The Breakdown - Crypto Fed Chair, Polymarket Bots, and the Faketoshi Movie

Episode Date: April 16, 2026

Trump's Fed pick has 30-plus crypto investments — and that's just what he could disclose. David walks through Warsh's filing, a Polymarket bot built on the theory that nothing ever happens, and Hollywood's Craig Wright blockbuster. TIMESTAMPS: (00:00) Introduction (00:21) Trying Something New (02:47) Kevin Warsh (08:58) Nexo Ad (09:34) Nothing Ever Happens Polymarket Bot (18:47) Nexo Ad (19:38) Thoughts on Upcoming Craig Wright Bitcoin Thriller FOLLOW THE SHOW › David — https://x.com/dcanellis › The Breakdown — https://x.com/TheBreakdownBW SPONSORS › NEXO Nexo is the premier digital wealth platform. Receive interest on your crypto, borrow against it without selling, and trade a range of assets. Now available in the U.S with 30 days of exclusive privileges. Get started at http://nexo.com/breakdown Get top market insights and the latest in crypto news. Subscribe to the Blockworks Daily Newsletter: https://blockworks.co/newsletter/ DISCLAIMER As always, remember this podcast is for informational purposes only, and any views expressed by anyone on the show are solely their opinions, not financial advice.

This episode is brought to you by Nexo. Step into a new era of digital wealth. Earn interest on your digital assets. Borrow against them without selling and trade all in one platform. Get started at nexo.com slash breakdown. Nothing said on the breakdown is a recommendation to buy or sell securities or tokens. This podcast is for informational purposes only and any views expressed by anyone in the show are opinions, not financial advice. Host and guests may hold positions in the company's funds or projects discussed.

Okay, welcome to the breakdown. I'm your host, David Canales. This is going to be a different type of episode to watch. what we usually do. As you know, we've been putting out episodes twice weekly. And on the Tuesdays, we've been releasing a video essay type episode followed by an interview with an expert guest. And then we kind of, we show you like a shortened version of that interview on the Tuesday

to complement the video essay. And then on the Thursday, we release the full interview. So you can kind of go deeper on the conversation. but over time we're just kind of tweaking the format, making sure that the content is super engaging and interesting for the audience to consume. So what we're going to be doing, at least for the next few weeks,

I'm going to try doing these solo episodes because about a month ago before we had the break for Das New York, I recorded a solo introductory episode. If you missed that, please go back and check it out if you're interested to know who I am and why the breakdown has a different host all of a sudden. But we had some really good feedback and really good responses to that solo app. So I figured why not do more of that?

And something also that the audience has been requesting somewhat is more stuff about current events and news of the day or news of the week because NLW used to do. NLW used to do that for you. And obviously you're missing that in the content that you're consuming, at least from us. So this is going to be my first attempt at doing that. And we're also going to release this as a video episode two. I'm going to be talking about what I'm seeing on my screen as well. So if you feel like watching the video version of this, please do follow along.

But okay, so let's jump into it. So this week I've got three interesting things that I'm looking. looking at at least. The first is actually this story about Kevin Wash. So let me share my screen here. So this story came out a day or two ago. Actually yesterday. This is from the Wall Street Journal. So Kevin Wash, President Trump's choice to lead the Fed has actually disclosed a sprawling set of financial interests worth well more than $100 million, including states in Elon on must space x and funnily enough prediction market firm polymarket and and actually like it's not just polymarket on the crypto side it's actually like 30 plus crypto uh and blockchain web three

investments that that kevin wash actually holds if you're not familiar with kevin wash uh they do a little bit of a profile on him down here he began his career at morgan stanley and then worked as as an economic aid to president george w bush before serving as a fed governor from 2000 seats from 2006 to 2011. So a long-time banker, a long-time financier. He was at the investment fern of Stanley Drucker Miller for a while and earned more than $10 million in consulting fees last year. So a big-time banker, big-time trad-fi guy,

and he's apparently well deep in crypto and a bunch of other stuff. So actually in here is a bunch of investments that he, could not disclose apparently due to non-disclosure agreements and he said that he would probably divest some of those if he was indeed nominated to lead the Federal Reserve at the end of the day. But let's just, I thought it would be cool to just walk through some of these crypto and blockchain investments that Kevin Warsh has disclosed. These are just in alphabetical order. So I'm going to share, I've pulled the actual filings and kind of condense them into. into a spreadsheet.

