The Breakdown - Making America the"Undisputed Bitcoin Superpower and Crypto Capital of the World”

Episode Date: March 22, 2025

A sitting US president appeared at a crypto conference for the first time yesterday as President Trump popped in on Blockworks' DAS yesterday to reaffirm his administration's commitment to US crypto superiority. 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 Friday, March 21st, and today we are talking big acquisitions, bigger appearances, and much, much more. Before we get into that, however, if you're 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, Scott is on vacation this week, so there is no Friday 5. Kinda works out for us, though, because there was a lot going on over the last couple of days that is very useful to dig into, starting with the fact that yesterday, President Trump made

his first appearance at a crypto conference since inauguration, appearing via video at Blockworks Digital Asset Summit in New York. Trump declared that the United States is going to dominate crypto and the next generation of financial technologies. It's not going to be easy, but we're way ahead. He ran through the administration's actions to date, mentioning the White House Crypto Summit, signing the executive order creating the strategic Bitcoin Reserve, and, quote, ending the last administration's regulatory war on crypto, including stopping the lawless Operation Chokepoint 2.0. Trump elaborated that Operation Chokepoint went far beyond regulation, claiming it was a, quote, form of lawfare through government weaponization. Frankly, it was a disgrace.

Trump reiterated that he has called on Congress to create common sense rules for stable coins and crypto market structure. He said, it's so big, I think as big as you can get. Pioneers like you will be able to improve our banking and payment system and promote greater privacy, safety, security, and wealth for American consumers and businesses alike. You will unleash an explosion of economic growth, and with dollar-backed stable coins, you'll help expand the dominance of the U.S. dollar for many years to come. It will be at the top, and that's where we want to keep it.

Winding up, Trump declared, I can already see that the energy and passion of the crypto community is the kind of spirit that built our country. It's exciting to watch as you invent the future of finance right here in the good old USA. together we will make America the undisputed Bitcoin superpower and the crypto capital of the world. Blockworks co-founder Jason Yanowitz tweeted, When we started Blockworks, we could barely get someone from a bank to attend an event. Now we have a sitting U.S. president addressing 2,500 institutional participants. Incredible how far this industry has come.

A very positive speech and a historic moment for the industry, and yet the market sold off hard as the president declared the U.S. to be the undisputed Bitcoin superpower. Once again, crypto-Twitter had built unrealistic expectations about what would be said at the event. The previous day, news account said that there would be a, quote, major update on the crypto strategy. An account called Solid Intel even specifically claimed there would be an announcement of zero capital gains tax on crypto profits. Shockingly, Solid Intel on Twitter. Didn't have the solid intel. Bitcoin magazine CEO David Bailey commented, can we stop all this no tax on crypto whisper campaign? As far as I know, it's not real,

and you just keep setting the market up for disappointment. I don't think the administration is going to give crypto preferential treatment over other assets. They want to create a level playing field. Indeed, I don't think a major tax change like this is even possible by presidential decree. Others just asked for the weekly crypto news bombs from Trump to stop. Every single time these have been sell to news events and people are getting weary. Lady of Crypto tweeted, New Rule, Trump is never allowed to mention crypto again. Whenever he does, we dump. If you zoom out more than microscopically and stop focusing on whether the number is red or green in a one-hour chart, obviously these presidential statements continue to be important.

Crypto lawyer Gabriel Shapiro commented, amazing we went from being gaslit that chokepoint 2.0 is not even a real thing, to the U.S. president acknowledging it, stopping it, and calling it a disgrace. Huge props to Nick Carter for all his work on this. The chatter from the conference floor is also extremely positive. Tom Dunlavy, a partner at MV Global, reflected on the different vibes at the institutional focused event, commenting, after ETH Denver, it was hard not to question your conviction in crypto for the near term.

After DOS, I'm cold messaging everyone I know to start adding as much exposure as they comfortably can. institutional direct allocation is real, tangible, and happening very quickly. Jeff Parker Bitwise wrote, Pretty sure Blockworks has solidified New York City as the U.S. crypto capital over Miami and San Francisco, which like, of course, man. So all in all, a good day despite the markets. But let's get into some of these other big stories, starting with Cracken, who have agreed to acquire stock derivative trading platform Ninja Trader for $1.5 billion.

