The Breakdown - BTC at $100,000: The Bitcoin Era Begins

Episode Date: December 5, 2024

NLW recaps the momentous occasion. Enjoying this content? SUBSCRIBE to the Podcast: https://pod.link/1438693620 Watch on YouTube: https://www.youtube.com/nathanielwhittemorecrypto Subscribe to the newsletter: https://breakdown.beehiiv.com/ Join the discussion: https://discord.gg/VrKRrfKCz8 Follow on Twitter: NLW: https://twitter.com/nlw Breakdown: https://twitter.com/BreakdownNLW

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, December 5th, and today we have reached the milestone of milestones Bitcoin at $100,000. 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. Hello friends. Throughout Bitcoin's history, there have been a couple numbers that really capture our attention and serve as narrative anchors for some reason or another. In the context of cycles, it's usually some point that we're swirling around for some extended period

of time. But when it comes to the really memorable ones, there are fixations for the future, either the reclaiming of a number that was once briefly breached and then lost, or something that seems at once so far out and yet so inevitable that it serves to anchor the energy of the community. For a very long time, that number was 20,000. 20,000 was, of course, hit very, very briefly in late 2017, and then throughout the entire next cycle was the marker and determinant of whether Bitcoin was back. Of course, we blew through 20,000 eventually 3xing that during the cycle. But interestingly, it wasn't really reclaiming 60 or 70,000 that was the narrative benchmark during the bear market, but instead it was always 100K.

You may remember the origin of the laser eyes meme where everyone changed their profile picture on what was then Twitter to have laser eyes was laser eyes to 100K. In the last few weeks, in the wake of the Trump election, that 100K number has felt more inevitable than ever before. However, Bitcoin being Bitcoin, it gave us its own fair bit of drama and anticipation on the way. And yet, today is finally the day. After weeks of waiting, Bitcoin finally crossed the $100,000 mark last night. It punched above 100K at around 9 in the evening on the East Coast, and the signs were there. Volume had been incredibly strong during the day and surged as the psychological barrier was broken. Short liquidations were relatively mild, suggesting this was just spot buyers pushing Bitcoin over the line.

Price kept running into the evening, immediately rising to 101,000, then topping out a little above 103,000, 15 minutes later. At the time of this recording, Bitcoin is just under 103,000 at 102.993, and I'm keeping a close eye even as I record to see what happens next. All told, Bitcoin market cap is now above $2 trillion for the first time. Year-to-date returns are 126%, which actually only makes 2024 the fifth best year on record. Still, the vibes are absolutely immaculate. Bully Esquire wrote, Take a minute to stop and enjoy this milestone. $100,000 Bitcoin is an incredible achievement.

We've been called criminals and terrorist supporters. We've been laughed at and told we are throwing our money and careers away. But you know what? We were right. We won. Dozens of people on X showed themselves opening bottles of scotch and champagne that had been reserved for this moment. Cameron Winkleboss tweeted, Bitcoin Breaking 100K is one of those moments that people will remember for the rest of their lives.

Guillaume Hine, a senior marketing director at McDonald's, pointed out another very important event, tweeting, Bitcoin reaching 100K the exact day McRib is back is effing hilarious. This, of course, referencing the synchronicity between the MickRib and Bitcoin cycles, pointing out the return of the McRib has, for whatever reason, always marked the start of a multi-month breakout. CMS Holdings is redecorating the office, tweeting, 100,000 American dollars per Bitcoin, throw out your BitClox, while others got a little philosophical. Investor Dan Held wrote, $100,000 a Bitcoin doesn't just represent a price. It represents that the world is gradually acknowledging

Bitcoin as the reserve currency of the future. It represents a rejection of the existing financial system. It represents financial freedom. Justine Harper, VP of Bizdev at Unchained Capital, wrote, celebrating 100K by nursing the Weebay back to sleep feels fitting. Number go up is fun, but Bitcoin has always been about a brighter future, one where we can opt out even just a little from the current corrupt financial system. Bitcoin is freedom money, and it lives to fight another day. Mandrick commented, There is no, I told you so. There is only I wish you listened.

Congrats to those of you who did. 100K is an incredible moment in Bitcoin history, and I feel fortunate to be part of this with all of you. Many took a moment to reflect on their Bitcoin journey. Crypto Charles wrote, bought my first Bitcoin for $700 with my first check out of college, had 10K in student loan debt at the time. Today we hit 100K and it honestly doesn't feel real.

Between then and now, I quit my corporate finance job, started a crypto podcast, then used some funds to start two businesses I still run today. Everything I have came from crypto Twitter in this industry. Michael Krieger tweeted, 100K is truly surreal for me. I can still remember when it was $10 and I took a leap of faith and began accepting Bitcoin donations on my website.