So these are in alphabetical order. And I mean, there's some really good stuff in here. Like he's an investor in the Lightning Network, which is interesting, the Bitcoin Lightning Network. There's also he is an investor in optimism, the Ethereum L2, investor in Solana. It doesn't say if he owns the Liquid Tocetka. For all of these crypto and blockchain stuff, there's actually no value associated with the disclosures. It's just that he does have a material investment in them. Let's see if in the WSJ report it says what the minimum disclosure amount.

So the holdings are complex WSJ reports and the disclosure only specifies their values within large ranges. So determining Walsh's precise net worth isn't possible. All told, the disclosure signals that Walsh's assets might be valuable. to in 131 million and more than 209 million. So I mean, some of the, some of the disclosures are like under $1,000. So it's not exactly clear how big his holdings are in each of these things. It's worth pointing that out. But there is also, what else is in here?

There's Polymarket, Solana, Tenderly, which is an Ethereum developer platform. So there is some really good stuff in here. but there's also some rather questionable projects. Diso is probably the most questionable in here. That was originally BitClout, which was founded by this fellow Nader Al-Naji, who maybe you're familiar with him, who's actually doing an algorithmic stable coins way back when

and then came back and try to get into decentralized social and bonding curves for creator coins and stuff like that. The SEC actually charged this fellow with fraud a couple of years ago for defrauding investors of around $3 million. But that was last cycle. But it's just curious that it's interesting that as sophisticated as Kevin Wash is that he did pick up a lemon like D.Soe. There's also Friends with Benefits.

I mean, Friends with Benefits was a big deal back in the day. Nowhere near as fraudulent as D.S.O., obviously. But that's a curious one as well. What else is here? I mean, Polychain, the VC investment firm, that's an interesting one. DYDX compound, Brave, the Brave browser that's very crypto-native. That's another good one for him to hold. But it's just curious that there is such a range here of projects with different qualities.

So that was really cool to see from Kevin Wash. Blast, which is the yield generating Ethereum layer too. That is a lot of incentives to pick up Blast when that first came out. But it is quite DGEN. A lot of people have pointed out how DGEN forward Kevin Walsh's crypto investments are. And it does seem to be the case. If you scroll down here, I'm showing off the rest of his disclosure. all up, how many is there?

There's, I mean, hundreds, hundreds. So, you know, the crypto part of his disclosures at least make up about 10% of his material holdings, which is fairly decent, I would say. It would be nice to see if he was holding liquid tokens or equity investments in these firms. I know Friends with Benefits was wound down or it was acquired. by a private equity firm, I believe that's correct. Please don't quote me on that. But, but yeah, it would be, would be curious to know if these are, if these are NFT,

if these are, if these are liquid coins that he's holding. Dapper Labs is also a big NFT play in 2021 as well. So he's been doing this for years, obviously. So beat up Kevin Warsh. And let's see if we can get a degenerate leading the, the Federal Reserve. and would be a lot of fun. Step into a new era of digital wealth with Nexo, the Premier Digital Assets Wealth Platform.

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reduce borrowing costs and up to 0.5% crypto cashback on trades. Get started today at nexo.com slash breakdown. As always, investments in blockchain technology involve risk. Terms and conditions apply. Do your own research. Okay, so what is the next thing that I'm looking at? Next thing I'm looking at is actually this, I mean, polymarket trading bots are so big right now.

And I think that, you know, it's so, I mean, Algo traders and all that kind of thing. It's been a cottage industry for the longest time. But it's very interesting to see that now polymarket bots have become kind of the next evolution of the algro trading. I don't want to call it an industry, but the algro trader corner of the internet. And for those who aren't really familiar, I mean, algro traders are like you can come up with a, I mean, LLMs have kind of changed that a little bit, change this a little bit, but you can, you can design a bot that will go out and trade for you and read signals and and try and make money for you based on particular strategies and and you know you would have anyone can make an

algorithm and try and sell it they normally comes with courses on 4x and and stuff like that but and I'm sure if you're scrolling through Twitter you would see a lot of polymarket bots these days from from people who have cooked up all kinds of different strategies and it's very difficult to know which ones are scams and which ones are just trying to fleece you or there might be, you know, malware or fishing, that kind of stuff as well. But this one from Sterling Crespin, I thought was really cool, a polymarket bot that automatically buys no for every non-sports market and holds to resolution. So it's essentially boiling down the theory that nothing ever happens into a potentially profitable polymarket bot.

And, you know, background on the nothing ever happens theory. I mean, I think we all are watching and doom scrolling and seeing the narratives play out in real time that say the whole world is going to change. You know, Trump is going to drop nukes on Iran or AI is going to make everyone jobless or, you know, there's going to be no jobs in five years. It's only going to be LLM engineers or something like that. but that nothing ever happens, crowd would say that, well,

none of that is really going to happen. So you might as well sell all the volatility. So this is essentially doing exactly that. So Sterling Crispin, he's crunched the numbers and he's found that 73.4% of all polymarkets resolve as no. So why would you bother trying to predict the future, make predictions when you could just buy the no votes and make a profit.

