The Breakdown - For Bitcoin and Crypto, a Week of Mainstreaming Moments

Starting point is 00:00:04 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. The breakdown is sponsored by nexus.io and produced and distributed by CoinDess. What's going on, guys? It is Saturday, April 3rd, and that means it's time for the weekly recap. Now, before I dive into the recap, I hope you enjoyed the replay of my interview with Kathy Wood from last October. Obviously, in Bitcoin terms, it has been an absolute century since we had that conversation. But because of the Long Easter weekend, CoinDesk was technically off Friday and we had to put in a replay show.

Starting point is 00:00:46 And I thought so many of you have joined the community since January, since the end of December, since even February, that I thought it would be really cool to go back and replay one of these interviews with one of the most interesting, profound, and successful investors of the moment. So hopefully you enjoyed that. We're actually going to have more folks from ARC on the show. in the coming months. But let's move back to the weekly recap. When I was thinking about this week, it was extraordinarily clear to me what the main theme was. I don't know that I've ever seen a week in my entire history of Bitcoin and Crypto that had such an insane density of

Starting point is 00:01:23 mainstream moments. Let's start last weekend. How many people popped on Saturday Night Live expecting to see Pete Davidson ask a Treasury Secretary Janet Yellen, played by Kate McKinnon, What the hell is an NFT? We discussed it a little bit on the show earlier this week, specifically around the question of whether this was, in fact, not just a mainstream moment, but instead a top signal. I would encourage anyone in the context of any discussion about top signals to separate price from culture.

Starting point is 00:01:53 There is certainly some interesting evidence that there is at least a cooling off in NFT prices. Bloomberg reported earlier this week that the average daily NFT volume had gone from about 19 million a day around Beeple's Christie's auction to about 3 million a day this week. I'm not sure if that reflects a top or just a necessary chillout of what had been an insane sprint. But in either of those cases, I would argue that NFTs made it to SNL so fast, not just because they had a crazy price, although that's clearly a part of it. The song is, after all, at least in part, about how everyone is getting rich from them.

Starting point is 00:02:28 But it was also on SNL because NFTs are hitting a cultural nerve and a ton of cultural figures are looking to the opportunity they represent. That doesn't mean that price and price bubbles couldn't tear the whole thing down, but it feels to me that there's something else going on beyond just pure speculation that's worth keeping at least one little side eye on. This is far from the only mainstream moment, however. Stable coins and Ethereum both had a mainstream moment at the beginning of the week when Visa announced that it was incorporating USDC on Ethereum as a native settlement currency. To be sure, is a very limited scenario at first, a small partnership with Crypto.com, powered by Anchorage APIs. But it seems like Visa's intent is for this to be just the beginning.

Starting point is 00:03:13 Now, I think there's an interesting question around whether this was bigger news for USDC, the asset, or Ethereum the protocol. Both obviously have a stake in it, but I think you could argue either with some conviction. What's more, I think that this question of whether the protocol or the asset matters more, is going to become increasingly important. I asked Twitter, which if they thought it was bigger news for, and it was actually closer than you might think. Of more than 1,000 votes, 55.6% said Ethereum, with 44.4% saying USDC. Either way, it was a big deal. Looking for the best way to unlock your crypto's liquidity? Nexo.io is exactly what you need. Borrow against your digital assets at just 5.9% APR.

Starting point is 00:04:02 earn passive income with yields of up to 12% and swap between more than 75 market pairs with the instant nexo exchange. Try the nexo wallet app to get the whole 360 degrees of crypto banking. Get started at nexo.io. Next in this parade of mainstream moments is the one that is probably biggest in terms of our long-term sense of how crypto goes mainstream. This of course is the announcement that PayPal would be rolling crypto checkout, i.e. paying with crypto, to its network. work of 29 million merchants, starting imminently. In a statement, the CEO Dan Schumann basically said that although trading and speculation and long-term hodeling had been the primary drivers