I remember a time before Coinbase, the Wild West of Bitcoin, multi-bit wallet, bid instant, buying on Mount Gawks. I remember selling T-shirts for 0.1 Bitcoin apiece. Forever grateful to experience the magic of those early days and for all the interesting people and friends I met along the way. And yet perhaps strongest of all was the heavy focus on what comes next. Pomp wrote, 100K is a psychological milestone. Every boomer is waking up to headlines tomorrow and then going to buy some Bitcoin just

in case they were wrong. Welcome to the next phase of the game. Ryan Watkins agreed, tweeting 100K Bitcoin is the ultimate marketing event for Bitcoin. Bitcoin will be front page on every financial news outlet in the world tomorrow, creating the biggest signal in years that it's time to pay attention to crypto again. Rex sees things getting even bigger from here, tweeting, over 100K you will see more outsized moves going forward. 10K candles will become normal.

There will be days when Bitcoin moves 50K. Investor Travis Kling thinks the hardest part is over, commenting, it's undeniable. The path from 1K to 100K is so much more likely than the path from 100K to 1 million. And yet perhaps the best sum up came from Bitwise CEO Hunter Horsley. Borrowing a quote from 19th century political activist Victor Hugo, he tweeted, All the forces in the world are not so powerful as an idea whose time has come. The era of Bitcoin has arrived. Yesterday did seem an auspicious day for this to happen. The whole day had swirling narrative excitement.

At the New York Times Deal Book Summit yesterday, Fed Chair Jerome Powell sat down to discuss the changing nature of the U.S. monetary system. The wide-ranging discussion covered Fed independence, government deficits, and the future of the U.S. dollar. Towards the end of the interview, Andrew Sorkin suggested that Bitcoin is a symbol for the loss of faith in the dollar and indeed the Federal Reserve system. Responding, Powell said, I don't think that's how people think about it. People use Bitcoin as a speculative asset. It's just like gold only its digital. People are not using it as a form of payment or a store of value. It's highly volatile. It's not a competitor for the dollar. It's really a competitor for gold. That's really how I think of it.

During a separate question, Powell said that his main regulatory concern was the financial stability of banks offering crypto products, but that the Fed doesn't have that large of a role. At the same time, in an interview in Moscow, Russian President Vladimir Putin also discussed how he thinks about Bitcoin. Putin said, who can ban Bitcoin? Nobody. And who can prevent the use of other electronic means of payment? Nobody. Because these are new technologies, and no matter what happens to the dollar, these tools will develop one way or another because everyone will strive to reduce costs and increase reliability. Just last week, Putin signed an experimental regulatory regime into law, which would allow digital currencies to be used legally to settle foreign trade.

The pair of statements seems to represent where power centers in each nation stand on Bitcoin at the moment. Much of the U.S. establishment views Bitcoin as just another speculative asset, and not something likely to displace the dollar. In Russia, the view seems to be that any alternative payment's technology is interesting, and Bitcoin is near the top of the list. The common thread between the two is that both are resigned to the idea that Bitcoin is not going away. BitPain pointed out the obvious tweeting, Moron say, the government will ban Bitcoin. A literal dictator says, nobody can ban Bitcoin. Neil Jacob shared his view on the Putin statements in response to a friend suggesting that Russian adoption is bad PR, stating, Bitcoin is for enemies. That's the whole point. Putin isn't embracing

Bitcoin. He's capitulating to it. Citadel Knight thought Powell's comments were just as resigned to the future, tweeting, if there was any sign of capitulation from TradFi leaders, it's this. Powell endorsing Bitcoin and removing the risk of comparing it to the fiat dollars is as bullish as it gets. Another interview at the Dealbook Summit, however, was potentially even more interesting for Bitcoin. Citadel Security CEO Ken Griffin has been a longtime crypto antagonist. During the peak of the last cycle, he called Bitcoin a jihadist call against the dollar. Sorkin teed him up to deliver another headline-worthy soundbite, asking whether crypto was a, quote, crazy speculative bubble that will end badly. Griffin urged Sorkin to reconsider, respond.

The question is, how much of this is structured to try to capture the zeitgeist of the moment? Comparing Bitcoin to voting for Trump, Griffin said, people want to get away from the yoke of the government. Admitting that it may have a future, he added, you have to remember that an intangible asset like this, its value derives from intangible aspects. Part of it being in a community, part of having a sense of standing opposed to the power of the state.

