The Breakdown - Ignore the Whiners: The White House Crypto Summit WAS a Big deal

Episode Date: March 12, 2025

The White House held its first Crypto Summit last week. While some people are complaining that it was a nothingburger, NLW argues that they're missing the point. Sponsored by: Ledger Ledger, the world leader in digital asset security, proudly sponsors The Breakdown podcast. Celebrating 10 years of protecting over 20% of the world’s crypto, Ledger ensures the security of your assets. For the best self-custody solution in the space, buy a LEDGER™ device and secure your crypto today. Buy now on Ledger.com. 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 Monday, March 10th, and we have so much to catch up on the Crypto Summit, BSR commentary, all of that good stuff from the end of last week and the weekend. But before we get into all of that, 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. All right, friends, well, as you well know, the White House held their first crypto summit on Friday, assembling industry leaders from across the world to discuss U.S. crypto policy. The event kicked off with a rather baffling live stream.

President Trump opened the event, then immediately pivoted to discussing the World Cup, complete with an unveiling of the trophy. Once the soccer portion of the meeting was over, Trump reiterated his pledge to, quote, Make America the Bitcoin superpower of the world and the crypto capital of the planet. Trump put the Bitcoin's strategic reserve front and center in his strategy, stating that the U.S. government would now, quote, follow the rule that every bitcoins or knows, never sell your Bitcoin. Cryptozar David Sachs commented that the administration is, quote, moving at tech speed.

And frankly, to be expected, substantive policy discussion was pretty thin. Treasury Secretary Scott Besson said the Bitcoin Reserve was a key part of a strategy to, quote, augment the asset side of the United States balance sheet. He acknowledged that regulations had been weaponized against the industry, pledging to unwind measures taken by the Biden administration. This is good because actually at this point, we haven't really heard very much about what the Treasury is going to do, even as the SEC races, for example, to clean up their side of the House. Finally, Besson commented, we're going to keep the U.S. dollar the dominant reserve currency in the world, and we're going to use stable coins to do

that. In other words, the Treasury Secretary of the United States is now repeating what many of us have been saying in the crypto industry for years, that stable coins are the single greatest thing to happen to the U.S. dollar this generation. The floor was then given to the Winklevost, twins, where the Gemini co-CEOs mentioned how much of a change has already taken place under the new White House. Tyler Winkelvoss had previously stated that he was more likely to end up in jail than in the White House in that previous era, and added, the U.S. won the Internet and the U.S. should win crypto. And that was about it. Around five minutes on the World Cup, 15 minutes of unsubstantial statements on crypto, cool though they may have been, then media was ushered out

of the room. Unchained founder Laura Shen tweeted, all the reporters watching the live stream are now like, WTF, what are we right? Still, while nothing much happened during the public-facing portion of the event, attendees said that the closed-door meeting was fruitful. Sergei Nazarov, the co-founder of Chainlink, said that the discussion covered Bitcoin mining, federal crypto reserves, and ensuring the next generation of the financial system is centered on the U.S. He commented, the president spoke both publicly and privately about his interest in the industry and made it clear that the attacks on crypto from past administrations are over. He also talked about rolling back laws and directives that hampered progress for the industry and outlined his goal to make

the U.S. the global leader in the space. Now you might recall that heading into the summit, much of the speculation was around the invite list, and whether we were going to be able to draw any inferences from who had been excluded. Ripple CEO Brad Garlinghouse was in attendance, so maybe squash those rumors that he had fallen out with the administration, but for sure, the most surprising attendee was Tether CEO, Paulo Arduino. Many have assumed that Paulo would never set foot of the U.S. ever again, but he showed up in person at the invitation of the White House. He also attended the CFTC's roundtable. Held on the same day, that meeting discussed a pilot program to allow stable coins and other digital assets to be used as collateral on CFTC regulated

exchanges. So, what was the mood on crypto Twitter? Excitement? That the president is following through on his promises and bringing crypto leaders to the White House? Or that, you know, we're getting a Bitcoin strategic reserve and even holding altcoins? Nah, the general mood on crypto Twitter was that this event was a massive flop. It was a sell-the-news event for markets, and there was clear frustration from the lack of a catalyst to push markets higher. Many even criticized industry figures for excessively praising Trump. And honestly, at this point, guys, I don't know what to tell you. If Trump literally set up a Bitcoin miner in the Oval Office, this industry would somehow find a way to be disappointed by it. I don't know if you've never been paying attention, but White House talkie sessions like this

are nothing burgers. They are just formalizations of things that happen elsewhere. They're grip and grins that build relationships that can be called upon later. They're all about symbolic meaning. and indeed many people tried to make that point. Kyle Simani of Multi-Coyant Capital wrote, A historic moment for the industry, we used to fight to stay alive. Now we forged the path to lead the world in crypto. Making the unbelievably obvious but apparently still necessary point,

Scott Melker wrote, Zoom out. What happened at the White House Crypto Summit matters less than the fact that it even happened. Just a few months ago, the idea of a sitting US president hosting industry leaders to discuss crypto was unthinkable. This is a seismic shift.