So how this works, I mean, you can flick through the GitHub. You can plug GitHub into chat GPT or Claude to try and figure out exactly how it works. But basically what it does is that it pulls all the markets from polymarket and keeps only markets that resolve binary. So either yes or no. They can't be sports related because obviously that is. that that would skew the probability a little bit because crazy stuff can happen in sports.

They need to be standalone, so they can't be a polymarket that is relative to another polymarket that would resolve. They have to be just a standalone market. And they have to inspire within the next three months or so. But also, I mean, that excludes stuff like crypto markets, macroeconomic stuff, finance keywords. It gets rid of those too.

So it's very black and white markets that aren't subjective and aren't related to what the market would say. It excludes stuff where the market has a vote in what the outcome is going to be, if that makes sense. So no highly narrative driven or efficient markets is basically the idea. So what? So what it does is it essentially it buys, it essentially only buys when the market is implying that there is a 35% chance or more that the event does happen.

So if nothing ever happens and the polymarket is showing that there is a 35% chance or more probability that that is going to happen, then it is usually. that probability is too high because nothing ever happens and then it buys the no vote and holds it until it resolves which I find rather compelling it uses there is some guard rails here for the bot it uses only around 2% of the available cash per trade so the whole idea is to have very small bets over on any polymarket that fits these conditions. And I suppose it would also make sense that the bot has to buy the no votes as soon as possible because if there was a lot of bots operating on polymarket that were doing the same thing, then effectively it would be pricing

in the fact that nothing ever happens already and you would essentially get no real edge. if there are a lot of bots like this operating on polymarket. So it would need to, the bots would need to get in on the ground floor. There is also some logic about handling liquidity in the markets and making sure that it is getting the right price for things and stuff like that. But what I find really cool about this is that it's, I mean, I think that we're all a little bit contrary and deep down. into crypto and Bitcoin that you instinctively want to go the other way than what the whole world

is telling you is the safe bed or is the nice thing and and I think that at the moment there is so much i don't want to say doomerism but there's just so much hype and velocity around the power of AI and what the world will look like in three to five years. And we're all getting older. We're all getting more advanced in our careers. We're all having children. We're all starting families and building up our own businesses and stuff like that. And so there is a lot of pressure to stay ahead of what the normies are doing.

But the contrarian in me, the contrarian me would like to think that really nothing ever happens. And something I find here is that this is somewhat of a, it's like the opposite of the Black Swan theory almost. It's like an, it's, it's like an anti-Talib trade. There's nothing ever happens stuff. Because, you know, black swans are real. That is true. But they are rare. So the, my instinct here is that this Pollymarket bot, the nothing ever happens bot would actually do quite well as long as they were making quite small bets on things. And what's curious is in here in the comment, writer Rips, who was embroiled in a legal dispute with bored apes and euda labs from memory.

He asks, have you made any money with it? And Sterling Christmas says, no, I have a bunch of other bots going through. I have a bunch of other bots going, though, that are profitable. this one is kind of just for the lulls as they say it has basically zero risk management it's a very naive bot which you know i suppose that you can you can tweak that to make it better but uh so i would put this in the camp of like hey that's that's quite a novel uh trading bot that probably warrants a little bit more investigation um but i i found this particularly interesting And yeah, as I said, if you're ever falling around with polymarket bots that you download on GitHub or find on Twitter, please just do your own research and vet those things very thoroughly.

But hey, I live in a jurisdiction that I cannot appropriately access polymarket based in the Netherlands. but if you are fully around with polymarket bots, I would love to hear from you because I'm very interested in agentric trading and all that kind of thing. But it is very much a wild west out there in terms of the trustability of some of these things, especially when it's handling your money. So just be careful. Okay. So the next one is quite brutal.

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I'm sure that you have been following along the fallout of the New York Times story that supposedly definitively proved that Adam Back, Blockstream CEO and cyphepunk legend and and Bitcoin celebrity Adam Back is actually Satoshi Nakamoto, which is like a very old theory that keeps getting shot it out every now and again. So this is already in the zeitgeist of like, hey, who is Satoshi? And maybe it is Adam Back. And at the same time, we have Hollywood dredging up the Craig Wright saga all over again in order to make a film.

