The Breakdown - Friday Five: Tether’s $500B Play, SEC Opens the Door, and Vanguard Bows to Crypto

Episode Date: September 27, 2025

In this week’s Friday Five, we dive into Tether’s jaw-dropping $500B valuation bid, the SEC’s surprise innovation exemption, bipartisan momentum on a market structure bill, Ethereum’s latest Wall Street narrative, and breaking news that even Vanguard is finally letting customers buy crypto ETFs. Plus, what Bitcoin’s bloody September tells us about the cycle ahead. 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 Friday, September 26, and that means it's time for the Friday 5. 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 at the show notes or go to bit.ly slash breakdown pod. All right, friends, welcome back to another Friday 5. Today we are talking about everything from Tether's monster fundraising to the SEC getting out of the way.

Lots and lots of to discuss. So enough yapping for me here so you can hear me yap over there. Good morning, everybody, and welcome to yet another Bloody Friday in crypto markets, Bitcoin trading in the 109,000 levels. We were never supposed to see again. We were supposed to be a 250,000 by now last I checked. Predictions not looking as strong as they were. Good morning, sir.

How are you today? Good. What's happening? A lot is happening, actually. And one of the biggest stories, certainly, of this week is that crypto giant Tether seeks funding at $500 billion valuation, looking to raise $20 billion. This would make them effectively the largest big name private company in the world, larger than OpenAI, larger than SpaceX. I mean, this is absolutely massive. And from what I read, the chairman of Tether would become the fourth wealthiest person in the world with Tether at a $500 billion valuation.

I was today years old when I realized that was not referring to Paloara, but to some other guy. Yeah, Tether continues to be a mystery, even for those of us who spend every day talking about them. No, I mean, it's a massive number. It's important to caveat that this is sort of what they're floating, could end up being, you know, beaten down a little bit. But, yeah, it's, I mean, just a massive signal of how valuable stable coin infrastructure

is and what power these companies have. And they're doing it with roughly 100 employees. Yeah, I mean, the ratio is absolutely insane. Man, it's wild to remember. There are people whose entire personalities are hating Tether still to this day. Next. Boy. Yeah, they'll hate me too, so I enjoy watching the success.

But listen, if we're going to be intellectually honest about Tether, one of the greatest companies on the planet, maybe some of the things were true in the early days. Yeah, I mean, they settled with the New York AG about this, you know. Right. But the whole backed by Chinese paper and maybe not all cash in the bank and short-term treasuries in the early days when there were kind of no rules and they were just bootstrapping it. Probably some of that was true.

I wouldn't go as far as say they were never fully backed. I would just say that they were potentially never fully backed by what we want them to be fully backed by to feel safe. Yeah. Kurtow World was a lot different six years ago. Let's just say that. Yeah. How do you think that the Bohind's USAT American Division plays into this news?

because that was a huge headline really last week that Bo Hines was obviously had left the White House and was going first as an advisor to Tether now, the CEO of basically the American armed to launch a new stable coin compliant here. Do you think this was all a part of the same sort of cadence of announcements and plans? 100%. I mean, it's a momentum play for sure. I mean, look, they're smart. They know that right now the way to play is to be close to the centers of power in Washington. They're playing. They're playing that game very clearly. I mean, Bo is a prime example of that. I think that Tether was going to have a successful, had the potential to have a successful U.S. launch kind of regardless of that, but they're very much leaning into the opportunities of the moment. And so, yeah, I do think it's all,

all connected. One of the more interesting or sort of like limited kind of conversations that I saw around this is a bunch of people asking, well, if they're so profitable, why would they raise more money? Which is just the most insane question to me, like, because they're- I asked that question on my own show and, you know, like rhetorically. but somebody said when something off is a lot of money, you take it. Yes. I mean, look, so yes. So if would you trade 3% of your company for $20 billion is one starting question.

Beyond that, though, no company that gets to this state does so without enormous ambition. And Tether has been signaling for a year now about all the other types of things that they're interested in. Not really giving a bunch of plans, but it is very clear that it's not like they're going to win stablecoin infrastructure and be like, cool, done for never going to build anything new. This is all about building a balance sheet that they can go do whatever they want with and follow their nose. Also, frankly, I think that one of the things that is important to remember is that a huge part of the profit of these companies is based on treasuries, right? It's based on the interest rate on treasuries. That is not guaranteed to last forever. In fact, there are many reasons to structurally think, especially if you were in the crypto space,

