasury companies stacking sats, ETFs finally breaking through, and Robinhood diving deep into tokenization. Amid a noisy debate on market manipulation versus genuine growth, NLW unpacks the key narratives shaping Bitcoin’s trajectory into the second half of 2025. Enjoying this content? SUBSCRIBE to the Podcast: https://pod.link/1438693620 Watch on YouTube: https://www.youtube.com/@TheBreakdownBW Subscribe to the newsletter: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://blockworks.co/newsletter/thebreakdown⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Join the discussion: https://discord.gg/VrKRrfKCz8 Follow on Twitter: NLW: https://twitter.com/nlw Breakdown: https://twitter.com/BreakdownBW

Welcome back to The Breakdown with me, NLW. It's a daily podcast on macro, Bitcoin, and the Big Picture Power Shifts remaking our world. What's going on, guys? It is Wednesday, July 2nd, and today we are doing a mid-year check-in on Bitcoin. Before we get into that, however, if you are enjoying the breakdown, please go subscribe to it, give it a rating, give it a review, or if you want to dive deeper into the conversation, come join us on the Breakers Discord. You can find a link of the show notes or go to bit.L.Y, slash breakdown pod. Hello friends. Quick administrative note before we dive in. We of course have the July 4th holiday coming up in the U.S. That's happening on Friday, and so we will be off tomorrow,

the third, Friday the 4th, Saturday, just because we are always off on Saturday, and then we will be back with our normally scheduled Long Read Sunday on Sunday and then back to our regular programming next week. Now, it is July 2nd, which means not only are we officially halfway through the year, we are also now officially closer to 2050 than we are to the year 2000. And so what more appropriate show than to take a mid-year gut check on the state of Bitcoin and crypto more broadly? The first half of the year has been absolutely hectic. We had the first crypto president and all the consequent policy changes that came along with it. Stable coins took Wall Street by storm. What seems like thousands of Bitcoin Treasury companies sprang onto the scene. And on the macro side of the house, we've had

trade wars, real wars, and huge fights around the funding of the U.S. government. Heading into this holiday weekend for the U.S., things are slowing down at least a little. And so with the sweet allure of barbecue just around the corner, let's take stock of the major narratives in the cycle and check in on how people are forecasting what's going to happen with the back half of the year. Let's start with Bitcoin price, because even there, we have some wildly divergent views. Crypto Twitter is getting extremely loud that the price should be higher after all of these Treasury company announcements. Many are screaming about paper Bitcoin, market manipulation, and a general feeling that the cycle is being suppressed. On the other side

of the fence are the Tradfai newcomers, who seem pretty satisfied relative to other investment options. Bitcoin is up 13.2% year-to-date and 68% over the past 12 months. That performance is outrunning the NASDAQ, which is up around 5% this year. Bitcoin is even outpacing in video, which is up a little over 10%. It's basically just gold that's outperforming Bitcoin right now, with a 27% gain so far this year. Aaron Berger, the CEO of Crypto Strategy Firm Collective Shift, is shaking his head at the state of the discourse, commenting, price suppression keeping our gains down.

By the way, 68% returns and you're in the top 1% of investors on the planet. Now, one of the sneaky Tradfai narratives building in the background is that Bitcoin simply refuses to go down. Many assume that when the stock market dropped during tariffs in the Middle East conflict, Bitcoin would have absolutely collapsed. While it didn't act as a safe haven, simply surviving major shocks changes the math for institutional investors. Hugh Hendry recently said he's thinking of selling his home in St. Bart so he can invest 10 million in Bitcoin. He commented,

it's just performed really, really well in a risk-off environment. It's going to trade at a capitalization greater than gold. When it trades at a million bucks, Bitcoin is boring, but it's not there yet. Trader Tyler Neville remarked, when one of the best global macro investors and divergent thinkers of the last 30 years tells you he wants to sell his house to buy Bitcoin, you should be paying attention. Still, looking ahead to what it will take for Bitcoin to surge higher in the back half of the year, Bitfinex believes we need to see a macro tailwind. They know that the past month exhausted traders with the events of June seeing a massive 7% drop in futures open interest. That goes some of the way to explaining Bitcoin's range-bound trading. With unstable geopolitics, there's very little enthusiasm for getting all

bulled up heading into the summer. Q3 is historically the worst performing quarter for Bitcoin. The average price movement is just a 6% gain. The real story is the lack of volatility. The largest price movements for Q3 over the past two cycles were a 25% up in 2021 and a 23% drawdown in 2019. In each of the other quarters, 50% price swings are relatively common, and in some years, even 100% gains were made. Bitfinex analysts wrote, for new all-time highs to be reclaimed, a catalyst either in the form of macro relief, strong ETF flow momentum, or a breakout in global liquidity will be necessary. The most likely catalyst on the board is aggressive Fed rate cuts.

