The Breakdown - The Five Most Important Stories in Crypto This Week

Episode Date: October 4, 2025

On today’s Breakdown, NLW kicks off the first Friday Five of October with Bitcoin’s soaring price action. From October’s uncanny seasonality and ETF inflow momentum to government shutdown delays and Citi and JPMorgan’s bold predictions, the conversation explores why markets seem determined to shrug off risk. NLW also covers the potential regulatory fallout of a prolonged shutdown, new SEC-CFTC collaboration, Kraken’s $20B raise, and Stripe’s stablecoin play. Plus, the week’s strangest culture clash story—Netflix cancellations over Elon Musk tweets. 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, October 3rd, 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 in the show notes or go to bit.ly slash breakdown pod. All right, friends, we are back. with another Friday 5. And as our first Friday 5 of October, it is only appropriate that we talk about why Bitcoin is soaring. Uptober, baby, that's the story. Let's dig in.

The Bulls are back in town. They don't care about government shutdowns with a lack of economic numbers. Nothing stops this market. Recessions are illegal. And if you think things can go down, you are just simply wrong. $120,000. Bitcoin, just casual, like 120,000. ETF inflow, boost market momentum. What's going on with this market? There is no force more powerful in Bitcoin than the power of October. Simply put, it turns October and this happens.

That's just the rule. I don't make the rules. It literally happens on the first. I don't remember I keep saying it was maybe it was 2021, but there was like a $10,000 god candle or something crazy, a multi-thousand-and-percent god candle the minute the clock struck, midnight in the Eastern standard time. Yeah, usually, actually, if you go back and look at the pattern, it's usually the first couple of weeks, give us a little scare,

and then the second half of October is where it gets good. But to your point, you know, I think actually 2017, 2021 and now 2025, so those who are calling the end of a four-year cycle be damned, you know, we've had this explosion right at the beginning of October. So, yeah, it's got to be it. Bitcoin seasonality, no other explanation. There could be no other explanation. So clearly the four-year cycle is then intact, which means it's all over a month or two.

Yeah, exactly. I enjoy it now. No, but you know, it's funny. I think that there's a couple things that are actually going on. And one of them is there is a bit of just sort of broader market. You know, I would kind of characterize the markets right now as sticking their fingers in their ears and saying, Nana, Nana, you can't stop me. As all of the other people try to say, you know, bubble or AI infrastructure boom,

bubble or, you know, like there is a real kind of a willful unwillingness to do anything but go up to some extent. And, you know, Bitcoin is a little bit coming along for the ride for that. Now, at the same time, I do think that we're also experiencing kind of one of the things that is unique about Bitcoin, which is while it has become a full macro asset, sort of high beta to the stock market in many contexts and certainly more than it's ever been, it also still does have this huge base of ideological holders and buyers for whom this idea of it as a hedge against government weirdness is intact. And by the way, it's not just the crypto weirdos like us who have been sort of spreading that narrative. It's also what Larry Fink talks about in many cases, right? Bitcoin

is a hedge against debasement and just sort of government chaos more broadly. He talks about this quite frequently on shows. And so, you know, the shutdown is actually kind of an interesting context for this where there's some narrative juice on that, like, hedge against dysfunction side, as well as just whatever the heck the markets are doing, which is just, you know, shaking this off entirely. So there's a two completely almost opposite forces, but that both drive number up. Yeah, I had this moment where I saw the government shut down, which, of course, was coming right into October 1st, and then you saw Bitcoin skyrocket sort of after hours going into the day and said, wow, this is like Silicon Valley Bank. You know, it's like something crazy happened,

but then stocks just went up too and everything else went up. So nobody cares about the government shut down in any market. And so it's obviously not unique to Bitcoin in this case. But it was very interesting that those two things aligns so well. I mean, you would think that the government was shutting down. We weren't getting economic data that maybe stocks would take a pause. Yeah, no, not. That's not how works.

