The Breakdown - Wall Street’s Crypto Push, Western Union’s Stablecoin, and the Fed’s Halloween Confusion

Episode Date: November 1, 2025

On this Halloween Friday Five, NLW and Scott Melker break down a wild week in macro and crypto. The Fed’s latest meeting left markets confused about future rate cuts, while Wall Street and legacy payment giants doubled down on digital assets. ICE partners with Polymarket to explore tokenized collateral, Mastercard eyes a $2B crypto acquisition, and even Western Union is launching its own stablecoin. Plus, Solana ETFs crush expectations, and what this cycle’s institutional dominance means for the future of crypto markets. 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 31st, and that means it's time for the Friday 5. Before we get into it, 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. at L.Y slash breakdown pod. All right, friends, quick announcements actually before I get into the Friday 5 with Scott Melker.

Next week, I will be out of the country for my anniversary, and since I like staying married, the breakdown will actually be off for the week. We will be back the following week, just as normal, but in advance, I hope you have a very dynamic and exciting first week in November. Certainly the last week in October had a lot to talk about, so without any further ado, let's dive in. Good morning, people, and welcome to the Friday. Friday five or a few minutes earlier than usual.

Feels good. Feels good. We're here earlier. Fresh for a Halloween Friday five. It's very how early we're beginning. Scary. You see how that is? I see what you did there.

I see what you did there. And what is scary, apparently, to people, is that the future Fed rate cuts are far from certain after a divided meeting. Quite a few articles right now about confusion at the Fed and what they may or may not do. We know that QT is set to end very soon. but many saying that if they end QT, they also have to end rate cuts for now. Even Michael Burry of the big shorts, sometimes we see bubbles.

Sometimes there's something to do about it. Sometimes the only winning move is not to play. Cool story, bro. Michael Burry is worse than like a high school quarterback who wants to bring up the big game from his high school days every party that is at forever. Anyways, regardless of all over those mountains. Uncle Rico, let's go.

Yeah, I think that the Fed meeting was surprisingly hawkish, even though it wasn't really hawkish in a traditional sense, just relative to expectations. I think markets had more or less entirely priced in another rate cut in December at this point. And then literally as he was talking, it went from like 100% to 66%. The January cut went from the middle of the range to 25%. And it's just clear, you know, that Powell isn't really, there's lots of mixed signals, as there always has been. We're also careening into the period where Powell, effectively a lame duck at this point. We're starting to see it emerge in terms of the wide

variety of opinions where for most of his tenure, Powell's done a very good job of keeping everyone more or less in line without a lot of dissent. There's clearly a lot of different divergent perspectives here. It was an interesting meeting, honestly, like from a sheer talking about things that are interesting perspective, there's a lot more juice in this one than we often get. Yeah, you can only talk about the Fed so much. There's so much uncertainty. And to be Frank, we won't know until next month. But it is interesting that you get into this cutting cycle and people are so confident that it's just going to continue. And then five minutes later, nobody knows what the hell is going on. Well, what's interesting is that for the first time,

in a lot of ways, broader macro factors are now even subsuming the Fed, right? Like as soon as the press conference started, it was all questions about Powell's perception of the AI bubble, Powell's perception of layoffs and what that's going to mean. You know, it was like it was a much more sort of outside in type of Fed than usually it's really just like group therapy for those, you know, Fed governors and what they're going to do next time. Yeah. And pivoting to the other part of the title here, Wall Street doubling down on crypto, well, it's largely institutions, but Polymarket plans U.S. return within weeks with sports focus. That's one story. But this is the one that goes Wall Street and really blew my mind. Polymarket will help ICE adopt 24-7

tokenized collateral. This is New York Stock Exchange. Ice, obviously the largest owner of exchanges in the world. Wow, because this is not a polymarket thing. This is a using smart contracts and the technology to tokenize everything thing. Yeah, it feels to me like tokenization is going to be one of the most gradually than suddenly things we ever experience. I mean, we're all living in a gradually then suddenly sort of moment across crypto writ large that's been going on in some ways since, you know, Black Cross. shot the starting gun for a spot ETF. But I think that this has the potential to be a whole different level. You know, you've got Larry Fink just out here continuing to beat the drum anytime

anyone will listen about anything he's talking about tokenization and the complete tokenization of everything. You now have the intercontinental exchange, making big multibillion dollar acquisitions, at least in part to sort of build out that infrastructure. I think this is going to happen head spinningly fast. Yeah, it is going to happen head spinningly fast. And we're going to see, the adoption of the technology across the board. Just last week we're talking about Governor Waller of the Fed talking about doing this to the Fed. So once you see the central banks talking about it, I don't think there's much question as the direction things are heading. I think it is worth going back to this other story quickly. Polymarket plans U.S. return within weeks with sport focus.

