The Breakdown - Bitcoin Surges on Hopes of a China Deal

Episode Date: October 28, 2025

Bitcoin and risk assets jumped as the U.S. and China appeared to reach a framework agreement that takes 100% tariffs and rare earth restrictions off the table. NLW breaks down what the potential trade deal means for markets, why optimism is back, and how JPMorgan’s move to accept Bitcoin and Ethereum as loan collateral signals a major shift in traditional finance’s relationship with crypto. Plus, new controversy over Binance’s lobbying spend and Trump’s CFTC pick. 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 Monday, October 27th, and today we're talking about Bitcoin spiking on news of a potential China deal. Before we get into that, however, if you're 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, crypto markets came alive on Sunday as China risk was seemingly taken off the table. Throughout the month, a series of headline bombs have disrupted the bull run in Bitcoin.

First, Beijing announced new global export controls on rare earth metals which posed a threat to supply chains for electric motors and defense tech. President Trump fired back with threats of 100% tariffs that coincided with the crypto flash crash that sent several all coins to actual zero. After a weekend of negotiations in Malaysia, it seems that cooler heads are beginning to prevail, and the largest threats have been withdrawn. Treasury Secretary Scott Besson told CNBC that the two sides had reached a, quote, very substantial framework on major topics, including export controls, fentanyl, and shipping levies.

He said that the 100% tariffs are, quote, effectively off the table, and China has agreed to substantial soybean purchases, as well as deferring export controls on rare earths. Besson commented, so I would expect the threat of the 100% has gone away, as has the threat of the immediate imposition of the Chinese initiating a worldwide export control regime. He said that Beijing would delay their rare earth restrictions for a year while they re-examine it. Chinese trade envoy Li Chengeng, who Besson had called unhinged earlier in the month, also came away from the meeting with a positive message. He called the talks frank and constructive, adding, The current turbulences and twists and turns are ones that we do not wish to see.

Trump seemed in good spirits as he spoke to reporters on the ground in Malaysia, predicting a good deal with China. He added, they want to make a deal and we want to make a deal. A meeting between Trump and President Xi is expected to take place on Thursday to finalize the deal. Those betting that nothing ever happens were vindicated as the market took off on Sunday. Bitcoin was up 3.3% and Alt staged a huge risk on rally. S&P futures gaped higher when markets opened on Sunday night to reach a new all-time high. Hedgeye noted we have a big week ahead writing, risk on Monday, fresh all-time highs, FOMC cut likely, biggest earnings week of the season, Trump and she trade deal meeting on deck. Analyst Will Clemente suggested a late stage

October could still be in play, tweeting, the monthly is now green. The price action was enough to turn around sentiment for many. Michael Vandipope wrote, This was the crucial resistance zone to break through for Bitcoin. 112K marked the tipping point for me. Once that broke, it's clear that this bull market is far from over and that we're about to have way more upside to come in here. What's next?

Probably just before FOMC, a regular pullback, after which we're going to test some levels for support on the lower timeframes. Those levels should hold and then we're going to be running towards a new all-time high in November. By the dip season, it is. Now, I would say that it seems a little too early to me to call a return of the bull market, especially given how volatile the trade war negotiations have been, but it certainly feels a whole lot better heading into the week with strong tailwinds and positive sentiment. Legacy internet and infrastructure are brittle, plagued by downtime, coverage gaps,

and outdated financing models. Communities and builders are left behind while capital sits locked out. Althea is changing that. Since 2018, their technology has powered resilient, sustainable networks across the U.S. and abroad. With Althea L1, they built the world's first blockchain purpose-built for utilities and telecom, turning infrastructure into a transparent, investable asset class. Through liquid infrastructure, networks can now be financed in real time, operated more efficiently and scaled to meet the $3 trillion telecom and utilities market.

This is fintech for infrastructure, connecting capital directly to builders and returning revenue seamlessly to funders. No middlemen, no bottlenecks, just sovereign, resilient infrastructure that works for people, communities, and investors alike. Learn more at Althea.net and find them on Crackin to join the future of infrastructure finance. Next up, a follow-up from a show last week, Politico is reporting on just how much Zizi's pardon cost in lobbying fees. As you heard on the Friday show, my take on CZ's pardon is that it is not good for crypto. We've seen many events of the past year that wreaked

of impropriety, and so perhaps unsurprisingly, pretty much everyone that wasn't in crypto assumed that CZ's pardon was a pay-to-play deal. On Sunday, we got reporting that Binance had paid $450,000, to a Washington lobbying firm called Checkmate, the payment covered lobbying on multiple regulatory issues to both the Treasury and the White House, which included, quote, executive relief, according to a publicly filed disclosure report. Checkmate has no direct relationship to the Trump family,

but Politico reports that its principal, Chess McDowell, is a close associate of Donald Trump Jr. Checkmate is among the fastest growing lobbying firms in Washington, having booked $7.1 million in revenue over the past three months alone. In addition to Checkmate, Politico reports that Binance and CZ and his personal capacity paid $290,000 to high, higher securities lawyer, Teresa Goody Gehan. Their engagement began three weeks after inauguration day, and this is a lawyer who is publicly known to be on the shortlist to lead the

