The Breakdown - The Five Most Important Stories in Bitcoin Last Week

Episode Date: June 2, 2025

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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, May 30th, and today we are catching up on all of the most important stories in 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 in the show notes or go to bit.ly slash breakdown pod. Well, friends, we are back here with another episode of the Friday 5 with me and Scott Melker. Today we are catching up on everything that happened at the Bitcoin conference this week, as well as discussing one of the big emerging themes of this cycle,

which is whether all of these Bitcoin treasury companies are a good thing. We've got some bubble prognostications coming, and so I'm excited for you to dig into this conversation, so without any further ado, let's dive in. I have a rule that I will only stay in Vegas for one night. I broke that rule. I stayed for three nights. Most people were staying for four to seven nights,

and they are all absolutely insane because Vegas is nuts. You could not have chosen a crazier place to have a Bitcoin conference. You weren't there, were you? No, no, no, no, no. I have done my tours of duty at those. But it looked good from afar. It was. And it's strange.

Just the iron. of it, and I said this on a recording that we put out, but having a Bitcoin conference where everybody's telling you, never sell, hold forever, low time preference, think about your children, 50 feet from a casino where the same people go out and start rolling dice and playing stupid games like I did called Double Down Blackjack. I don't even know what it is, but, you know, we played. And the irony is just so thick. Yeah. Yeah. I love it. Don't waste your money. Go to the casino on the way out of the conference.

allocate a very specific portion of your money to waste is another way to come out of this. Your entertainment budget for the Bitcoin Conference, I guess if you're not going to Club 11 in Miami, it's- That's what I was going to say is if your worst transgression in Vegas was staying at the double-down blackjack table just a little too long, you probably escaped okay. This game is absolutely absurd, though, but I won't get into it. But it was a good time. Anyways, let's talk about the Bitcoin conference. I think, obviously, the biggest story there was J.D. Vance.

speaking, right? Regardless of what he said, the fact that he spoke, I think, was the real key. But he says the U.S. should use Bitcoin as an advantage in rivalry with China. Crypto finally has a champion in the White House during the Bitcoin conference speech. You know, I'm not sure if everybody heard it, but J.D. Vance spoke and people were very excited about his words. To me, it felt a little bit like he just kind of took the best, most viral parts of Trump speech from last year and borrowed them. Like he said, we're going to fire Gary Gensler. people like Gary Gensler. If you remember last year, Trump said it twice because it was so popular.

But very clear that J.D. Vance gets it. And it was, I think, a big signal that he was willing to show up and give this speech. Yeah. I mean, I think to me it read a little bit like, you know, certainly there's the administration line that is reinforcing, and that's a part of it. But, you know, J.D. Vance was interested in Bitcoin before it became sort of part of the Trump administration agenda. And it felt to me like he was positioning himself as not just sort of a transactional friend, but actually interested in this. He took a very populist tone with it.

You know, it was Bitcoin as a tool against the elites and power and all those sort of things. He basically said it was a hedge against transgressions of power no matter who's in office, you know, which is at least lip service to the idea that it's not sort of a partisan thing. So, you know, I think that the tonality was a little bit different and less transactional, perhaps, than some political speeches what we've seen. And also, I think sort of on a personal level, you know, he was also calling on this community to continue to stay engaged. It was sort of a not so subtle political rallying sort of speech as well,

basically saying we continue to not be able to ignore politics because politics is not going to ignore this industry. Did you have any other huge takeaways from the conference from what you saw? Obviously, both Trump brothers spoke, as I alluded to before, you know, Bitcoin's going to the moon. they kind of reiterated the same points. That was all great. But man, the lineup was absolutely insane.

So there really were a lot of key moments. I think that what so interestingly, I was at a TD securities like conference in New York yesterday speaking. And we were talking a little bit about crypto and crypto being back and or everyone's presumption was, or Bitcoin at least is back. And I think that the Bitcoin event having some. sort of big headline presence was very reminiscent or reflective of where we are. This cycle really is a Bitcoin cycle so far.