It's just a little bit insane. So this is from Deadline. Galgadot and Ila Fisher joined Casey Affleck and Pete Davison in Doug Lyman thriller Bitcoin as pickheads to Khan market. I mean, oof. So, Doug Lyman, I wasn't super familiar with who Doug Lyman was because he's not, I just didn't recognize his name. but this is a film director and producer. Let's look at his filmography. He directed the firstborn identity.

He directed Mr. and Mrs. Smith, Jumper. Edge of Tomorrow, also the executive producer on that. American Made, the Roadhouse remake. He directed that. So Bitcoin is his next film. and I mean it was originally meant to be titled killing Satoshi but now it's officially titled Bitcoin this is how Deadline described the synopsis

it's just quoting the synopsis sorry Bitcoin is the true story of one man's quest to prove that he is in fact the creator of Bitcoin a claim that puts his life in peril and sets off a global firestorm and a wild high-stage race between the who's-who of tech billionaires and world leaders with the fate of the world's entire financial system hanging in the balance all leading to the question, why do the world's most powerful people want to erase one man

and why would they spend hundreds of millions of dollars to do it? And I mean, Jesus, like, I mean, to deadlines credit, they do, kind of give us this blurb about the whole Craig Wright saga. You know, but it's like, even the language here I find a little bit wishy-washy. The claims have been regarded as false by many, false by many in the cryptocurrency community. And in 2024, the British High Court ruled that Wright is not Nakamoto and must stop saying he is so. I'm very curious how much money Craig Wright was able to sell his naming rights for this project.

It is a very curious project in general. I mean, yeah, I just can't believe that we're still doing this. I really thought that the whole Craig Wright cycle was over when the British High Court ruled that he needs to stop claiming that and that is claiming. names were fraudulent. Something I found interesting in the comments that is worth looking into, it was confirmed in prior leeks the movie was partially funded by Calvin Air. The writer is also Calvin Air affiliated.

And I haven't take this with a grain of soul because it is just in the comments section, but made by those who sunk cost fallacy who fell for Craig Wright's giant con job and now can't let it go. uh it's i mean i i haven't fact-checked that but i'm inclined to to at least sympathize with with that take because yeah i mean bsv was just a nightmare uh and you know a lot of people were completely captured by by craigwright's story um but i will say that i am this would have to be the most high profile um This would have to be the crypto movie that has the most high profile actors in at least my memory.

Because there was also crypto, the crypto movie starring Kurt Russell actually in 2019. And if you miss that film, it's worth going back and having a look because I just found that film in particular quite fascinating because the main. the main character was a anti-money laundering analyst at a bank who got caught up in a crypto conspiracy involving Kurt Russell's farm and all this stuff. It was a great cringe watch. But this film at least looks to be a little bit more high quality in terms of the actual plot. But just based on what we know.

about the reality of what happened. I just really wish that it was not being made because it is only going to muddy the waters, I feel. And I mean, if the New York Times can put out with confidence a report, you know, and to the credit, like the, the journalist who wrote the New York Times piece is widely considered one of the best investigative journalists in the world. You know, if the New York Times can put that out and people can be sold on the idea that Adam Back is really Satoshi, even though there are all these signs pointing to that actually Adam Back is not Satoshi.

And they were quite different people. I just worry about what's going to happen out in the real world when you have a blockbuster Hollywood film. essentially, I mean, from what I interpret of it, it is painting Craig Wright as something of an anti-hero. And this was always the defense as well. Like I remember back in the day, five, six years ago when I was really kind of like a beat journalist writing about crypto all the time,

you would see major tech websites, I think it was ZDNet, would put out quite BSV-aligned narratives about developments on that network and the things that Craig Wright and N-Chain were doing. And frustrated by the fact that, you know, quite surface-level analysis was being done on what BSV was doing and the claims that Craig Wright was making.

I would even DM the reporters that would do that. and ask them, why is it that you entertain this project in the way and you don't show skepticism about what they're doing? And they would tell me, it's like, well, Craig Wright has, Craig Wright has been super stubborn about his claims despite all of the public pushback and despite all the lawsuits and everything. And he still claims to be Satoshi. So that seems to me to be compelling and I worry that this film is essentially the same thing as that. And it's quite a roundabout way for Craig Wright to still be pushing his narrative into the public. So I mean, I will watch Bitcoin when it comes out. I just wish that it wasn't being made and I imagine that you all

feel something somewhat similar. So that's about it for For this solo episode, I hope you enjoyed. It was a little bit rough in parts maybe, but we'll try to get next week and see if we can get it happening smoother. So for now, take care of yourselves to borrow a phrase from NLW. And we'll see you next time. Bye.