The Breakdown - Bitcoin Inches Toward History as Politics, Policy, and Memecoins Collide

Episode Date: May 22, 2025

Bitcoin hovers just below a new all-time high, with traders bracing for a potential liquidation cascade and analysts divided on what comes next. NLW explores whether upcoming catalysts—ranging from a Trump meme coin gala to SEC regulatory shifts—could break the stalemate. Plus: Robinhood’s big tokenization push, Kraken’s global derivatives expansion, and political fallout from meme coins in Washington and Buenos Aires. 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, May 21st, and today we are waiting for a new Bitcoin all-time high. 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 in the show notes or go to bit.ly slash breakdown pod. Well, friends, we are teetering on the precipice of a new all-time high, although good Lord, it's always scary to say that one. I know that there's some amount of time between when I record this

and when you hear it. But regardless of all that, the question is, is there a catalyst to push Bitcoin to the next level? Bitcoin saw its highest ever closed yesterday at 106,800. Overnight price action reached 108,000. We're within inches of a new all-time high, but momentum appears to be stalling out, and sentiment is completely divided in two directions. Future's open interest has surge to record highs as traders lever up. Currently, there's extreme positioning to both the upside and the downside, almost guaranteeing a liquidation cascade on any price move. Barish shorts will be forced out if Bitcoin crosses 108,000, while the longs will be liquidated below 106,000. And yet we wait, with Bitcoin stuck between those two marks to begin the day.

Looking beyond the one-minute chart, investment firm Swiss block believes a new all-time high is all but guaranteed, tweeting, a lot of noise about a potential double-top as Bitcoin struggles to break all-time highs. They see no sign. of bearish divergence and claim that on-chain strength is still intact, adding, Bears, not this time, got to wait. Network economist Timothy Peterson tweeted, Bitcoin has pulled to within 10% of its all-time high. This has happened nearly 300 times since 2015.

Within 50 days, Bitcoin made a new all-time high 98% of the time. Which honestly kind of seems like saying, 98% of the time it works every time, ignoring the 2% of the times we see a major correction. Still, sub-allowed themselves to wonder what the next leg up could mean. Intuition wrote, the 100K level is the ultimate level, a highly emotional level, very high tension, very high expectations. Rejection led to max fear. Approval will lead to max greed. Bitcoin hasn't broken the 100K psychological level yet, and I think most people have no idea what 150K Bitcoin will do. What you have to understand is that a 150K Bitcoin is safe.

It's a license to take risks. Hard to imagine right now, but the absolute level of we're so back in FOMO we're going to experience will be unprecedented in crypto history. Alas, that is not happening today. Instead, what's happening today is the timeline is simply staring at the Bitcoin chart and waiting for the all-time high to load. Now, if we are looking for the next major catalyst, there's a few events coming up over the next week. On Thursday, we have President Trump's gala dinner for top meme coin holders. And just last year, that sentence wouldn't have made any sense, but here we are.

On Thursday night, the top 220 holders of Trump's meme coin will congregate at his Washington golf course. Serial crypto main character Justin's son appears to be attending. Yesterday, he posted, honor to support POTUS and grateful for the invitation to attend President Trump's gala dinner as his top fan. As the top holder of Trump, I'm excited to connect with everyone, talk crypto, and discuss the future of our industry. Tron Founder's son has an SEC lawsuit currently on hold, and in another timeline with another type of administration in the office, you can imagine his travel plans in the U.S. might be severely crimped. Now, on the polar opposite end of the

spectrum, the Bitcoin conference is set to begin in Las Vegas Tuesday. Vice President J.D. Vance is appearing as the headline keynote speaker. The reason both of these events matter is that we have two Bitcoin-related executive orders with deadlines for governmental reports. Most notably, the Treasury was tasked with devising budget-neutral strategies for acquiring Bitcoin by the 5th of May, which is already in the rearview. This administration does have a sense for occasion, and either event seems live for a big announcement. Noting these opportunities to make a headline, K-33 research wrote, policy developments remain a key underappreciated catalysts in the crypto market. Don't sleep on the executive orders. We believe

the Strategic Bitcoin Reserve remains unappreciated by the market and expect information on this front to enforce robust Bitcoin performance ahead. At the same time, the Justin Sun connection is making life harder for crypto policymakers in D.C. Commissioner Paul Atkins attended his first SEC budget hearing yesterday in the House and was absolutely grilled about Trump's crypto connections, or as many in the House clearly feel Trump's crypto corruption. Democrat Glenn Ivy noted that the SEC had stayed their lawsuit against Justin Sun after the crypto mogul invested 30 million. million in World Liberty Financial. Atkins said the case was still active even though it had been put on hold, further noting the SEC it provided guidance that meme coins are not securities placing Trump coin

outside of their jurisdiction. Beyond that, the core substance of the hearing was Atkins setting a new course for the SEC. He said, a key priority of my chairmanship will be to develop a rational regulatory framework for crypto asset markets that establishes clear rules of the road for the issuance, custody, and trading of crypto assets while continuing to discourage bad actors from violating the law. Some representatives push for a timeline with Atkins responding that the results of the Crypto Task Force roundtable should be available soon, commenting, we should be having something here in the next few months with proposed steps forward. One thing to keep an eye on will be whether Congress manages to pass laws or allow crypto policy to default to SEC rulemaking. Atkins has already