I mean, we're going to have predictive markets for literally everything. And I really think this is going to crush very complicated traditional sports betting. And it's all going to be, a lot of it will be on crypto rails or at least using crypto for the bets. But much easier to understand a 75% chance my team wins than a plus 120 minus 120 over under spread. It's so binary and moves in real time. It's really just, I think, taking over. Yeah. I mean, it is just a 10x experience on that sort of thing for sure. You know, you talk sort of like Silicon Valley product people. You know, the new thing's got to be 10x better than the old thing. I think there's an argument that it is in this case. So I think you're right. I think we're going to see a lot of it.

the sports betting conversation and just the casinoification of everything is an interesting sort of subtopic that's getting louder and louder. I anticipate being part of this next election cycle as well. You know, it's interesting. I was thinking about, I saw someone, I can't remember who it was, but they had a great tweet that was just sort of like a single bulleted list of why, like, why we are, where we are and what this cycle was like. And one of the things that it was talking about was the fact that retail never really showed back up this cycle. And I think that in a way, weird way. Well, one, I think that that's absolutely true. But two, I think that because we didn't have some weird side show story, you know, like I'm not saying NFTs are weird, but something

that seems weird to outsiders like NFTs or whatever, you know, the closest we had is sort of a very brief meme stock thing. It's almost like Wall Street didn't even have, like, as they're watching what's going on, they didn't have a chance to get refreaked out by some new crazy thing that we were doing because just no one showed up to do the crazy thing. It's just literally been all institutions all the time this entire cycle. To the extent that we've done anything crazy, it's sort of like nudging into their world with our crazy treasury strategies. But it's been such a weird cycle by not having some retail group

that's trying to make an insanely fast buck with something different. Just to wrap the predictive markets one, I don't know if you saw the Coinbase earnings call. I don't have the audio here. But at the end of the call, Brian Armstrong literally said, hey, I'm actually watching the predictive markets, and there were a lot of bets on things that I might say, so let me just rattle them off. Bitcoin, Ethereum, Solana, whatever they were, and he just said all the words that people were betting on at the end of the call. I mean,

what a sign of the times. Yeah, it was pretty hilarious. Yeah, what to Chad. Legacy internet and infrastructure are brittle, plagued by downtime, coverage gaps, and outdated financing models. Communities and builders are left behind while capital sits locked out. Althea is changing that. Since 2018, their technology has powered resilient, sustainable networks across the U.S. and abroad. With Althea L1, they built the world's first blockchain purpose-built for utilities and telecom, turning infrastructure into a transparent, investable asset class. Through liquid infrastructure, networks can now be financed in real time, operated more efficiently and scaled to meet the $3 trillion telecom and utilities market. This is fintech for infrastructure,

connecting capital directly to builders and returning revenue seamlessly to funders. No middlemen, no bottlenecks, just sovereign, resilient infrastructure that works for people, communities, and investors alike. Learn more at Althea.net and find them on Cracken to join the future of infrastructure finance. Moving on, we've got adoption by a number of payment institutions, exclusive MasterCard poised to acquire crypto startup zero hash for nearly two billion. Sources say we can dig into that one. From what I saw, they're not worth $2 billion, but it shows just how desperate these dinosaurs are to keep up with what's happening. MasterCard to enable 3.5 billion cardholders for Bitcoin and crypto transactions via blockchain network.

Yeah, I mean, the master cards in there. These stories just get blurry because they're all, they're all telling the same story. Mass conversion to crypto infrastructure as a key part of the traditional financial rails. And how do we do it quickly? And I think that to the extent that the zero hash story is interesting, it's that to your point, there's clearly a premium right now on speed and a tax for a feeling like you have to catch up. And I wouldn't be surprised to see a lot of that sort of M&A activity in the next couple months or next 12 months as companies sort of, they decide that they can't fight the tide any longer.

Yeah, you just need to buy someone. You're not going to build it fast enough. Yep. It's just really crazy to see once again how fast all of this is happening. And of course, maybe the story of the week, Western Union announces USDPT stable coin on salon and digital asset network. I thought it was called Wu WUSD, like the Wu Tang USDA. And I got really excited. Now I'm confused. I don't know if it's USDPT or if it's Wu USDA.