Starting point is 00:04:45 of crypto action so far, PayPal was convinced that it was time for this industry to get into commerce. Now, this effectively obliterates a long-standing fud that you can't use your Bitcoin to buy anything actually important, especially when you combine it with other things we're seeing, like Tesla accepting Bitcoin for vehicles or the Oakland Athletics and other sports franchises dabbling with Bitcoin. And of course, there will still be a ton of people who don't want to part with their hard one coin, me for one. But the fact that they can is still huge. And the mechanism for enabling that matters as well. As I said on my show about this on Wednesday or Tuesday or whenever day it was, I can't even keep track anymore. This isn't just about merchants having

Starting point is 00:05:27 the option. It's PayPal building it natively into the checkout experience. so that merchants don't actually have to do anything different to accept crypto. All the fiat conversion happens automatically. It's not impossible that when all is said and done this year, this is one of the biggest actual changes in terms of how people engage with this industry as a whole. Now, with all of this, it's almost like the institutional Bitcoin folks far like they weren't having enough of a newsweek themselves. Goldman Sachs fixed this when they completely, and I mean completely, reverse their position from about 10 months ago when they said that cryptocurrencies including Bitcoin were not an asset class. Going back entirely on that, they announced a full spectrum of Bitcoin

Starting point is 00:06:12 and crypto investments. They went to pains to say that they're going to be doing even more than some of their other competitors, offering products that trade 24-7 at the speed that the crypto industry moves. Frankly, the lack of detail, the weirdness of it, it felt like a hurried or rushed announcement, and it felt to me like there was pressure from competitors, namely Morgan Stanley. Morgan Stanley announced three funds at the beginning of the month where their wealthy clients could get exposure to Bitcoin. Those would be run by Galaxy Digital, Nidig, and others, and represented the first time that a major investment bank was allowing their wealthy clients direct exposure to Bitcoin, not just some approximation through the Grayscale Bitcoin Trust, but actual direct

Starting point is 00:06:54 exposure. When I saw the way that Goldman made this announcement such a big deal, it felt to me like they really felt they had to get it done now, even though they couldn't say much about what they were going to actually offer, or frankly, weren't totally sure what the final offerings were actually going to look like. Not to be outdone, however, Morgan Stanley themselves revealed even more Bitcoin engagement this week. Five Morgan Stanley Mutual funds now have the ability to invest indirectly into Bitcoin via gray scale or through cash service. settled futures. The institutional fund, the institutional fund trust, the Europe Opportunity Fund, the Insight Fund, and the Variable Insurance Fund can all invest up to 25% of their assets into BTC.

Starting point is 00:07:37 Now, regulatory filings did not indicate whether any of them had already made investments just that they could. And, by the way, if you're interested in this, Morgan Stanley is currently hiring for a crypto and blockchain lead analyst. So, just to recap, we've got NFTs on SNF. We've got two major announcements about payments technology. We've got institutional Bitcoin creating an arms race between two of the biggest financial firms in the world. These are all mainstream moments. And then, of course, there's Chipotle.

Starting point is 00:08:10 Chipotle is giving away $100,000 in burritos and $100,000 in Bitcoin in a game they're calling, cleverly, burritos or Bitcoin. It's inspired by the former Ripple CTO Stefan Thomas, who lost the password to a hard drive that had $387 million worth of Bitcoin on it. The game involves a rescue mission to crack the code of a digital wallet. 10,000 players will win a free burrito, 50 will win 500 in Bitcoin, and three will win 25,000 in Bitcoin.

Starting point is 00:08:39 Suffice it to say these are strange times, but they're cool times as well, and they certainly feel like the beginning or maybe the middle, but certainly not the end of this big upward cycle. So for now, I guess, enjoy your burritos, enjoy your Bitcoin. And until tomorrow, be safe and take care of each other. Peace.

The Breakdown - For Bitcoin and Crypto, a Week of Mainstreaming Moments

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