The game has changed. Now, of course, all of this was wrapped up, with the industry digesting the news of a Bitcoin strategic reserve. Yet another area where I've been incredibly impressed by our ability to be underwhelmed. Many apparently were disappointed that the government wouldn't be buying their bags. Even though this version of the reserve was A, always the most likely starting point, and B, frankly has a lot to recommend it, given all the incredible acrimony and changes to long-held norms and fights in Congress, that other versions might have created. Alas, Caprioil investments founder Charles Edwards, summed up many people's thoughts when

he said, this is the most underwhelming and disappointing outcome we could have expected for this week, but also not surprising. Looks like no tangible BSR in 2025. No active buying means this is just a fancy title for Bitcoin holdings that already existed within the government. This is a pig and lipstick. Should be noted, though, that the executive order did instruct cabinet members to explore, quote, budget neutral ways of accumulating more Bitcoin. Some have written that notion off, but standard chartered analyst Jeff Kendrick is taking it seriously. He discussed the possible avenues, including revaluing the nation's gold and drawing down from the Treasury's $39 billion exchange stabilization fund. Finally, he wondered whether Senator Lummis' proposal to buy $200,000

Bitcoin per year could be structured to fit into this vision of a budget-neutral Bitcoin reserve. Summing up, Kendrick said, in reality, I cannot see any of these three solutions being delivered today. Rather, they would all require Treasury Secretary Bessent to propose something. Alex Thorne, the head of research at Galaxy Digital, added another half a dozen suggestions, ranging from repurposing revenue from Fannie and Freddie to openly courting donations from Bitcoiners. The government's current Bitcoin holdings are only around $18 billion, and half of that is likely to be returned to BitFinex. And given that we're operating on a multi-trillion dollar budget, it's not beyond the realm of possibility that they might come up with some clever way

to redeploy a couple hundred million dollars. Still, obviously, that is not happening in the short-term, and markets are clearly just looking for the next short-term catalyst. Hello, friends. I am thrilled to share that Ledger is once again partnering and sponsoring with the breakdown. Many of you know, but for those of you who don't, Ledger is the most secure hardware wallet for your crypto and logins. It's trusted by 7 million users and secures 20% of the world's digital assets. What's more, Ledger is a lot more than wallets. Over the recent years, they've built a comprehensive ecosystem of products and services, all of which are designed to make digital ownership more secure and accessible.

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So thanks once again to Ledger for sponsoring the show. The Bitcoin Policy Institute's Matthew Pines has been thinking about the strategic reserve as a geopolitical weapon. He commented, First, we give China a headfake that will re-center gold as a monetary medal in a gilded Breton Woods reordering. Then we revalue the gold certificates and use these proceeds to fund strategic investment in a harder asset, Bitcoin. Then we sell the gold outright and rug China. Fun to speculate on, even if a pretty unlikely outcome. So given that everyone's upset about the short term, let's circle back to what is likely over the short term. Crypto-Zar David

Sacks is walking back the discussion of various altcoins being included in the government plans. Speaking with Bloomberg on Friday, he said, well, the president just mentioned the top five cryptocurrencies by market cap, so I think people are reading into this a little bit too much. He just mentioned the top five. While he believes the government owns various altcoins, Sacks has so far been unable to come up with a definitive accounting. Altcoins did manage to carve out space in the executive order as a separate digital asset stockpile, but going from these comments, it seems unlikely much more will come of it. It is also worth noting that the executive order provides no mechanism for the government to buy more all coins. Bringing some rationale by looking at the overall picture,