that the government is going to be forced to bring interest rates down long term for debt reasons and debt servicing reasons. And so, of course, you're going to want to build resiliency into your model as well rather than just sort of design everything around the good times of high interest rates. So, I mean, look, it makes a ton of sense to me. If they can actually get $20 billion for 3% of their company, that's huge. The other piece that I thought was an interesting point that some are making is that there are likely now lots of folks in and around the tether orbit who need to do things like take loans against the value of their equity and basically who are trying to get liquidity without having to be liquid. And for those things, having external valuations and

things like that, it can be important. So all sorts of potential reasons to want to do it. But look, if you're looking for just the big banner headline, it will be the most or tied for the most valuable private company in the world, depending on how you look at Open AI's recent share tender offers, which are at around the same price. With 100 employees. I'm sure that will expand. But I think your point about interest rate exposure is the most important. We've harped on that here quite a bit. But you look at a company like Circle that's now public, and you're effectively just buying interest rate exposure

until they find new and creative ways to make money and expand. Right. So there's a lot of pressure on these if we go back to ZERP or anything close because they're going to lose 60, 70, 80 percent of their income. Hence why Circle probably wants to launch their own chains. They can make money that way. And also we had the Circle News this week about rolling back transactions maybe we won't even take into that.

But they need new business models and new ways to get a lot of money that are not just free money. These are super smart companies. They know that they are at a race against bigger forces than themselves, and they're going to plow resources into going and building those new avenues. Yeah. The next story of the day, obviously, maybe the main story of the day just because we're all hyperbolic is price action. Bitcoin has had two of its three biggest liquidation events of 2025 in the last four days,

2.7 billion in long liquidation leverage has been wiped. I haven't actually dug in today at whether this was primarily alt coins or Bitcoin on the back end, but I know Dave Weisberger dove into this pretty deep on Monday that it was only 300 million in Bitcoin on the first liquidation event and the other 900 or billion was effectively altcoins across the market. But here you go, a largest sell pressure we've seen since June 2025 when it was all over again. We all know that that's a sarcasm. We have the playbook here that Dave broke down, which is that basically this is whale manipulation, a hell of a lot of money to be made by liquidating longs.

And, of course, Justin, $22 billion worth of Bitcoin and Ethereum options expire today. So a lot of very market-specific forces driving price right now without being able to point to anything wildly specific on the macro or fundamental side. Yep. I mean, look, I think that it's wildly reductive, but I think you can do worse than dividing price action into one of two categories, which basically you just articulated, is this fundamentals driven, macro driven, you know, forces that are knowable in some way, narrative driven even. Or is this not those things? And if it's not those things, that doesn't mean that it's not important, but it does mean that if you are not a professional trader, clamming up and sitting on your hands tends to be the best answer. And trying, not to read too much into any short-term signals is kind of my, you know, watchword. Like, this feels like the type of action where by next week we could be having a totally different conversation. I think that, in fact, in some ways, to me, the most interesting thing to try to suss out is how it is interacting with the vibes. Is it reinforcing a narrative that maybe we are

stalling out and maybe we are at end of cycle? Is everyone still treating it as sort of like actually a September recalibration? You know, we talked about how September was going too well, either last week or the week before. You know, yes, September for Bitcoin in history. I was bringing it up, as you said it, September 18th. That was all 10 days ago

when I retweeted that and said it's all over. Right. And so the question, you know, I'm always interested in more in the kind of the meta analysis and how people are feeling about it. And look,

I think that right now my read is nobody knows really how to feel about any market at the moment. It's just confusing. It's been confusing for a long time. I think we tricked ourselves into thinking that a rate cut would bring clarity,

but, you know, Powell's too shifty for that. You know, we can't get a rate cut with clear signals. It's got to be confusing. And so it's a Roershack test, as every kind of market move is right now, that really is going to tell you more about how you're feeling about things than what the market is doing, really. Yeah, I mean, generally we see a very bullish fall, which should give you natural pause that everybody's expecting a very bullish fall.

So good luck figuring that out. But October is as good as September is bad. So we will see if this is just kind of the last shakeouts of this summer period. Dave Weisberger once again likes to point out that during the Jewish holidays, this tends to happen. And then things start to rocket again once again in October. So we will see. But for now, Bitcoin definitely looking on the weaker side. I will also say that I do not believe that folks who are not primarily crypto traders are viewing everything as a guaranteed bullish fall, right?

