The Breakdown - Bitcoin, Politics, and Privacy

Episode Date: August 17, 2025

On this week’s Long Read Sunday, NLW reads two essays exploring the intersection of Bitcoin, crypto, and politics. The first, Red Coin Blue Coin: The New Politics of Exposure, looks at the rise of politically branded Bitcoin treasuries—from Michael Saylor’s Strategy to Trump Media’s $2 billion BTC bet—and asks whether investors are buying the coin or the campaign. The second, A Regulator’s Radical Defense of Privacy by Byron Gilliam, covers SEC Commissioner Hester Peirce’s surprising embrace of cypherpunk ideals and her challenge to the financial surveillance status quo. Sources: https://www.coindesk.com/opinion/2025/08/01/red-coin-blue-coin-the-new-politics-of-exposure https://blockworks.co/news/hester-peirce-defense-of-privacy Brought to you by: Grayscale offers more than 20 different crypto investment products. Explore the full suite at grayscale.com. Invest in your share of the future. Investing involves risk and possible loss of principal. To learn more, visit ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Grayscale.com⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ -- ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://www.grayscale.com//?utm_source=blockworks&utm_medium=paid-other&utm_campaign=brand&utm_id=&utm_term=&utm_content=audio-thebreakdown)⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ 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 Sunday, August 17th, and that means it's time for Longreed Sunday. 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.0.0.0.0.0.org.org. All right, friends, back with another, Long Read Sunday, and we have two different essays, both sort of about Bitcoin and crypto and politics, but from very different angles. The first one is by David Hoppin is called Red Coin, Blue Coin, the New Politics of Exposure. Bitcoin is politically neutral, but Bitcoin Treasury vehicles aren't.

Are we buying the coin or the campaign? I'm going to turn it over to AI and LW to read this, and then we will be back. It was only a matter of time, with strategy long reigning as the go-to corporate proxy for Bitcoin exposure, it was inevitable that a challenger would emerge, though few expected it to wear a red hat and run a social media company. Trump Media and Technology Group's recent announcement that it holds roughly $2 billion in Bitcoin has transformed it overnight into a serious, if unconventional, Bitcoin Treasury company. But for investors seeking crypto exposure, the question isn't just about how much Bitcoin a company holds. It's about what else comes with the package. In one corner, we have strategy, formerly micro-strategy. The Bitcoin standard

bearer helmed by Michael Saylor, who has spent the past four years turning a sleepy enterprise software company into a de facto digital gold vault. Sailor has become Bitcoin's most prominent corporate evangelist, turning strategy into a digital gold vault with quarterly earnings calls that double as Bitcoin sermons. In the other corner, enter Trump Media DJT, which operates the truth social platform and has a revenue stream you could mistake for a Rounding error, $4.1 million in 2023 compared to strategies $498 million. Yet its market cap has floated above $6 billion, a valuation propped up almost entirely by brand loyalty, media spectacle, and now Bitcoin. Let's be clear, DJT didn't just buy some Bitcoin, it bought a lot

of it, enough to vault it into the upper echelon of corporate BTC holders. On paper, that makes it interesting, but this isn't your typical balance sheet play. This is Bitcoin by way of meme stock, populist vehicle, and culture war capital. And for investors looking for crypto exposure, it raises an uncomfortable and increasingly unavoidable question. What happens when your Bitcoin proxy stock comes with a political identity? Strategies Bitcoin play, while Bold has always been pitched as a rational, some might say religious, hedge against inflation and fiat debasement. It's founder doesn't dabble in politics outside of poking fun at Altcoins, and the company isn't staging rallies or trending on truth social. It's all in on Bitcoin, not ideology. Trump media,

by contrast, is ideology first. Its brand, valuation, and customer base are inseparable from Donald Trump's political identity. With Bitcoin now making up the overwhelming majority of the company's assets, this is less a treasury decision than a wholesale pivot. But in practice, it functions more like a cultural signal, a declaration of alignment with the anti-establishment pro-sovereignty values that animate its most loyal followers. That's not a bad strategy, necessarily. It might even be a brilliant one. The marriage of Trumpism and Bitcoin isn't as odd as it sounds. Both reject centralized authority. Both thrive on defiance. Both are, depending on your viewpoint, revolutionary or rebellious, and always controversial. But for investors who simply want crypto exposure in their portfolio,

the emergence of politically branded Bitcoin stocks presents a new kind of risk. What happens when Bitcoin becomes tribal? What happens when each side of the political aisle has its own Bitcoin company, its own Bitcoin ETF, its own financial media ecosystem? In this new paradigm, Bitcoin exposure could become not just a financial choice, but a cultural affiliation. Imagine a left-leaning climate tech firm launching Green Bitcoin Holdings, Inc. to push eco-friendly mining, or a libertarian group creating Freedom Ledger Corporation to promote Bitcoin

as a tool for tax resistance and personal sovereignty, Bitcoin could become the financial equivalent of cable news, red coins, blue coins, and perpetual outrage. That's a far cry from Bitcoin's original promise as a neutral, decentralized alternative to fiat. It was supposed to be trustless, borderless, immune to capture. But when its biggest corporate champions start behaving like political action committees, it threatens to drag Bitcoin into the very systems it was designed to transcend. So where does that leave investors? If you're looking for a relatively clean Bitcoin proxy, strategy still offers the clearest path. Its volatility is real, but it's the volatility of conviction. Trump media, on the other hand, is a bet on narrative, loyalty, and virality.