Blockstream CEO Adam Back commented, people are undervaluing the U.S. Strategic Bitcoin Reserve announcement. It is huge for moving the Overton window. The actual U.S. government promoting Bitcoin, provides the new ultimate reference for sovereign wealth funds, pension funds, mutual funds to add Bitcoin allocations. Now, to be fair to the people that I'm kind of ragging on right now about their inability to find joy. Part of the reason that sentiment is so negative about the SBR and the Crypto Summit is that markets are, of course, in a pretty brutal drawdown. Price action has been down only since Friday, with Bitcoin touching 80,000 on Sunday night, and going all the way down to 78,000 at the time of recording. That's a 25% drawdown from

the all-time highs, not unusual for highly volatile Bitcoin markets, but far from the expectation when the first crypto president was inaugurated. This is also our second trip to the lows in the past two weeks, so the mood is starting to sour even more. Teddy Kleps wrote, It's a very unusual moment in crypto. Governments across the globe buying Bitcoin and announcing strategic crypto reserves, institutions buying nonstop, and overall all-time high awareness. Yet the sentiment is the same as peak bear market. So what is the explanation? Well, quite clearly one has to take a glance at what's going on outside the crypto bubble. For the past few weeks, a narrative, a very compelling one, frankly, has been building that Trump

doesn't care about the stock market this time around. Speaking with Fox News on Sunday, he can first this idea, stating, there could be a little disruption. You can't really watch the stock market. If you look at China, they have a 100-year perspective. We go quarter by quarter. What we're doing is building a foundation for the future. Geiger Capital tweeted, Trump 2.0 is very different. He's vulgaring himself. Trump's comments came as part of a broader discussion about a looming recession due to a tariff-induced slowdown in trade. When asked if he's expecting a recession this year, Trump said, I hate to predict things like that. There's a period of transition because what we're doing is very big. We're bringing wealth back to America. That's a big thing. And there are always periods of

transition. It takes a little time. Now, after that, you saw a lot of headlines like Trump won't rule out a recession, which, yes, technically is true, but clearly not really what he was trying to say. Indeed, the comments apparently needed a bit of cleanup with Commerce Secretary Howard Lutnik appearing on NBC later on Sunday to say, there's going to be no recession in America. Global tariffs are going to come down because President Trump has said, you want to charge us 100%. We're going to charge you 100%. Lutnik's argument was that the tariffs would unleash economic growth, adding, so if Donald Trump is bringing growth to America, I would never bet on recession, no chance. So if you had to ask me, whether the recent price action is the market rejecting the Bitcoin

Reserve and other crypto policies, or Bitcoin instead acting as a long-tail risk asset and selling off hard on recession fears, pretty clear to me which of those two it is. And as one final story, just to keep our heads on straight around where we actually are, let's turn to what Nick Carter called the biggest news of the day on Friday, which, by the way, included the BSR and the Crypto Summit. Another pillar of Operation Choke Point 2.0 has fallen with the Office of the Comptroller of the currency reversing prior guidance to the banking sector. In an interpretive letter published on Friday, the OCC wrote, Crypto asset custody, certain stablecoin activities, and participation in independent node verification networks, such as distributed ledger, are permissible for national

banks and federal savings associations. The statement explicitly removed the previous policy, which required banks to seek permission from their regulator before engaging in crypto activity. As we know from Coinbase's Freedom of Information request, this permission had been rejected in every single case. Acting comptroller of the currency, Rodney Hood, impressed that strong risk management controls are still required, but crypto activity will no longer have separate and discriminatory guidance. He commented, today's action will reduce the burden on banks to engage in crypto-related activities and ensure that these bank activities are treated consistently by the OCC, regardless of the underlying technology. We've already seen the Fed and the

FDIC wind back their policy statements about chokepoint, this announcement could be even more impactful. Of the three major bank regulators, the OCC has the most granular control over operations. It's in charge of things like issuing bank charters and day-to-day supervision. In contrast, the FDIC and the Fed have a bigger picture role related to financial stability and confidence in the banking system. Without the OCC rolling back their guidance, there was still no way for most banks to take the plunge and start offering crypto products. Coinbase CEO Brian Armstrong commented, great leadership from the OCC and acting Comptroller Hood

for taking much-needed action to rescind harmful rules, which make it difficult for the digital assets industry to access financial services. Let's make the U.S. the crypto capital of the world. Alexander Greve, the VP of Government Affairs at Paradigm put it more crisply, tweeting, goodbye Operation chokepoint 2.0. Anyways, guys, I don't know what to tell you. Bitcoin may be down below 80,000,

but when you narrow in on our industry, it is a never-ending storm of good news right now. So, as we always said during the bear market, go touch some of that spring grass that's now finally starting to come up, come back in a little bit when all this tariff stuff is settled. That's going to do for today's breakdown. Appreciate you listening, as always. And until next time, be safe and take care of each other.

Peace.