People who are just sort of in traditional markets. And that overlap is more profound than it's ever been. going to continue to get overlapped, right? In fact, my read on traditional markets right now is they are more nervous about the extent to which value is concentrated in sort of technology leaders than they have been for a while. I mean, it's just, it's impossible to ignore. Now, there are, on the flip side, bulls who are saying, look, you know, maybe it's time we actually believe that this infrastructure build out is real and it's going to happen. But by and large, I think, people are more nervous now than they were, call it even six months ago. And so, you know, again,

we are going to have to deal with the fact that traditional markets are now fully intersected with crypto markets and are going to shape the nature of the cycle. Yeah, I think that that's a good point that obviously the more institutionalized we become, the less our narratives inside our bubble matter. So the next story here is a pretty big one. It's in line with everything we've seen from regulators and from the SEC specifically, but U.S. SEC I's innovation exemption to fast-track digital asset products. This is from Chair Paul Atkins, who's effectively been bullposting and lecturing at a ridiculous clip

since becoming the SEC chairman. I mean, we had Project Crypto, obviously, and now this is just a further continuation. This definitely rings of Hester Persis' Safe Harbor ideas that we've seen floated for many years, but basically saying, hey, crypto companies are going to be allowed to just release products in the United States, willy-nilly, and we're going to eliminate the regulatory hurdles.

And I think you said, burdensome rules, those burdensome regulations. Get those out of the way and just let people start dropping products. Yeah. I mean, look, we are in now, we are firmly in the shift away from just are all our regulatory allies talking about things to what are they doing. And the SEC is, you know, once again, for whatever reason, it's always the SEC, good or bad. But they are, all of the signals are incredibly bullish, incredibly positive. This is the type of thing that really, if we are very serious about creating, you know, the crypto capital of the world in the U.S., this is the type of thing that's going to enable it,

right? Space for entrepreneurs and creators to design, experiment with new things, while knowing that they're not going to be, you know, have their shoulder knocked on later. Now, I will be interested to see if these things actually go through, how much the legacy of the past and the potential for future regime changes still gives people pause. I, for example, would not be rushing to do, you know, scary unregulated things. I don't like for myself personally to base my actions on how compelling my future court arguments are. And so I think that people are going to be still a little, a little gun-shy, let's put it. But I'm glad to see

them actually trying to substantiate and create the pathways that they've been talking about. Yeah, the pendulum will swing back. I mean, there's no question. I guess what this naturally begs is the question. Does this mean you can just go ahead and fire off a meme coin launch pad based in the United States and let any insider fire off a meme coin and hold the whole supply? Are we talking about real products? How far does this go? Because we know if you get crypto people together in a room with no rules, you're going to get some pretty ugly stuff. Yeah, I guarantee we'll find out. Oh, we're going to find out.

There's definitely people who already watched that speech, like you said, and didn't consult a lawyer and already have plans to launch things that are going to blow our minds. The next topic here, Democratic signal support for bipartisan solution to market structure bill. Republican back bill to create a market structure for digital assets is expected to head for a vote in the Senate Banking Committee soon. Of course, you know, you can't get good bipartisan.

partisan news out a little on the flip side, probe into foreign crypto deals critical amid market structure talks, Democratic U.S. I said. So some Democrats on one side. Some Democrats still skeptical, obviously, still some vestiges of the Elizabeth Warren anti-crypto army. Well, the actual news was that the Democrats, this group of 12 Democrats, want to be more involved. They want to basically co-draft the legislation rather than just be party to it. I think that's a positive thing. You know, look, they're still squawking like we could potentially have market structure this year. If you are tracking this at home, all you should really care about, at least in the short term, is how strong the intention remains.

I think that right now, the broad sense is that we're in pretty good territory as relates to market structure bills. My guess is that a lot of what we'll be looking at from a crypto-lobying perspective is going to be some very specific things, i.e. backdoor defy bans, things like that, the type of stuff that we've seen over and over again sneak into legislation last minute. Look, I don't think that it was a predestined that this was actually going to move forward this fall. There's plenty of other considerations. So roughly, we're sort of like loosely neutral to bullish right now as relates to at least sort of the intent in Washington to get things done. Yeah, I agree.

Next story we have here, Tom Lee, but really about digital asset treasury companies. Tom Lee predicts Ethereum's price could reach 12,000 by end of 2020. He calls Ethereum a neutral chain that will be favored by Wall Street and the White House. Of course, this is talking his own book because Bitmine holds 2.15 million, ETH, making it the largest Ethereum treasury in the world. But $12,000 to $15,000 by the end of 2025 would be a pretty sizable move in the coming months. And I think this begs the question, how much bull talk can you do to keep pushing things if the market doesn't end up supporting it?

And what does that mean for digital asset treasury companies moving forward? because it feels like that 1.0 has seen a lot of the shine come off. Yeah, I mean, I think that it's fair to say that there's a little bit of narrative exhaustion right now. And Tom Lee, God bless him, is out there trying to figure out exactly how many more pennies that can be picked up, you know, before that narrative gets completely exhausted. And it's a good bellwether for that point. Look, I think that the other interesting piece of this is that there is no asset in crypto that has had a more prominent place, with more different narratives about what it's supposed to be, right?