Nikolai Sondergaard or research analyst at Nansen said, this is, in my opinion, the biggest thing to look out for, which would turn the market sentiment around to be one-directional, as opposed to wait-and-see. For now, however, wait-and-see is the Fed's stance. The market isn't expecting the first rate cut until September, and any acceleration in that timeline probably means bad things are happening in the economy. Sondregard added,

We're still not in a spot where we can comfortably predict a direction for the market and are at the mercy of geopolitical happenings in U.S. market decisions. Looking out to the end of the year, Bitwise are tentatively sticking to their $200,000 Bitcoin call, however, their outlook on Alts is far less optimistic. CIO Matt Hogan wrote, It's been a mixed year for crypto asset prices. Bitcoin hit a new all-time high of $112,000 in May thanks to strong ETF flows, growing demand from Bitcoin treasury companies and the creation of a U.S. Strategic Bitcoin Reserve, but Ethereum and Solana are down year-to-date, and macro risks have kept the bull market from kicking into overdrive. Hogan sees tailwinds coming from

crypto legislation, growing institutional demand, and stablecoin adoption. He wrote, bottom line, we're holding firm to our Bitcoin $200,000 prediction, as there is simply too much institutional demand for Bitcoin to keep prices flat for long. We're less confident on Ethan's soul, but hope that rising interest in stable coins, ETF approvals, and the emergence of Ethan Sol treasury companies can drive prices substantially higher. Today's episode of The Breakdown is brought to you exclusively by Grayscale. Grayscale is almost certainly a name, you know. They've been offering exposure to crypto for over a decade now and offer over 20 different crypto investment products ranging from single asset to diversify to thematic exposure to crypto and

the broader crypto industry. They have long been innovators at the intersection of Tradfai and crypto. And one of the benefits for a lot of us is that grayscale products are available right through your existing brokerage or IRA. Now, of course, investing involves risk, including possible loss of principle. For more information and important disclosures, visit grayscale.com. Go to gracecale.com to explore their full suite of crypto investment products and invest in your share of the future. Now, moving on, one factor that's fresh on the radar is Robin Hood and others big push into tokenization. Tuesday's announcement was a blockbuster and analysts are sitting up and paying attention. Following the event, Dan Dolev of Mizuho Securities wrote, Robin Hood's product

velocity is staggering. Now, Dolev is a respected equity analyst who largely deals with services in fintech. In other words, he doesn't typically give crypto bets much grace unless they really make sense. By way of example, he wrote off the Circle IPO last month stating that the, quote, business model is silly. While the crypto side of the bet was part of Dolew's analysis, he was far more interested in what it unlocked. Speaking to the opportunity to repackage U.S. markets for the world, he wrote, Robin Hood is tapping into a $600 billion tam with just a sliver of market share today. We believe that changes rapidly. Michelle O'Connor of Tax Bit commented on the European expansion, writing,

firms like Robin Hood are taking advantage of a gap in the market in Europe, with EU households saving around 15% of their income and most of that money sitting in low-yield accounts, there is a major opportunity to reimagine financial engagement and unlock smarter participation. Now, of course, there remains a question about whether any value accrues to the Ethereum ecosystem via their L2, but Robin Hood's big tokenization push is being treated as a new catalyst that needs to be taken seriously. Another big question mark for the second half of the year is the Bitcoin Treasury companies. At last count, we have over 120 publicly listed companies that have announced a Bitcoin strategy. But mostly these are just announcements rather than actual buys.