This is the largest crypto acquisition in history beating out Stripes' billion-dollar acquisition of stable coin payments company Bridge late last year. Ninja trading is a relatively modest competitor to Robin Hood, servicing around 2 million traders worldwide. The valuable part of the acquisition is the CFTC registration that Ninja Trading holds, along with their infrastructure for accessing equity futures and options. The merger will allow Cracken to bring registered derivatives trading in stocks and crypto to their U.S. users, while Cracken's derivatives licenses in the UK, Europe, and Australia will allow Ninja Trading to expand into those markets. The move unlocks Crackens' ability to pursue a multi-asset strategy in the coming years,

with co-CEO Argent Sethy stating, traditional markets run on 1950s banking systems, exchanges that close at 4 p.m. and settlement delays that take days to resolve. Crypto Rails fix these issues, operating with efficient and real-time infrastructure. But legacy finance and crypto have remained separate ecosystems until today. This transaction is the first step in our vision

of an institutional-grade trading platform where any asset can be traded any time. 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. You can buy your Bitcoin with Ledger and Ledger Live, and so much more. Basically, not only did they want to keep your assets secure, they want you to be able to do more with them. Ledger's newest devices, the Ledger Stacks and Ledger Flex introduced the world's first secure touchscreens, making it easier and safer to manage your transactions and assets. Alongside Ledger Stacks and Ledger Flex, the company also launched the Ledger's security key app, offering a safer alternative to traditional passwords and enhancing your digital security. If you are in this space, you owe it to yourself to at least check out Ledger

and their ecosystem what they have available to you. So thanks once again to Ledger for sponsoring the show. From here, we are going to start jumping around a lot. capturing a grab bag of end-of-the-week stories. A couple of updates from the SEC, Ripple CEO Brad Garlinghouse has said that the company has settled their legal battle with the SEC. On Wednesday, he tweeted, as many of you know, just over four years ago,

the United States SEC filed its lawsuit against Ripple. I'm finally able to announce that this case has ended. It's over. This is it, the moment we've been waiting for. The SEC will drop its appeal, a resounding victory for Ripple for crypto every way you look at it. The future is bright. Let's build.

As the SEC rushed to drop all of their crypto cases as fast as possible last month, to sum it had seemed odd that Ripple wasn't among the announcements. It was later reported that Ripple was pushing hard for the SEC to not only drop their appeal, but to vacate the initial district court ruling that prevented sales to institutional investors and levied a $125 million fine. Ripple was reportedly arguing that other crypto companies were seeing wholesale relief from the SEC, so they shouldn't be saddled with a unique restriction on token sales. Eleanor Tarritt of Fox Business is reporting that the initial ruling will still stand,

but Ripple has a right to continue with their own appeal. Essentially, the SEC is walking away from their side of the fight and saying, the ball is now in Ripple's court. Now, we won't know what the settlement actually says until the agreement is filed in court, but the nuances could have a large effect on token issuance in the U.S. The Ripple case was central to the Gensler SEC's theory that substantially all tokens were securities. The SEC lost on that central concept with the judge ruling that tokens themselves are not covered by securities law and could be sold into the open market by issuers.

However, the ruling found that direct token sales to institutional investors did fall within the SEC's jurisdiction and therefore required an exemption to be legally offered. Most crypto companies now offer token sales through an SEC exemption, but we've never had much in the way of guidance along those lines. This settlement could be a big opportunity for the SEC to do away with precedence from the Gensler era and clarify exactly what they expect from token issuers moving forward. Seems pretty unlikely that we go back to the Wild West of the ICO era, but a little more clarity would allow firms to know where they stand. In particular, this could validate the growing idea that token issuers no longer need to form a shell company in the Cayman Islands to get as far away from