No, but listen, the other thing I think is it's a good reminder that we really were very close to like high happy numbers this entire time. We just get bored, right? Like, in retrospect, so much of the like the antipathy. 110 was pretty good. Yeah. And it was really close, too. Like, it wasn't, to your point, that massive God candle.

This is just a casual 3.7% jump up in a day, which is big, you know, but not crazy. And here we are. And we're like, oh, maybe we were whining too much. Yeah. And in the meantime, of course, we get big targets. You know, price goes up a little bit. And we start hearing, you know, 2.5 trillion banking giant city says Bitcoin will hit 181,000 in 12 months. What was hilarious about this prediction is it came out, I think, yesterday.

And it was like 135,000 by the end of the year, 4,500 Ethereum by the end of the year. And I was like, Ethereum's like 4375 right now. Is there a prediction really that this could go up? I think it might have hit 4,500 yesterday the day of their prediction. So maybe we can take some of these with a slight rate of salt. And of course, 3.6 trillion J.B. Morgan says Bitcoin's undervalue compared to gold. That's actually a very, I think, reasonable take. Suggests Bitcoin can reach 165,000. Once again, reminding people, this is not Jamie Diamond calling in his personal prediction to Bloomberg to tell you anything to Bitcoin.

The interesting thing is that now we do have the potential for narrative self-fulfilling prophecy to take hold a little bit. You know, there is so much, so much seasonal history now that the combination of this, plus all of the research shops weighing in now, like actually could create some meaningful momentum, especially if you have just a little bit of catalytic action, you know, I mean, this is one of the potential negative impacts of the shutdown that we might talk about is these ETFs potentially getting delayed. But, you know, if we did get the sort of self-certification type of approach to ETFs and all of that rush into market, there's a whole bunch of things that could happen that turn these very quickly into self-fulfilling prophecies, not just predictions.

Absolutely. And the next story here is going back, to that government shutdown is that the government shutdown could delay new crypto ETF approval. So obviously there's going to be some secondary effects to an extended government shutdown that are not unique to crypto. This could delay any ETF approval, of course. But we were expecting October to be this massive month for up to 19 or 20 approvals of ETFs. That really just cannot happen while the government is shut down.

And we're seeing a lot of projections or predictions. that the government shutdown could last upwards of 30, 60, maybe even more days. So time to temper some expectations for what we might see on the legislative and regulatory front for crypto during this time. Yes, I think that this is potentially the most negative set of second order effects for us is, you know, we were already on pretty tight timelines with a lot of this regulatory stuff. And this could be just enough of a delay to bump it into next year. And of course, next year becomes midterms, and it's just a whole, whole different kettle of fish.

So I think that is something to keep an eye on. You know, look, the Atkins SEC seems hell-bent on pushing these things through, but there are limits to what can happen in this context. And boy, 30 or 60 days of shutdown can kill a lot of momentum. Now, the good thing is, I think that this wave of ETF approvals would be narrative-accretive, but I don't think that we're sort of reliant on them. It's not like we're looking for any good catalyst to turn the top of the time. hide right now. It's fuel on the fire kind of a thing. So maybe the negative impact is limited,

but it's sort of we're not getting the positive impact that we might otherwise have gotten. Yeah. I think that's a very fair take. I just wonder at what point is the shutdown long enough that it completely kills momentum because we go into midterm season or they have to be concerned with other things entirely. And this is just a bit too far down the list to be a priority when there's things that have to get done. They have to be 90, 100. days or something, I have no idea. I'm not predicting it will go that long, but there has to be a critical point where there's a tipping point and all of a sudden they still have time to do this stuff. Yeah, that's my concern and my, you know, I think that with the ETFs, it's less of a

concern. I think that because that is SEC Fiat, I think that they are going to race to get that. In fact, I can see them using that as their way of announcing that they're back and open for business again because it's so within their control. But I think that broadly speaking, this is my concern as well. And I don't think it takes 90 days to screw up that legislative agenda. I think it's more like three weeks than three months. Yeah, I agree because there's just going to be so many more things that they have to deal with first and the things they want to deal with get kicked down the road. But meanwhile, at the same time, we have harmonization, a new era of collaboration between the SEC and CFTC.