Doesn't mean that it'll stay that way forever. There's certainly sort of themes that are emerging. Stable coins are obviously a big theme. You know, we constantly talk about what are the narratives there are. But the fact that there was so much energy and attention anchored at the Bitcoin conference, even though there are discussions of other things, I think, is notable, right? That's where the energy is right now is sort of the mainstreaming of this particular particular asset. I will say one thing that's not all that encouraging if you're sort of in the

industry is like David Sacks gave us absolutely squat nothing in terms of new ideas, new policies moving forward. I mean, I think some people were hoping that we'd get some sort of interesting update on the BSR, given that we've had deadlines from those executive orders pass. And there was just stone nothing around that other than sort of some lip service to the idea that it's still a relevant thing. We don't even have an audit on the United States government's Bitcoin holdings. Yeah. Yeah. So not a little less encouraging. Yeah. My biggest takeaway is I think from being at the conference, obviously, anecdotally is, you know, if you went to Bitcoin Miami in 2021, it was like the crypto trading degenerates partying at clubs. And it was like being at Coachella. You were there.

It was at the Miami Convention Center. It was absolute insanity. This time, it was. was a lot of suits in a good way. And everyone I spoke to was like my age or older. This was not at all young people. This was family men with their kids and their wives. And it was just, we've grown up. And to me, like, regardless of what was said on stage, that was really kind of the single and the most noticeable takeaway that I had. Interesting. Yeah. No, I mean, that that reflects sort of the substance of stuff that was coming out from the outside, you know. But look, you know, I think it'll be interesting to compare and contrast. We've got another massive event in permission lists, you know, just by sheer numbers coming up at the end of this

month. So, you know, and my presumption would be that that will be a little more slanted, more sort of diverse sets of crypto folks, not just Bitcoin. They're pretty self-consciously trying to have it be a bigger tent. So, you know, it'll be interesting to see how those themes, Is it that same crowd just in a different location or does another part of the industry show up for that? I think it'll be somewhere in between, but I think because you're allowed to say things about all coins at permissionless, it'll probably have a bit of a different audience, right? I mean, this is really kind of Bitcoin only focused. Even if you remember in 2021, as much the joke was always that you could say Bitcoin on stage, you couldn't ever say Ethereum on stage, but you could go like and look at a booth for an NFT project on the, on the, mentioned floor, now it's Bitcoin miners and Bitcoin companies down there and much more serious.

There really isn't just, you know, no mascots running around and none of the kind of hype and strange things. It really felt more like a Tradfine conference to some degree in that way. Interesting. Yep. Yeah, it was great. So obviously one of the bigger things that happened during this week while everyone was at the conference, Trump media had raised $2.5 billion to invest in Bitcoin.

This was kind of interesting because it was reported they were raising $3 billion. dollars and then trump came out and said you know they're idiots and the people they listen to are even dumber right and it wasn't true and then of course day later it was 2.5 billion to invest in bitcoin so i guess it was just leaked a little too early and i guess along those same lines you know game stop stock price continues sinking but they bought 512 million versus bitcoin that was announced there was actually quite a few of these that went unnoticed i think one huge one that nobody's talking about not a company Pakistan to have a strategic Bitcoin reserve, right? So I guess all of this in the frame of a lot of people, a lot of institutions, a lot of sovereigns actively buying Bitcoin, and then the focus on

Trump and the Democrats obviously pushing back against his involvement in the industry, as you can see here, how Donald Trump's crypto dealing to push the bounds of corruption. So I guess we can start with the Trump organization buying Bitcoin and then talk about the implications of that and then just casually, you know, have a conversation about companies buying Bitcoin in general. Well, one, you know, the sailorification of everything is sort of clearly a big, dominant theme. We talked about it, I think, either last week or the week before, you're getting a louder set of people asking questions around how good it is. I think one of the things that's interesting is a lot of the sort of layer one analysis

of how it could all go wrong, especially if it looks at micro strategy, tends to sort of come up short, right, because Sailor's very smart and good at this, and he's structured his debt really well. And so it's unlikely that he's got to sort of face crushing liquidity cascades and things like that. However, I've seen a number of people point out this week that while we don't know exactly the terms of all these deals, it's almost for sure that they're not getting the type of terms that Sailor is getting, right? They're not able to control this in the same way. And so, you know, it is new risk being piled into this system. So that's a growing, I don't know if there's anything to say about it other than just I have a lot to say about it, but yeah