the SEC as possible. Shudog, the General Counsel for Magic Eden, wrote, SEC dropping its appeal against Ripple is a major win for crypto. Ripple is one of the few SEC actions that actually set legal precedent that certain types of token sales are not securities transactions. By dropping the appeal, these decisions hold and provide important clarity for the industry. There's still uncertainty. For example, how secondary transactions are treated, but there's no denying that this is a major progression towards regulatory clarity in the U.S. in favor of the crypto industry. The SEC has also issued guidance for proof-of-work miners, placing them squarely outside of that agency's jurisdiction. In a statement released on Thursday,

the Division of Corporate Finance wrote that mining activities do not involve the sale of securities, adding, accordingly, it is the division's view that participants in mining activities do not need to register transactions with the commission under the Securities Act or fall within one of the Securities Act's exemptions from registration and connection with these mining activities. This wasn't really ever in question for Bitcoin miners, but could provide some relief for other proof-of-work tokens launched in the intervening years. More importantly, this develops the legal interpretations around crypto tokens in a clear and coherent manner, which makes it much more difficult for another administration to wind back the reforms that are currently underway.

Giving direct guidance on how the Howie test should be applied, the SEC added, a minor's sell for solo mining is not undertaken with a reasonable expectation of profits to be derived from the entrepreneurial or managerial efforts of others. Rather, a miner contributes its own computational resources, which secure the network and enable the miner to earn rewards issued by the network in accordance with its software protocol. The guidance also extended to mining pools explaining that merely pooling resources does not create an investment contract covered by securities law. These direct and clear statements from the regulator can be invaluable in future lawsuits if the political climate shifts again. Even during the Gensler term, we saw

how Ripple was able to rely on guidance from the Hinden speech to partially defend themselves in court. And after the past few years, more clarity for Bitcoin miners is always welcome. Cody Carbone, the president of the Digital Chamber, wrote, Huge for Bitcoin miners. The SEC just clarified that proof-of-work mining does not involve the offer or sale of securities. This gives much-needed legal certainty and clears the path for the mining industry to grow in the U.S. Fun random little comparison, Tether was the seventh largest buyer of U.S. treasuries last year compared to nation states. According to CEO Palo Arduino, the stablecoin issuer bought more treasuries than Canada,

Taiwan, Taiwan, Mexico, South Korea, and Germany. Most of the higher-ranked nations are offshore money centers that serve as proxies for hedge fund volume, places like the Cayman Islands, Luxembourg, Belgium, Singapore, and the UK. Tether claimed purchases of $33 billion in 2024, around a quarter of the first-ranked Cayman Islands. Palo's chart also highlighted that Japan and China were big sellers of treasuries last year, around $50 billion each. Influencer Coop Daniels commented, look no further than this chart to discover why the U.S. performed a 180 on crypto. Demand is drying up for treasuries. China is dumping, Tether is buying. Luke Groman suggested this is a pretty timely reminder for U.S. policymakers, tweeting,

Important context coming just one day after the Fed took actions that were, in essence, a nod to increasing aggregate investor balance sheet capacity to buy USTs. In my opinion, the bigger Bitcoin gets in market cap, the higher this will likely go. Another bit of at least half-tees at news, signs of a slow recovery are beginning to emerge with demand returning to the Bitcoin ETFs. The U.S. products have now registered five positive inflow days in a row. The numbers are definitely not spectacular, with only three of the five days above $100 million, but that is a whole lot better than the persistent outflows we've seen over previous weeks.

Monday's high water mark of $275 million was the strongest inflow day in six weeks. Rachel Lucas, a crypto analyst at BTC markets, suggested we're seeing a little bit of quarter-end rebalancing from institutions, getting back up to size after a turbulent march. It's still very tenuous, but that could be a sign that the bottom is in. Stephen Lubka, the head of private clients at Swan, noted that we still have a lot of positive catalysts ahead, tweeting, Merrill Lynch as of today will now allow clients to buy the Bitcoin ETFs if you have over a million dollars. We're still not even halfway in the Bitcoin an ETF adoption curve. So friends, once again another week where I think the headlines

belie how good it actually is underneath. I sound like a broken record, but despite all of the turbulence and turmoil, the trend lines are clear and they are up and to the right. For now that that is going to do it for today's breakdown, appreciate you listening as always, and until next time, be safe and take care of each other. Peace.