World Computer, Defy chain, I mean, you name it, right? Internet of value. Yes, Internet of value. Ultrasound money. We had that one for a while. I was like, can't forget ultrasound money. That's the best because that's what Ethereum was built to be. And the interesting thing is that for me, it seemed like the place that it had with Wall

Street was always going to be Bitcoin's the store of value, you know, digital gold thing, Ethereum's everything else in crypto, right? you can kind of use it as a bundle for everything else. Tom Lee is definitely trying to own and push an Ethereum narrative that is about its sort of defy aspects, right? It's use as a financial technology. We even have Vitalik coming in with a blog from left field, basically getting down with the financialization kind of use cases and sort of saying that, yeah, maybe I don't think

those are important still, but we need ways to fund the important stuff. And so if all of these financial use cases allow us to go do things that don't have to have business models, maybe that's valuable. So it feels to me like on the one hand, narrative exhaustion with the treasury companies, but perhaps an Ethereum community alignment. I use that word very, very loosely, but some commonality of purpose when it comes to telling Wall Street a story that, yes, this is a chain that is open for financial business and is excited to work with them. Yeah, the Vitalik blog is interesting because obviously he's driven the narrative for Ethereum and those multiple narratives to some degree for so many years. And he kind of got in line behind Tom Lee and said, this thing's working. Let's not rock the boat. Let's do what Tom Lee is doing. Right. This is the narrative that's going to work for us and continue to push us forward. Smart.

Yeah. I mean, look, part of the Sailor playbook is recognizing that when it comes to certain aspects of the market, sailors are more effective communicator than anyone else we've had. And simple is better. 100%. Tom Lee, this is the stable coin chain. That was his first narrative for why Ethereum was going to go up. Anyone who knows no stable coins are everywhere, they're a commodity. There's going to be a billion of them on every chain.

But Circle went public. Everyone wanted access to stable coins. Tom Lee was smart enough to push the narrative that Heath would accrue all the value from stable coin adoption. Yeah. I mean, also a recognition that it's got to compete for narrative place with Solana, with XRP, with everything else that's about to be fast-tracked because of innovation exemptions for ETFs, you know?

Exactly. Okay, well, we have a fine, that was the five, but we have breaking news that I honestly, I think could be the entire Friday five, all five. Like Vanguard to allow access to crypto ETFs on its brokerage platform, not just broken by me. Here's an article on it on Trading View. Vanguard literally, repeatedly said the word, never, no chance, not going to happen. The world could literally explode in a ball of fire.

and you still won't be able to buy crypto ETFs. Here we are. Yeah, I mean, look, you know, I think if you want a Twitter meme, this is the, and then you win phase, right? They were the loudest, most vociferous, you know, antagonists were never going to do it. And the market appears to have driven them to change their stake, as markets tend to do.

When you first shared this, I went and looked, and the sourcing looked dubious to me, but then it was Eleanor Territ, who is sourcing it, you know, who I think at this point is sort of beyond reproach. So look, it appears that this might be a thing. And, you know, look, yes, it is valuable in the sense of all of these new people that potentially come online via Vanguard. I think that the signaling power initially is the big one. This is one of the last big holdouts in Tradfi to the ascension of the crypto infiltration of the mainstream economy.

And so, like you said, it's the, and then you win phase. Crazy. This one I was not sold would ever come around. I thought they might just remain on the sidelines literally forever. Maybe there's the greatest top signal of all time, and I'm just not seeing it. Money companies like money at the end of the day. And when people with money tell the money company that they want to spend their money on a thing that they don't have, the money company can only say no for so long.

Yeah, I'm just like I'm dancing on the line of being really happy that they came around and wanting to give some credit and just wanting to indefinitely dunk on them for their best. decisions. I don't really. Oh, no. Full dunk. Definitely. Full dunk.

Yeah. Because I guarantee you there are a whole set of people inside that company who were telling their leaders and leadership structures that they were insane to make those decisions and even more insane to make such big bold proclamations that created, you know, narrative headwinds for them later on and PR headwinds. And those people are also dunking right now and hopefully getting promoted. Yeah. All right.

Well, that is all we've got today on the Friday. I feel like we nailed it. Pretty good, pretty good. You guys can check out the breakdown and NLW, obviously, on all of his channels. He goes way deeper into most of these topics and others throughout the week and AI as well. I've said it before. I'll say it against the only podcast I listen to every day. I listen to like one all in podcast every two months just to trigger me slightly.

And I listen to the breakdown. That's it. It's all I got. Awesome. All right, guys. It's been a pleasure. We will definitely see you next Friday for the Friday 5 and I'll be back on Monday for Macromonday. See you guys soon.

Bye. Later off.