People take joy in that. I think one of the things that we did see over the course of this election cycle is people saying, I want to have agency in my life. Griffin now acknowledges that, quote, crypto has been one of the greatest stories in finance over the course of the last 15 years. He said he regrets not buying crypto a few years ago. One of Griffin's few crypto-related purchases was spending $43 million on a copy of the Constitution in November 2021, largely as an act of spite to ruin the fund of Constitution Dow. Notably, had he invested in

Bitcoin instead, he would have almost doubled his money. And as we think about what comes next, of course, one of the most important factors is who is coming into power. Yesterday, we shared reports that President Trump was trying to appoint Paul Atkins as his nomination for the head of the SEC, and that has now come to pass. As a reminder, Atkins was the first ever libertarian SEC commissioner during the George W. Bush years. Since leaving office, he has run a consultancy advising fintechs and crypto projects on regulatory and risk strategy. He was reportedly hesitant to take the role due to the horrible mess made by Gary Gensler, but it seems he's decided he's up to the task. Trump positioned Atkins as an explicitly pro-C-Chair, stating, he recognizes that digital assets

and other innovations are crucial to making America greater than ever before. SEC Commissioner Hester Perce immediately offered her endorsement tweeting, We have a lot of work to do at the SEC to advance free markets, capital formation, investor choice, and innovation. I'm delighted that Paul Atkins will be returning to lead the effort. Having worked for him during his last dent at the agency, I cannot think of a better person for the job. Robin Hood CLO Dan Gallagher, who was on the shortlist at one time, wrote,

Paul Atkins is an exceptional choice to lead the SEC. I've seen firsthand his dedication to free markets, investor access of choice, innovation, capital formation, and upholding the rule of law. I look forward to seeing him return to the SEC and am confident that his leadership will drive U.S. capital markets forward. The Wall Street Journal editorial board called Atkins the anti-Gensler. During his time as a commissioner, they noted that he, quote, frequently criticized the agency for needlessly meddling in markets by issuing rules that raise costs for public companies and investors. And this comment pretty perfectly summarizes Atkins' regulatory philosophy.

He isn't in favor of deregulation for its own sake. Rather, he recognizes that ineffective regulation adds additional costs for investors and should be avoided. In other than words, we shouldn't expect a light-touch crypto regime or a lack of consideration of investor protections, but we can, I think, expect a massively reduced regulatory burden and a common-sense framework. Atkins' MO is to get out of the way of capital markets in as many ways as possible. Unsurprisingly, crypto industry figures unanimously approve the choice, with Jake Chivinsky, the chief legal officer of variant fund, summing up the takes by tweeting, it's impossible to express the magnitude of the shift we're likely to see at an SEC run by

Paul Atkins. Crypto has literally never existed without the overhang of uncertainty or hostility from U.S. regulators. This moment is a regulatory singularity before a new era for crypto. Putting a fine point on how likely to change things are, Representative French Hill has said that he is concerned about debanking and intends to scrutinize the practice once Congress returns in the new year. Hill was the chair of the House Digital Assets Subcommittee in the outgoing Congress and will be a senior member of the Financial Services Committee moving forward. During a hearing on Wednesday, he said, no one has any patience on that on either side of the aisle here. Legal businesses in the United States and this great country should have the freedom to bank and have financial services.

We've seen this over and over again. This committee is going to take a strong position on that. We have the documents we're reviewing. While this issue is no stranger for those of us in the crypto space, its profile has recently been raised dramatically when A16Z partner Mark Andreson showed up on the Joe Rogan experience and talked extensively about debanking. Now that the floodgates have been opened, we are hearing more and more stories. During the hearing, both Stellar Development Foundation CEO Denaal Dixon and Anchorage Digital CEO Nathan McCauley said that their organizations had been debanked, Coinbase's former chief marketing officer who's moving over to OpenAI, Kate Rauch, said that during the depths of crypto winter, she attempted

to withdraw money to pay to fix plumbing issues. She was told the transactions triggered a suspicious activity report, with the bank deciding to freeze all of her personal accounts. Of course, as I told you guys earlier this year, Bank of America randomly showed up for me earlier this year, cutting me off after a decade of banking, and intimating pretty clearly that it had to do with crypto. The great hope is that after two iterations of Operation Chokepoint, perhaps debanking politically disfavored industries will finally be consigned to the history books during this upcoming Congress, that as we turn the corner on 100K, the future looks very different than the past. And yet, there will be a through line. Bitcoin has already changed the world, as can be plainly seen in all

of today's stories. The asset and the people who believed in it have withstood government attacks, belittling comments, and widespread dismissal to get to where we are today. Perhaps the greatest testament to the inexorable march of Bitcoin, is that if you set an alarm from one year from now, I can very narrowly guarantee that no matter what the price, this milestone, which feels so big today, will seem like just another day in the Bitcoin era. Thanks for listening to The Breakdown.

Until next time, be safe and take care of each other. Peace.