said that rulemaking efforts are underway at the staff level, so they will serve as a stopgap solution, if not more. Atkins didn't push for legislation, but commented, whatever happens in Congress will help undergird what we do. Now, one of the big priorities for the Atkins SEC is figuring out how to allow tokenized securities in the U.S. Earlier this week, the chairman gave a speech laying out his roadmap for the agency with the central theme being that the SEC has a history of standing in the way of innovation until it's forced to adapt. He believes that this is one of those moments, stating, The markets innovate and the SEC should not be in the business of telling them to stand still. To that end, the agency is canvassing ideas of what a tokenization framework should look like. This

week, Robin Hood submitted a comprehensive 42-page proposal, the exchange disclosed plans to launch a platform for tokenized assets that will combine off-chain trade matching with on-chain settlement to increase efficiency and transparency. Their big ask from the SEC was token asset equivalence, which would recognize tokenized securities as the asset itself rather than as a derivative or synthetic product. The change would be largely about streamlining regulation, allowing tokenized assets to simply fit within existing rules. It would also represent some big changes for how asset ownership works and opens a can of worms around safe custody. But this is the big and necessary change to truly unlock tokenization. Up to now, tokenized assets are just an IOU

from whatever Cayman Islands entity is holding the real world assets. This change would make tokens indistinguishable from assets held in an investor's brokerage account. Robin Hood seems extremely keen to get this new type of market off the ground. They provided a lengthy technical explanation to the SEC, disclosing that their design will utilize both Solana and Base in a dual-chain architecture. The company estimated they could achieve 10 microsecond latency for off-chain trade matching and a throughput of 30,000 transactions per second. They argued this design could allow settlement times to be cut from two days to zero days, saving 30% in trading costs annually. CEO Vlad 10 have commented, RWA tokenization represents a new paradigm for institutional asset

allocation. Robin Hood is committed to leading this trend under a compliant framework. Now, there is a rough history of crypto CEOs going to Washington to ask regulators to approve their bespoke crypto system. And yet, even with that in mind, this feels like another big signal that Robin Hood is looking to get tokenization launched as soon as possible. There's plenty of Tradfi firms looking to adopt tokenization as the next evolution in financial markets, but this is the first time we've seen a concrete regulatory proposal with a model platform presented for scrutiny. Until now, the concept was very theoretical. A bunch of tokenized assets have sprung up, but they're all focused on crypto-natives and don't cross over into the Tradfi

ecosystem. What Robin Hood is proposing is a generalized upgrade to regulations and infrastructure. It would be the difference between allowing tokenized stocks to trade on-chain and ensuring that on-chain infrastructure is the future of stock trading. Meanwhile, Cracken continues to accumulate derivatives companies with another acquisition. The exchange announced a prior acquisition of an investment firm called Greenfield Wealth based in Cyprus. The only purpose being to acquire a derivatives license that's valid in the EU. Earlier this year, Cracken acquired Ninja Trader for $1.5 billion, which was at the time the richest crypto acquisition ever. That gave them a license to offer derivatives in the U.S. At the end of last month, the exchange launched derivatives trading in the UK under a license

held by a subsidiary acquired in 2019. This move adds the EU with derivatives markets going live yesterday. Exchange head Shannon Kirtas said, Europe is one of the fastest growing regions for digital asset trading and investment, with some of the most sophisticated and demanding clients and institutions. The launch of Krakins regulated derivatives in Europe, the largest offering of its kind is well-timed to meet this growing demand. Interestingly, Cracken has managed to get licensing to offer a unified market across all three regions. This means European traders will join existing markets and have access to already liquid contracts trading over a billion dollars per day. That volume already puts Cracken on par with the volumes on Deribit, although still a far cry

from catching up to larger exchanges like Bybit, OKX, finance, and the Coinbase International Exchange. In institutional adoption news, alternative asset manager Blackstone is finally getting into Bitcoin, with a puzzlingly small position, the world's largest alternatives firm bought $1 million worth of Bitcoin ETF's last quarter. You can almost see Dr. Evil's little pinky finger as the world's leaders laugh at him. Of course, this is miniscule among the firm's trillion dollars in assets. To the point it's not exactly clear what their strategy is, of course, we always love seeing firms get off zero. And you'll remember that CEO Stephen Schwartzman back in 2019 said of Bitcoin, I don't have much interest in that because it's hard for me to understand. He also parroted at the point

that Bitcoin is for criminals. So hey, who am I to complain? Turning back to crypto-political scandals, Argentine president Javier Miele has shut down the investigative task force looking into his meme coin. You'll recall that back in February, Miele endorsed a meme coin called Libro, which performed one of the most high-profile pump and dumps of the cycle. Milay claimed he was at arm's length to the token and didn't profit, and in the crypto part of the news cycle, we got insight into a sketchy meme-coin launching investment firm called Kelsier Ventures. In the U.S., the news slid off the front page, but it's been an ongoing scandal for Miele in Argentina. He initially approved a task force to look into the meme coin and investigate himself and his sister who serves as chief of staff.

Late last week, the judge leading the investigation ordered Argentina's central bank to unseal the bank records of the Miele siblings. Now Miele has announced the end of the investigative task force with a governmental decree stating the unit has, quote, fulfilled the functions assigned to it. As for his political fortunes, the scandal seems to be blowing over. inflation, which is the far more important issue for the Argentine people, is now down to 47% compared to the eye-watering 280% it hit as Miele came to power at the beginning of last year. His party won an upset victory in local Buenos Aires elections last week ahead of midterms in October, so as for right now, it seems like the meme coin is kind of a low priority.

So that's the story, kind of a slow newsday as we all wait for the next move in Bitcoin. But boy, having had some slow news days before, and a lot of days where we were waiting on Bitcoin, This slate of news at 108,000 is a lot better than it's been before. Appreciate you listening, as always, and until next time, be safe and take care of each other. Peace.