The Breakdown - Bitcoin Vegas Goes Big as Politics Takes Center Stage

Starting point is 00:00:00 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 Thursday, May 29th. And today we are catching up on everything going on at the Bitcoin Conference in Vegas. And this is definitely more stacked than your average conference. 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.

Starting point is 00:00:40 You can find a link in the show notes or go to bit.ly slash breakdown pod. Well, friends, as I said, this year, the Bitcoin Conference returned to Las Vegas with a stacked lineup and packed out crowds. The event welcomed over 30,000 Bitcoiners, making it easily the largest conference of the year. We had a Guinness World Record set for the most Bitcoin transactions at an event with over 4,000. The skull of Satoshi has found its way home to the Bitcoin community thanks to a donation from Ripple. The art piece was originally commissioned by Greenpeace in 2023 to symbolize Bitcoin's

Starting point is 00:01:09 environmental harm, but with the campaign a failure, it will become a permanent exhibit at the Bitcoin Museum in Nashville. And there were all manner of the usual antics we've come to expect from the gigantic Bitcoin conference. In particular, following on from President Trump's appearance last year, the conference featured a heavy dose of political speakers. Many administration figures were present to check in on progress and chart a course for the rest of the Bitcoin agenda, so let's talk about what they had to say. Vice President J.D. Vance headlined the conference and opened his speech with optimism about Bitcoin's growing role in the world. He said, I think the last several years have

Starting point is 00:01:45 made it clear we're talking about genuine ground-up innovation that's already improving the well-being of tens of millions of our fellow citizens. 50 million Americans own Bitcoin, and I believe that's going to be 100 million before too long. Vance discussed the transformative effect of DeFi and expanding banking services, commenting, every single day I feel like I see some groundbreaking new use of blockchain tech. Shifting to his populist lens on the world, Vance highlighted the major use cases for crypto during this era of political upheaval. He said, Crypto is a hedge against bad policymaking from Washington no matter what party is in control. It's a hedge against skyrocketing inflation, which has eroded people's savings over the past

Starting point is 00:02:21 four years. And as you all well know, it's a hedge against a private sector that's increasingly willing to discriminate against consumers on the basis of their basic beliefs, including their politics. Vance referenced the numerous incidents of debanking over the past few years in the U.S. in Canada, and continued, maybe most importantly, I see crypto as a hedge against one of the most dangerous trends in the digital era in both the public and private sector. And that's of elites, who rather than innovate themselves, prefer to simply take over and co-opt cutting-edge technologies to assert their control over other people.

Starting point is 00:02:51 I know we believe this in this room. That's not Bitcoin, it'll never be Bitcoin, and you guys are going to make sure that happens. The speech then turned to the change in administration and the choice faced by Democrats to support the pro-crypto agenda or stand in its way. Vance said, Lawmakers in this country have a choice. Will we lead our nation into a future of financial sovereignty, innovation, and prosperity? Or will we let unelected bureaucrats and foreign competitors write the rules for us? And I'm here today to say, loud and clear. With President Trump, crypto finally has a champion and an ally in the White House. Vance commented that the

Starting point is 00:03:23 administration isn't just viewing crypto as another asset class, but rather as a, quote, simple driver of personal liberty for all our citizens. And we're dedicated to to seeing that promise fulfilled. He commented that the crypto community deserves, quote, transparency and clarity, and most of all you deserve respect and support from your government, not bureaucrats trying to tear you down. Vance then walked through the steps the administration is taking, delivering something of an early report card on the crypto agenda. Starting with debanking, he said, Operation chokepoint 2.0 is dead and it's not coming back under the Trump administration. And by the way, it's crazy that was ever controversial. The idea of using the regulatory

Starting point is 00:03:59 power of the government to crush an industry and to crush people who espouse a view you don't like. Moving on to the dismantling of the Biden crypto agenda, Vance declared, we fired Gary Gensler and we're going to fire everyone like him. He added that the game of using consumer protection to attack efforts to democratize the financial system is over. Vance then discussed the legislative efforts that are ongoing in Washington. He said that stablecoin legislation is moving as quickly as possible and made it clear that the administration views stablecoins as a, quote, force multiplier for our financial might. Market structure is the next priority after stable coins are passed, and Vance articulated that this limb of the agenda is purely about changing the perception that digital assets are not

Starting point is 00:04:36 welcome in the mainstream economy. Closing out the speech, Vance reflected on the political battles waged by the crypto community over the past few years. He said that the lesson is that, quote, unless you guys get involved in politics, politics is going to ignore this industry. But every victory that we win is only a provisional victory. Vance positioned the choice as being between exit and voice, continuing, a lot of people in 2024 in this community chose voice. You chose to speak up and get involved. I believe you changed the trajectory of our country because of it, but you've got to keep on choosing voice. What happens in the world of politics, what happens in the world of bureaucracy, it will affect even the most transformational and valuable technologies if we don't make the right