finish. I'm gonna let you finish. No, but I think I think that's that's that is so sort of like, you know, a big part of the theme outside of the Trump. Let's let's pause there and talk about it for a minute. My biggest takeaway outside of what I saw at the conference and I wanted to save it for this part is that we now know exactly what the next bubble is and exactly how we're going to completely f*** this up in this cycle. And it is Bitcoin treasury companies. there's 99% certainty in my mind that that's the case. It is insane. Within four hours of being at the conference floor, I was pitched literally 25 of these. And I saw the terms that people have gotten to participate in these. And this is the ICO coin cycle of the past repeated on public markets with tradable stocks. And it's absolutely going to blow up. It has to. I'm not saying micro strategy will blow up. I'm not saying Nakamoto or any of the responsible ones now will blow up. But I'm saying exactly what you are, is that the terms are going to get worse and worse. They're going to

push just like the Voyagers and the Celsius's and the block vies of the past. Oh, you got 7% yield. We need to give our customers 8% yield. Oh, your note has 8% yield. We need to do 10% yield. And then Bitcoin's going to drop and they're going to start having to sell this off. And it's going to cause a liquidation cascade tail as old as time. I had one person who I love and respect and these people are all going to make a ton of money on it. Pitch me six of these. Six. they were in six personally within a week, right? And so, you know, people who have participated in these, most of the early investors are already up 2530x on their investments. And you got to remember, this isn't like ICOs of the past, to some degree you would get, you know, you invest and

you'd get slowly over time. Like a lot of these guys, this is a reverse merger with a company that's already publicly traded and they're sitting on the stock. And listen, for better or for worse, if you had the opportunity, you would take those bets because it's great. great, but there's no way that this doesn't unwind horribly at some point in this cycle. Yeah, well, it's interesting because you also have people like Adam Beck saying that Bitcoin can absorb a hundred trillion of this to ban. So it's like even a lot of the Bitcoin champions are also encouraging it as it stands. Now, that said, there's also a lot of, let's call it a diversity of opinion here, right? This is not a sort of universal, everyone's cheering for it with Bitcoin.

There are a lot of questions, but, you know, animal spirits take over and the questions get drowned out. Yeah, I mean, I actually, we posted like a random live macro Monday yesterday on this channel. And we didn't have McClone, but we had James Lavish and Dave Weisberg. And I asked them flat to their face. Like, what do you think of this? Because I know James runs is a partner in the Bitcoin Opportunity Fund. And I knew for a fact that they're participating in a lot of this, right? And he said, listen, we're going to leave a ton of money on the table. Like the minute that they're too overvalued, we're selling them. But this is the opportunity right now. We have a fiduciary duty to take advantage of it. We have access, but shared the same concerns long term. So even the people who are

participating to some degree very responsibly know that there's going to be a time when the music stops with these things. My biggest concern, you're going to get a hundred of these at the top, right? Like if Bitcoin is going to be at 150 or 175, I want to make it clear. I don't think that like this bubble pops today at 105. But, you know, as the FOMO goes up and people realize there's not the same kind of money to be made in alt coins and Vs. and that narrative is kind of passing. This is going to be the new version of that. I definitely learned that a lot of people

who purport themselves to be Bitcoin maximalists all made their money in those ICOs and coins quietly. And this is a new way to do that. But there will be a time when, you know, 100 hedge funds come in at the top and try to do this or, you know, they'll say their treasury companies, but really LARPing and will be like hedge funds.

And they're going to structurally do it, wrong. They're going to have some idiot running it and they're going to have to sell a ton of Bitcoin. I asked Jack Waller's about it too, actually, and he was like, good. He was like, because we'll be the responsible ones. We're buying Bitcoin at a 50% discount. So even those who are bullish on these, they think there'll be a big drawdown to buy and it'll be yet another weak hands to strong hands transfer. But I'm concerned. Yeah. Put that firmly in the category of things that we are now actively watching and checking it on week over week, I think, at this point. I mean, we have officially hit the point where there's too many of these announced or sort of, you know,

who have made buys to really capture them all. Even with the daily show, I'm finding it like they're, I'm watching them roll off the list of things that I actually cover, you know? Yeah. Well, I'm definitely here for any company that would rather be holding Bitcoin than cash. Beyond that, if you're financially engineering a way to get more Bitcoin, it's somewhat a replication of stock buybacks and all the issues that we've seen in the traditional financial system. But you know what? If they can secure the bag and not kill the market somehow, I'm here for it. One of the things that our function is with the financial system is to push the boundaries