Time will tell how much buying pressure actually materializes in Q3, but for now, analysts are focused on Michael Saylor's original strategy. While Jim Chanos is very loudly betting against the company, T.D. Cowan believes this strategy is sustainable. Their second quarter saw around $7 billion in Bitcoin purchased, boosting the Treasury by 7.8%. This succeeded TD Cowan's estimate and brings the year-to-date Bitcoin yield to almost 20%. The stock is trading at around a 60% premium to Bitcoin holdings, so there's still a lot of room to use equity funding to fund more purchases. T.D. Cowan also believes that this premium is

reasonable, reiterating their buy rating on the stock in a research note on Wednesday. They suggested that the premium is justified by Bitcoin accumulation, outpacing share dilution. However, they noted the potential for a regulatory crackdown or Bitcoin volatility to throw the strategy into disarray. course, it is not just Sailor who's employing this strategy. We've got Metaplanet, the former Japanese hotel business, adding 7,800 Bitcoin in Q2, and taking their stock up 280% over the past three months. Benchmark has set a new price target for Metaplanet 46% higher. And so while there are plenty of people calling for this bubble to burst, Alex Kruger believes things are only accelerating. When it comes to analogies across cycles in Bitcoin Treasury companies, June 2025 is analogous

to December 2020 in the Bitcoin Greyscale trade. Hope you know what that means. Now, There is no sign currently of the market stopping them, so it looks like Michael Saylor and Dylan LeClair will keep buying Bitcoin at a rapid pace this quarter. In other interesting news heading into the second half of the year, the IPO window has very clearly opened back up. E. Toro and Circle have been successful. Corrieve has been successful. Crypto's been in the lead, but more generally, there is just a sense that this is now on the table, and one of the most recent companies to file announced that they had some Bitcoin

on their balance sheet. Specifically, Figma disclosed that they hold $70 million worth of Bitcoin, as well as 30 million in USDC held in anticipation of buying more. The purchases began in March of last year with Figma purchasing Bitcoin in the form of the Bitwise ETF. And realistically, when people were thinking of Bitcoin treasury strategies a few years ago, this is sort of what they envisioned, a profitable company investing their free cash flow into Bitcoin rather than holding it in treasuries. In other words, the Tesla strategy rather than the Michael Saylor strategy,

at least until Elon Musk pulled the plug. Will Reeves, the CEO of Fold tweeted, Welcome to the future of Bitcoin Treasury companies. No hype, no headlines, no gimmicks, just quietly preserving capital in the apex asset. One last thing to watch is the SEC in their treatment of ETFs. The first Solana ETF went live today with staking aloud, and that's only the start of the wave of products racing towards approval. Nate Garassi of the ETF store has been calling this crypto ETF summer and says it's about to be in full swing. The latest announcement is that the grayscale digital large cap fund has been approved to convert to an ETF on an accelerated basis.

The fund holds an assortment of top crypto tokens on a market cap-adjusted basis, so functions kind of like a crypto index fund. And while I think this is not the product for many of the listeners for this type of show, for many people out there who just want broad crypto exposure, this is exactly the type of thing they're going to look for. The implication also of approving the first crypto index fund is that the SEC is basically okay with a much wider range of crypto assets being offered. The Bitwise Index that goes a little farther in adding top 10 alts is expected to be approved

by the end of the month, and there is a whole host of single asset funds waiting in line. line. Nate Garassi believes it's logical that Spot XRP, Solana, and Cardano should be easy approval since they're already included in the index. The question will really be how far down the rankings the SEC is comfortable to go. Commissioner Hester Purse has made it clear that the SEC is not in the business of choosing which investments are suitable for people, but that also doesn't mean they're comfortable approving the long list of meme coin ETFs. To that end, the regulator is considering a simplified path to crypto-ethef approval with a set criteria. Eleanor Territ of Cryptoamerica tweeted, the thinking I'm told is that if a token meets the criteria,

issuers could skip the 19B4 process, file an S1, wait 75 days, and the exchange could list it. This approach could save both issuers and the SEC a lot of paperwork and back and forth on comments. What those listing standards would be is still unclear, but some are speculating market cap, trading volume, and liquidity are all under consideration. Through a spokesperson, the SEC declined to comment. So where we are left is that there are a bunch of interesting catalysts emerging on the horizon, but right now everyone is standing by for the big late cycle Bitcoin pump.

There are plenty of people ready to spend all summer fighting about paper Bitcoin and market manipulation, assuming that this is the only thing holding back a new all-time high. Others are just happy to see Bitcoin sitting above $100,000 week in and week out while they relax on the beach. OG Bitcoinermandrik tweeted, Bitcoin Price doing absolutely nothing all summer is the most bullish scenario. I don't know about you guys, friends, but I certainly know which of these camps I'm going to be in. For now, though, that is going to do it for the break to.

I appreciate you listening, as always. And until next time, which again is on Sunday, be safe and take care of each other. Peace.