Trump SEC. Now, if you're sitting here thinking to yourself, well, none of this is illegal or particularly even high value for Binance, given that they've spent less money on lobbying this year than they did in 2022, the issue is about the appearance of impropriety. And more than that, the fodder that it gives anti-crypto folks in D.C., heading into the market structure debate. House Democrat Maxine Waters was already decrying the pardon last Friday, even before the Politico reporting. She said that Trump's granting of the pardon was a, quote, appalling but unsurprising reflection of his presidency, one defined by corruption, self-interest, and loyalty to criminals over working-class American families. Waters alleged, the pardon was the payoff in a blatant

example of the kind of pay-to-play corruption that Trump and his administration continued to engage in. And so to reiterate, my point is not that A, it's clear that CZ or Binance did anything wrong, nor B, that I begrudge CZ using any tool in his toolkit to create the best situation for himself. My point is strictly that it just creates an absolute boatload of firepower for the crypto critics and makes it much more difficult for the pro-crypto Dems to try to get some really important rules done before we all head off for election season next year. Staying in Washington, the administration has tapped crypto lawyer Mike Selig to be the next chair of the CFTC. Selig was a partner focusing on crypto at law firm Wilkie Far and Gallagher

during the last cycle. Earlier this year, he left his work in private practice to join the SEC as chief counsel of the Crypto Task Force. His potential appointment the head of the CFTC enjoys widespread support from the crypto community. Amanda Tuminelli, the executive director of the Defi Education Fund, said, Mike Selig is a well-respected lawyer and industry expert. He understands the tech and the need to allow room for innovation, but also cares about getting to the right legal answer. Former CFTC Chairman Christian Carlo tweeted, Personnel is policy and Trump has made excellent policy and personnel choice in nominating Mike Selig as a CFTC chair. Selig is smart, sensible, steeped in CFTC rules and

and procedures and widely respected for his deep understanding of digital finance. He's open-minded and will approach contentious issues with fairness and balance. Selig's recent work with the SEC Crypto Task Force would also suggest a clear opportunity to work across agencies on harmonization of rules and enforcement. A confirmation hearing hasn't been scheduled at this stage and might not rank as important enough to deal with until the government shutdown has ended. Selig's appointments should be relatively uncontroversial, especially given the urgency of getting commissioners installed. Prior to Selig, the administration nominated A16Z head of policy, Brian Quintenz. Quintenz was criticized by Democrat lawmakers for his conflict of interest as an investor in

Kalshi, who would fall under his jurisdiction at the CFTC. However, his nomination was also eventually torpedoed by the Winklevoss Twins. Aside from appointing a chair, the administration needs to get moving on the rest of the commission as well. Each member of the CFTC resigned after the new administration was sworn in, so there are currently zero commissioners set to serve alongside Selig. That means no rulemaking can be passed, and nothing that requires a commission vote can be done until further appointments are made. Some optimistic news in the financial system,

J.P. Morgan is set to allow Bitcoin in Ethereum to serve as collateral for loans. Bloomberg reports this policy change will be implemented by the end of the year. J.P. Morgan already loosened their policy to allow crypto-etiffs to serve as collateral, but customers will now be able to keep their crypto in its native form while using it in the traditional financial system. The reporting stated that custody will be provided by a third party, which is presumably Coinbase. This is obviously a big deal for both practical and symbolic reasons. practically, we've seen a ton of Bitcoin OGs convert their Bitcoin into ETFs throughout the past year in order to get access to these kinds of financial services. Now they'll be able to do this

without sending their Bitcoin to BlackRock and helping to create a huge centralized Bitcoin vehicle. Symbolically, this is Tradfai recognizing crypto in its native form as a perfectly valid asset. We probably don't need to recap Jamie Diamond's views on Bitcoin over the years. However, his publicly stated opinion has softened significantly in recent months. For example, in May, he said, I don't think you should smoke, but I defend your right to smoke. I defend your right to buy Bitcoin. Go at it. Remarking on the moment, VJ. Boyapati tweeted, Bitcoin is pristine collateral. Even the skeptics are beginning to accept that fact. This has all the hallmarks of what could be a wild and volatile week. It could be an extremely powerful surge up. But there's also a bunch of ways

in which things could go the other direction. Whatever case it is, I will be here covering all of it for you. So until next time, be safe and take care of each other. Peace.