Obviously, one of the biggest complaints that we've had as an industry and probably many have had in their industries is that These two regulators should be crossing paths far more often than they do. They very much are in the same circles of regulation, but seem to be completely disjointed and never speak to one another. Atkins really pushing to make that no longer be the case. Also at a time when it should be mentioned that Brian Quintends, who many believed was a shoe in to be the head of the CFDC, has been dinged.

It's not going to happen anymore. He was obviously coming over from A16. He is very crypto-friendly. Yeah, the CFTC is on a journey, man. So much so that after, so much so that after this, they had to release a bunch of statements about how they weren't just going to fold these two organizations into one another and they were going to keep them separate. Just to put a little bit of perspective on how disconnected these agencies have been. Because, you know, it's easy to think that maybe this is sort of a Gary Gensler phenomenon. This is the first joint roundtable and I think 14 years between these two organizations, which is actually just kind of mind blowing that.

The two major market regulators wouldn't have had context to hold a joint roundtable, you know, and a decade and a half together. But look, it's sort of more of the same story we've been talking about before of the bureaucratic apparatus really wanting to kind of turn a new page, move things forward faster, not have their own processes be the barriers to innovation, you know, which now we need them to, A, turn back on the staff spigot so they can actually do work. And B, with CFTC, find even one. person who wants to and will get approved to lead the organization, I guess, because right now

it's non-functional, basically. As long as the government isn't shut down, it seems like we're moving in a very positive direction. That's all I will say, you know, until, of course, Elizabeth Warren becomes president or whatever happens next and completely ruins the entire party for us, because we know that that's the only way the simulation can possibly proceed. The next story, Kraken seeks new funding at 20 billion valuation after five $500 million raise. It seems like a lot of speculation as to what's going to happen with the Cracken IPO. Obviously, all this comes in context of a monster IPO season for crypto with some companies that nobody would have expected to do particularly well at all. But we had Circle,

bullish, Etor O Galaxy Digital Agency for a huge, huge season of all across the board, extremely successful IPOs, at least at first. What's going on here with Crackett? my read with literally zero insider knowledge or conversation is that Cracken decided that based on where they are relative to how long it's going to take to IPO, but their best play for this market enthusiasm was not raised to IPO, but was take advantage in the private markets, right? Juice the valuation, get evaluation set. They haven't raised money for a billion years since the very, very beginning, very early on. And so I think that they, basically made an assessment that I don't know that I would go so far as to say that they've

assessed that they have missed the window, although you have to think that that's part of the calculus, is that maybe that the enthusiasm looks to be dampening a little bit. I think it's more that the way that they can play all of the enthusiasm in the immediate term is private markets, right? And so they did that. I think they closed 500 at 15 or some number, 200 to 300 million at a 15 billion dollar valuation. That was sort of like the secret one. Now they're kind of re-upping again. So, you look, I think it's a smart strategy. Line the coffers, create some dry powder. My guess is that they are proceeding with haste but not insane urgency around the IPO. And they're going to make a game time decision around whether it still looks good or not at

the time that it comes. I mean, I think you're absolutely correct. We were talking about Tethers, humongous fundraise, obviously. And I think it was Dave Weisberger, who's said there's an old adage on Wall Street, it's something that's effect, but if someone's willing to give you money, take it. Yeah. I can go to the private market and get a huge amount of money without taking the risk of IPOing and not being able to control how successful that is or market conditions, you take the money.

One of the most under-discussed stories in crypto is how much cycle winners and successful companies just set themselves up to do well during the bad. parts of the cycle. This happens over and over again where the companies that thrive are not the ones who looked like they were the best or were the top or the most talked about. They were just the ones who had good treasury management, for lack of a better term, or had good strategy, you know, who were able to weather the storm given the intense cyclicality. Now, hopefully, you know, one part of the four-year cycle that I think everyone would be totally happy to jettison is the three years of horrifying bear markets that we have to go through every time.