far enough to figure out where the fault lines are. So here we go again. Let's quickly, before we move on to the next topic, I don't want to miss the Trump organization's participation here, raising $2.5 billion to buy Bitcoin. and then, of course, the criticism from the Democrat side and others. Yeah, I mean, look, I think that the challenge here is, I think that I absolutely take them at face value when they say they're true believers. That was a big part of Don Jr. and Eric's speech this week was just confirming that this is not,

you know, they're all in on this. They have been for a while, but it's very clear. This is sort of a natural thing for them to do. This isn't surprising at all. In fact, this is exactly the type of kind of financial engineering that, you know, these organizations tend to like. So that doesn't surprise me at all. They're in a position to do it, you know. I think it does add fuel to the fire, obviously for Dems, as everything will.

But I think that the meme coin is where a lot of the focus is right now from Democrats. You know, you're seeing, I'm noticing a lot more connecting the dots between meme coin. purchases and pardons and, you know, maybe it's just the occasion of this dinner that they had, you know, a week ago or whatever it was. But I'm seeing that start to pop up on, you know, Instagram stories from Normie friends who aren't, you know, connected to crypto at all. And it feels like that's where sort of like the story's hitting the mainstream a little bit. Yeah, we talked about Saylor, obviously, I think, consensus is that Saylor's safe. But that doesn't keep him safe from criticism because he had a big one this week.

Michael Saylor calls on-chain proof of reserves a bad idea, rules it out for strategy over security concerns. This was all while we were at the conference. I didn't get to dig too deeply into it. I did see, I believe, that Arkham actually went ahead and found and docks the addresses anyways, but big head scratcher for a lot that Saylor was not willing to be transparent about their proof of reserves and their wallet addresses. Look, I like Saylor, but every six months or so, he reminds you that he doesn't give a fuck about like the community. He can talk the game all he wants. He is here for a specific purpose. He's a absolute mercenary. And he's not going to play by crypto community rules just because they're norms. Like he's going to do exactly what

is good for him. And again, literally every six months, there's some new thing where he says something that's completely out of sync with what sort of Bitcoiners believe. And they have to sort of pause and re-evaluate. And then where they always get is like, you know, whatever is we don't, we don't require, usually what has happened is that people realize that they don't require 100%, you know, alignment with with someone to sort of still consider them on the same team. But, you know, for a lot of people, this is a big one. And the logic I don't think is super resonating with people, you know, it's especially when you have like, you know, Bitwise, who's ETF, they've been able to sort of, you know, share this type of information without it being a big concern and stuff.

There's just enough counter examples that it just doesn't super hold muster. But, you know, it's, I can't imagine that this won't blow over, you know, Sailor's going to do it. Yeah. I get that everybody's upset about it. And like I said, I didn't really pay much attention. This was one of those less signal than noise situations. But do people really believe that because he's not sharing them that there's some sort of fraud

and they don't hold the Bitcoin? Like what are they? What's the real? concern what are they worried about that just i think the concern is that uh yeah i think the concern is that uh the industry has spent a lot of time trying to sort of normalize proof of reserves as just a thing that you do for exchanges for other big players and so to have the person who's sort of like arguably the most influential in the field right now just crap all over that and not only say that he's not going to do it but that it's genuinely a bad idea it creates cloud cover for everyone else not

to do it you know he basically like if you dig in like some of the more offensive parts of the comments are like, you know, basically saying that the problem with, you know, things like FTC was in proof of reserves, it was like, I don't know what he said, like something like, you know, don't work with little offshore tweakers or something like that, you know, like a clever catchphrase, but a complete deflection from like transparency norms that the industry has started to, you know, rally around. So he does do damage to the normalization of proof of reserves as a sort of standard thing for a, leading actor to just sort of not, again, not only not do it, but to publicly crap all over it.