It might outperform in the short term. It might even spark a whole new class of politically infused crypto equities, but it's no longer just about Bitcoin. It's about who owns the story around Bitcoin. The final irony, Bitcoin itself doesn't care. It doesn't care who your CEO is. It doesn't care who your president is. It just keeps producing blocks, one every 10 minutes, indifferent to spin, slogans, or Senate hearings, until 21 million is reached, at which point the political tribe with the biggest BTC Treasury wins. But investors do care. And as Bitcoin enters this new phase of cultural colonization, we'd all be wise to ask, are we buying the coin or the campaign? All right, back to Real NLW here. I think if there's one takeaway from this piece, which is sort of a

truism, is that it gets harder and harder to hide behind the idea that Bitcoin and Crypto as assets aren't political, when so much around it is political. At the same time, though, I kind of think that that makes it even more important to remind people that the underlying assets, by their very definition, are not only not political. They are, for political enemies, opponents, people who are on totally different sides of the aisle. The reason that I think it's so important to insist that is that it is in the incentive of the groups that are political surrounding it to associate it with their politics. If we don't want that to happen, we've got to fight it.

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 tradfi 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 grayscale.com to explore their full suite of

crypto investment products and invest in your share of the future. Next up, we turn to constant source of bullishness, SEC Commissioner Hester Perce. This one comes from Byron Gilliam in the breakdown newsletter on Blockworks and is called a regulator's radical defensive privacy. An SEC commissioner walks into a cypherpunk meetup. Once again, I turn it over to AINLW and I will be back. Centralized stable coins, permission blockchains, corporate treasury companies, the hottest topics in crypto are not very cypherpunk these days. Weirdly, though, the SEC is... In a speech last week, SEC Commissioner Hester Pierce, delivered a defense of privacy that wouldn't be out of place on the

original cypherpunk mailing list. She even cited Eric Hughes, founder of the mailing list, and author of a cypherpunk manifesto, as an inspiration for her surprisingly radical line of thinking. Hughes probably never imagined he'd be approvingly quoted by a government official. As you can tell from the line, Pierce chose to quote, we cannot expect governments, corporations, or other large, faceless organizations to grant us privacy out of their beneficence. And yet here is one of the U.S.'s's most influential regulators, not just name-dropping Hughes,

but amplifying his radical views on privacy-preserving technology. She hardly sounds like someone who works for the government, though, where, by design or deficiency, the law will not pretend. us, technology might. That's a pretty good summation of Hughes's core message that, because we trust governments to grant it, privacy in an open society requires cryptography. Writing in 1993, Hughes spoke aspirationally about the need for systems which allow anonymous transactions to take place. Writing in 2025, Pierce cites cryptomixers, privacy preserving blockchains, and even decentralized physical networks, deep in as systems that can provide such anonymity.

She makes the case for these technologies succinctly. New and improved technology can diminish the need for us to rely on third parties and thus to hand our information over to them. Pierce even makes explicit what Hughes diplomatically left unsaid in the manifesto. Privacy preserving technology must be allowed, even though doing so enables people to use them for bad purposes. What could be more cypherpunk than that? It's an extraordinary turn of events to see an SEC commissioner

being so closely aligned with the author of the original cypherpunk's call to arms on privacy. Their views are not entirely aligned, however, but in the opposite way you might expect. Much of Pierce's speech targets the third-party doctrine, the legal theory that lets law enforcement access your banking data without a warrant, which she accuses the U.S. government, her employer, of wielding like a sledgehammer. The third-party doctrine is a key pillar of financial surveillance in this country, she writes, before making clear that she'd like to knock it down. In short, she argues that your banking records deserve the same Fourth Amendment protection as whatever goes on in your home behind closed doors.

Weirdly, I think Hughes might disagree. If two parties have some sort of dealings, he wrote in the manifesto, then each has a memory of their interaction. Each party can speak about their own memory of this. How could anyone prevent it? That is a tidy restatement of the government's insistence that once you give your information to a third party, such as a bank, it's no longer your private information. Hughes even adds that, we seek not to restrict any speech at all, which must therefore include banks speaking about their customers. Wouldn't it be funny if the prosecution cited Hughes in the next Roman storm trial? But this is why both Pierce and Hughes put their faith in technology. Even if the current government chooses to respect your privacy, the next one

probably won't. We must come together and create systems which allow anonymous transactions to take place, Hughes wrote. But not just that. For privacy to be widespread, it must be part of a social contract, he added. Privacy only extends so far as the cooperation of one's fellows in society. This will be a hard sell, I think. Most people say they are in favor of privacy, but most people also say they're against money laundering and terrorist financing. Few are as radical as Pierce and Hughes in believing that privacy is so fundamental that its benefits outweigh any harm it might enable or fail to prevent.

If Pierce's speech finds its way to Hughes, wherever he is, I'm sure he'd recognize and appreciated it as an effort to win the not yet radicalized over to the cause. We the cypherpunks seek your questions and your concerns, and hope we may engage you, he wrote in 1993. Hester Pierce can count herself among the we. All right, back to Real NLW here.

What I love about this discussion from Perce is that it's using the space opened up by no longer having to fight for the existential right to exist of Bitcoin and Crypto, to use these technologies as openings to ask more fundamental questions, more first principles questions, about the society we want to live in. One need look no further than the Roman Storm case to understand that privacy, despite the theoretical change in regulatory wins for crypto, remains a major battle. It's going to get nothing but more important, the more ubiquitous new technologies become. I'm glad we have an ally in this fight in Commissioner Purse. For now though, that's going to do it for this week's Long Read Sunday.

Appreciate you listening, as always, and until next time, be safe and take care of each other. Peace.