Starting point is 00:05:12 decisions. The first thing I would ask of you is to take that momentum of your political involvement in 2024 and carry it forward to 2026 and beyond. Don't ignore politics because I guarantee you politics is not going to ignore this community, not now and not in the future. A few big themes stood out from the speech, especially comparing it to President Trump's address at last year's conference. Vance wasn't talking about what the administration could do for Bitcoiners. Sure, he was presenting the report card from the first 100 days of the crypto agenda, but the main thrust was that this agenda needs to be a partnership between the Bitcoin community and the administration. He emphasized that there needs to be a two-way relationship with Bitcoiners on policy design and political pressure in order to make continued progress.

Starting point is 00:05:52 Largely, the speech was a call to remain engaged and not assume the political battles are over. Secondly, this was a far more populous speech than we got from Trump last time around. Vance continually positioned himself alongside the Bitcoin community and fighting the bureaucrats, lawmakers, and the elite. He discussed the need to keep the pressure up to achieve the full agenda. But fans also positioned Bitcoin as freedom technology to protect to everyday people against the tyranny of the state. In other words, the speech wasn't just about Bitcoin policy for Bitcoiners. it was about Bitcoin having a core role to play in Vance's particular populism. One of the critiques that people had, which wasn't particularly loud because, hey, when the

Starting point is 00:06:27 leading presidential candidate was on your team, you didn't ask too many questions. But still, for some, when it came to Trump, the Bitcoin Alliance seemed a bit like a marriage of convenience. Yes, there was some level of genuine interest, especially when you went beyond Trump himself, to his family and to his inner circle. But if anyone had a critique, it was that the arrangement could feel at times transactional. In contrast, Vance is definitely attempting to position himself as a leader among the Bitcoin community rather than an outsider representing its interests in Washington. He made sure to mention that he still owns a fair amount of Bitcoin, which created one of the big headlines circulating yesterday. He also argued that Bitcoin

Starting point is 00:07:02 will become a strategically important asset for the United States over the next decade. And as usual, I'm not here to talk about Vance's politics in general, but there is no doubt that he is trying to position himself with this community with an eye to future political campaigns. Another big event from the show was Cryptozar David Sacks sitting down for a fireside chat with Gemini co-founders the Winklevoss twins. Sacks said, blockchain Bitcoin crypto, this is the financial system of the future. We want this innovation happening in the United States. We don't want it driven offshore. Notably, there was a discussion of the Bitcoin Strategic Reserve and whether we'll actually see Bitcoin purchases anytime soon. Sacks said that there was a pathway to acquiring

Starting point is 00:07:40 more Bitcoin? Adding, the executive order establishing the Strategic Bitcoin Reserve does allow the government to purchase more if it can be done in a budget-neutral way. Specifically, if either the Commerce Department or the Treasury Department can figure out how to fund it without adding to the debt, then they are allowed to create these programs. Sacks commented that it's really down to the department heads Howard Lutnik and Scott Besson to figure it out. He added, I can't promise anything, but there is a pathway to doing that. The question is just, can we get either the Treasury Department or the Commerce Department to get excited about that. Because if they do and they can figure out how to fund it, they actually do have the presidential authorization ready. Some analysts had been hoping for a big BSR announcement

Starting point is 00:08:18 at the conference given that several deadlines from the executive order have expired already. Sacks didn't really add any new information, but his comments seemed to reinforce that the reserve is still on the agenda. Sacks also ticked off the administration's achievements and provided a roadmap for what to expect in the second half of the year. Over the first hundred days, he pointed out that the administration had pardoned Ross Ulbricht, banned Z. BDCs ended Choke Point 2.0 and rolled back regulatory restrictions and curb the DOJ's aggressive crypto prosecutions. Regarding Choke Point, the Winkle Boss twins disclosed how close they came to losing banking at Gemini. They said that during 2023, the exchange was losing a bank

Starting point is 00:08:52 account every other week and was down to their last one for both wires in ACH. Cameron said, If we had lost either one of those, it would have been game over. Looking ahead, Sacks said he expects the stable coin bill to pass and that we could see a market structure bill by August. He commented that the administration is aiming to lock in reforms to prevent a regulatory backflip in the future, adding, we've been moving so fast to correct all these things in terms of the legislation that's moving on Capitol Hill, the agencies and departments. I think by August we might have achieved the crypto agenda in Washington. Playing to the crowd, Sacks said, we're basically four months in, so we still have over three and a half years and what we can accomplish over the next few years