But the winners in crypto tend to be the people who are prepared for those cyclical downturns and interest downturns and enthusiasm downturns. And so storing up a half billion bucks is a good way to position yourself for a long duration, you know, during whatever it might come. Yeah, we've seen it so many times where companies in crypto are depending on a treasury full of illiquid coins as their entire balance to operate in the future and lose their runway completely. And we even saw it with a lot of publicly traded miners who bought mining equipment at the very top of the market at $20,000 for machines that were $4,000 a year later and couldn't get that capacity online until the depths of the bear market.

So there's a lot to be said for not assuming that the sun is going to continue shining indefinitely. Bullish exists because a long time ago, EOS decided that it was a good idea after their $4 billion IPO to trade a bunch of of their coin for Bitcoin. Period. Full stop. Now, they've done a bunch of stuff since then. I'm not discounting that. But at core, that company would not exist if EOS hadn't made that decision forever ago, you know? What a wild ride. And our final story of the day, introducing open issuance from Bridge, a new platform to launch your own stable coin. We've now reached stable coin inception, where not only do we have to worry about companies launching stable coins. Now you can launch your own stable coin using a company that launches stable coins.

We're going to have so many of these things. Yeah. This almost nullifies the previous conversations and hand-winging and pearl clutching we were doing before around whether there was going to be too much market fragmentation and everyone was just going to do it. Basically, Stripe now says, you'd be insane not to do it. And here's a platform to do it. And so maybe we're kind of round-tripping to the point where we're going to avoid the liquidity and interoperability issues of everyone having sort of mass stablecoin fragmentation by having mass stable coin fragmentation, but all issued on the same platform. It's a super smart play from Stripe. I mean, just absolutely, if I were a circle, this would be the single most nervous announcement

that I had seen, period, full stop. More so, I think, than just another big bank trying to do a Stablecoin, a consortium that can all use the same rails where they don't have to care about liquidity, but they can control their own issuance. That, that to me seems like a real threat to USDC dominance in a way that other stuff that we've seen so far has not. Incredible how all in on Stablecoin Stripe is. Yeah. Right. I mean, we always joke that, hey, you don't want to be Kodak or Blockbuster. And Stripe is obviously a payment company and realizes that this is just a better, faster, cheaper technology. But man, it's like, you know, one announcement after another. They were one of the first to adopt USDC to actually use the technology

to help their business. Then they announced tempo, right? I mean, their own, you know, layer one to do this stuff. And now probably on their layer one, anyone in the world is going to be able to launch a stable point. I wonder what comes next. Yeah. It's like I said, it's a, I wish that Stripe would get public so we could buy them. Yeah. And the most important story of the week, have you canceled your Netflix yet? No, what happened with Netflix? I missed this one. Oh, you're just still online, man. The world just, just get in there. I've been just, apparently like Netflix has a cartoon

where there's a trans character or something and Elon Musk tweeted about it. And so, you know, if he tweets about it, it's over. And then there's like another show or girls kiss or something. I was like, in this story. Like, my friend, he has an eight-year-old. And he was like, there's girls kissing on Netflix. Like, I'm like, there's girls kissing in the street, by the way.

But there's girls kissing on Netflix. I'm canceling Netflix. This is a guy who's like, eight-year-old plays Fortnite three hours a day. And I'm like, yeah, are the girls kissing, like, worse than the killing people and talking to strangers on the internet all day? I don't know, man. Listen, I'm all for, like, if you don't support a paid company to, like, not pay that company. I do. Listen, I love capital markets create the greatest mechanism for protest that's ever existed.

And so I'm never mad when people are loud about shit because it gets solved out. But, yeah, listen, I live in my happy little world of AI and crypto news. And here we are. Okay, well, go follow Elon Musk on X because you're going to have a field day today. All right, guys, that's all we got for you on the Friday 5. Of course, check out all of NLW's work on the breakdown. And if you're interested in AI, as he said, does that too. That's all we got for you today.

We will be back next week for the next Friday 5. Thanks, man. Later, guys.