Yeah, that all makes perfect sense. Let's move on to stable coins because that was another huge thing on the docket throughout the week generally, but I think the biggest story in that space, obviously, is that Circle seeking $624 million in their IPO. Obviously, that's not the value of the IPO. That's how much they're looking to raise. And, of course, to follow that up, BlackRock, maybe going to be buying about 10,000, percent of that, some other big names obviously looking to participate. And all of this, while

stories are still circulating, that Coinbase and Ripple are trying to buy Circle. Yeah, man, this is I have no idea at this point what's likely to happen with Circle. Every couple days we turn around and where it's pointed is headed in a different direction, which makes me think that they're playing all kind of angles right now, you know, and seeing where it lands. Yeah. Do you, we obviously don't know what's going to happen here, but I think that this is indicative of how much incredible demand there is for companies like this. I mean, generally for companies in crypto to go public, but also, I think, to grab a piece of the stable coin market as legislation heats up, maybe we should talk to us very briefly about where genius is at and what the odds are of that

passing. Yeah, I mean, look, I think that Circle has been right at the center of two, sometimes conflicting forces. Force one is political machinations, right? Like when the political fortunes of the Genius Act and some of the specifics around the Genius Act have been more in question, circles, you know, the appeal of the IPO has been sort of lower. But then you have sort of this countervailing force of the interest in the IPO market feels like it changes is incredibly quick shifting, right? Itoro was a surprise, but then then everyone sort of is like now geared up. And I think people are prepared or are trying to seize extremely small IPO windows, right?

I think that like people feel like there may be a window right now, but that it could be a very, very short one. And so you have sort of this extra concentration of demand. I mean, look, you know, sidelong this news, we also got news that the big banks in the U.S. were like planning a stable coin consortium, right? So that was our next story. Yeah. Yeah, circle's going to have ridiculous competition. So they got to position themselves in some way.

Either gear up with more money to compete or land in a home that's got bigger resources. So I don't know, they are a really interesting bellwether right now of everything that's going on, you know, kind of at a high level in the industry. We're going to go full Lord of the Flies with stable coins in the United States in the coming years. It's going to be wild because, listen,

we've already seen sort of shots across the bow publicly between Circle and Tether. Now we obviously have Tether, being, you know, finally they have their proof of reserves from Cantor Fitzgerald, as we know, but Howard Lutnik and Cantor Fitzgerald being partial owners. And obviously Tethered now part of 21 with Jack Mullers and SoftBank and Cantor Fitzgerald, just getting more of, I think, a stamp of approval in the United States, Circle looking to come online as a public company. And then all of these banks trying to compete with that directly, all in the context of wondering what will be

allowed from the Genius Act or whatever stablecoin legislation passes, everybody is going to stablecoin their faces off in the next few years. This is, it's going to be Bitcoin treasury companies and stable coins. That's what we're going to be doing. Absolutely. Stablecoins have this, you know, incredibly strong product market fit. The narrative has made them by investing in stable coins, you're also investing in America now, right? It is sort of like the way that the narrative is resolved. So, you know, from so many different angles, there's going to be a ton of energy around it. I know that those were all of our topics. Someone said, why aren't you guys talking about why is the market dumping and not going up like it's supposed to?

It's not supposed to do anything, but literally, I'm not going to say this is the reason, but I can't recall a time when Bitcoin went up during a Bitcoin conference. Yeah, it's a rule. It used to be consensus. Now, it's just a rule for any big conference. It has to go down. Yeah. Anybody who would be buying is playing double down blackjack.

Yeah, I don't know if the four-year cycle still exists, but I'm pretty sure that the conference rule still exists. So, you know, I wouldn't worry about it until it keeps going down for a week after this. Yeah, I'm not concerned about $105,000 Bitcoin personally. Yeah. No, but I actually, I don't. I am a bit concerned about Al-coins, though. Listen, I think we will have our all-coin seasons. Things will go crazy.

But I'm telling you, that is not where the pumpers and dumpers and the extractors are looking right now. Those things go up and down because of the huge VC money and all the people that have been participating in them. Those people want Bitcoin-related things right now. Yeah. I was just doing a quick search of various channels to see if there's any like Pacific catalysts. But every other story is sending a different signal when it comes to tariffs and trade.

And so there's sort of that general background volatility. It means one step forward, one step back pretty constantly. Also, just a reminder at Liberation Day, when all of the market uncertainty really kicked in, Bitcoin was $82,000. It's now $105,000. Yeah. So if you're wondering about when it was supposed to go up, that's a time it probably was supposed to go down and it's up big. So I would not worry about Bitcoin at the moment at all. That's all the stories that we have for you guys. Give NLW a follow and of course check out the breakdown and we will be back next Friday for the Friday 5. Thanks, ma'am. Later, guys.

Have a great weekend.