Starting point is 00:09:28 is going to be really incredible. What all of you guys are going to accomplish with Bitcoin is going to be incredible, and to the moon, right? Moving down the agenda, Eric Trump and Don Jr. talked Bitcoin price action, adoption, and the family's crypto activities. Eric said, everybody in the world wants Bitcoin. I don't care if you're a royal family or the biggest financial institution. Everybody is buying Bitcoin. Every single day, people are allocating billions and billions of dollars to it. You know, zero point one Bitcoin is going to be worth an absolute fortune. Discussing institutional adoption, Don Jr. commented, I think we're at the point where those floodgates are going to open if they haven't already. The pair discussed

Starting point is 00:10:02 their pathway to shifting the family's business from real estate to Bitcoin, with Don Jr. saying, We're true believers. We're guys that came from a different world. We saw what was missing. We saw how fragile and manipulated those ecosystems were. I think we want to help him be a big part of the leading edge of changing the future with that democratized finance. Now, earlier this week, we got news that Trump Media Group, the parent company for Truth Social, is raising $2.5 billion to buy Bitcoin. Eric noted their mining venture, American Bitcoin is also aiming to increase Bitcoin per share as a key metric of success. He discussed how Michael Saylor had orange-pilled the Trump family, even recommending they mortgage Mara Lago to buy Bitcoin.

Starting point is 00:10:37 Quoting Sailor, Eric said, Do what I'm doing. There's such an incredible opportunity. He remarked that, I've never seen that in any other industry, where you have the titan of the industry that's literally advocating for smart people to compete against them. Eric also discussed his run-in with debanking, stating, my accounts just stopped working. You realize how corrupt the system is. The system was weaponized.

Starting point is 00:10:55 I hate using the word hate, but honestly, I would love to see some of the big banks go extinct because they honestly deserve it. He positioned crypto as an antidote to corruption adding. It makes everything cheaper. It makes it faster. It makes it safer. It makes it more transparent. It makes the whole system more functional. While some of the talk was relatively philosophical, there was also a big focus on price. When asked where he sees Bitcoin in a few years time, Don Jr. responded, I think we're going to the moon, guys. It's going to be awesome. Stay in, stay strong. We're very long crypto.

Starting point is 00:11:22 It's a huge part of everything we do now. Eric said, everyone wants it. No one wants to get rid of it. This isn't just America. This is the entire Middle East, all of Asia, the Fortune 500. I think you're going to see the value skyrocket. When pressed for a number, both brothers agreed we'd see Bitcoin above $170,000 within a year's time. Lastly, one late addition to the lineup was New York City Mayor Eric Adams. He joined to discuss a plan for Bitcoin financing for the city. He said, it's time for the first time in the history of the city to have a financial instrument that is made for those who are holders of Bitcoin. We need to have a bit bond, and I'm going to push and fight to get a bit bond in New York so you can do those same bond investments in New York City. Now, bit bonds are an idea

Starting point is 00:12:00 put forward by the Bitcoin Policy Institute earlier this year. They proposed a bond instrument with a small portion of Bitcoin attached, providing investors with a guaranteed interest payment alongside exposure to Bitcoin upside. For cities and governments issuing the bonds, the ideas that interest rates would be slightly lower than conventional debt instruments. Adams has been a Bitcoin advocate for several years, electing to take part of his salary in 2022 in Bitcoin. His political fortunes have turned sour recently, with Adams dropped from the Democratic ticket and running as an independent in the November election. so he may not be long for the office. Still, he's making some big promises to the crypto industry. He said, let's get rid of the Bitcoin license and allow us to have the free flow of Bitcoin

Starting point is 00:12:37 to the city. Presumably that refers to the Bit License, which is the first regulatory system set up for crypto exchanges by New York in 2014. At this stage, even a decade on, only a few dozen firms have managed to obtain a license, making the New York market close to many crypto companies. Should be noted that the Bit License is operated by the state rather than the city, so it's not clear what influence Adams or any mayor would have over the policy. And so while these are just likely some empty words from the embattled mayor, he was still talking sense for the numerous crypto companies that call New York home. Adams sold the crowd, come out of the shadows, come back to the city.

Starting point is 00:13:09 You no longer have to be afraid to be part of this major industry that has been attacked, criticized, and denied the opportunity to move forward and grow. And who knows? Maybe Adams will use his last ounces of political capital to issue New York City bit bonds. There are certainly worse ways to go out. Uncle Rockstar developer kind of summed it up when he wrote, I love when politicians simp for Bitcoin. And honestly, if you have one takeaway from the whole event, that's the story, man.

Starting point is 00:13:34 Not a bad turn of fortunes. Interesting to see how the politicians are positioning themselves vis-a-vis Bitcoin. For now that that is going to do it for today's breakdown. Appreciate you listening, as always. And until next time, be safe and take care of each other. Peace.

The Breakdown - Bitcoin Vegas Goes Big as Politics Takes Center Stage

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