But either way, a company made famous by the Pony Express and literally delivering money and mail by horse and buggy, which would arguably be the last likely holdout on something like. like this, this is kind of like the vanguard of payments when it comes to crypto is going to go ahead and disrupt themselves here. Yeah. You don't survive that long by sticking to the same guns that you stuck to during the Pony Express days, you know, there's not that much to say in the sense that this is just the inevitable, like sort of ascension of crypto into this area. I guess what is different and what's notable is that we are very much and have fully kind of ticked past the point of, hey, look, big financial firm is making announcement about a thing that they're going to do to big financial firms is doing a thing. They're doing it right now or they're buying someone

to do it tomorrow. And that is, I think, a pretty distinct change that you can kind of feel out there. And you can also feel that they know that they're completely screwed if they don't do it. Yep. Yep. 100%. I really wonder how this is going to work for Western Union. I understand disrupting the technology with something faster and better, but how are they going to get away? with 10, 11, 12% predatory fees if they're using a stable coin that effectively has none. I guess they just charge them on the front end and call it a day and assume that people don't know. Yeah, who knows? I mean, I think that we are at the very beginning of figuring out, like, markets haven't done

their work yet to sort of rationalize all of these service prices as these become sort of, you know, mainstream. There's going to be dislocations for a little while that will allow people to still get away with things because, you know, whatever, random person X is still using Western Union. and so they just use that version of the thing. Over time, you would expect there to be sort of price compression and those sort of things to be competed away. But we'll see.

Another huge story this week, obviously, is the Solana ETFs and the H-Barr-ETFs and all the other ETFs. Wall Street, Salana Bet advances Fidelity Upstates ETF filing, so we know that anybody who had a filing is going to start filing for staking, et cetera. Upcoming all-coin ETFs could draw $14 billion, according to JP, Morgan, ETF to $8 billion on XRP and sole ETFs near $6 billion, I think considering the power of the community, XRP is ETF will probably do exceptionally well, as they're saying here. Interestingly, we had outflows on Bitcoin and ETH spot ETFs, but inflows on Solana ETFs,

and Solana has more filings than any other crypto since 2024 with a total of 23 ETF filings institutions want Solana. So this was the best launch of 2025 of an ETF. Doesn't compare, obviously, to the Bitcoin ETFs or even the ETH ETF in 2024. But out of 850 total ETFs, non-crypto-related everything, this Salana ETF, B-Soul was the best this year. Yeah. I mean, that, I think, is the really remarkable thing about this, is that we're so anesthetized at this point because of these huge numbers that these other ETFs put up. And especially because for frankly, a lot of us, I don't think we're paying attention to the ETF markets with particular detail before Bitcoin and Ethereum showed up on the scene

that we're like, oh, I guess it's okay, you know, it's just 66 million in its first day or whatever. Not bad. And it's like you said, the best performing ATF of the year on its first day. So look, the demand for crypto is very clear. We are just now beginning the phase where we're going to see just how far down the long tail it goes. I think that we are. are going to see to your point where the long duration community building efforts have paid off. And I think that you're likely to see a sort of distribution, not just based on total size of the token right now, but also based on strength of community. So I would expect XRP to outperform among others.

Yeah. And so we're clearly going to get each apps for pretty much everything. Oh, yeah, they're going to, we will try absolutely everything. Whether they are successful or not, you better believe we're. We're getting an ETF for everything, you know, times 10. I think a lot of it is going to obviously be heavily market dependent as to when they launch and how well they do. But we're going to have them. They're going to definitely be there.

And speaking of companies and their old coins, ETHZILA sells Ethereum to buyback shares is crisis coming. We have Ethereum. There you know, sells 40 million of ETH to fund stock buybacks. Of course, we also apparently have Sequin Bitcoin treasury selling $110 million in Bitcoin. I thought the whole point of this was to sell shares to buy Bitcoin and Ethereum, not to sell Ethereum and Bitcoin to buy shares. Yeah, I don't know yet whether this is short-term wobbles or the end of the trend. That's the thing to watch.

But it's certainly not a good sign if this is a thesis that you're real stoked on. I mean, what do you think the future of these is? I think that it was always way overblown and that there's going to be a power law distribution and that a few of them are going to do enormously well and that others aren't. And I think that the ones that are at the top are going to feast on the carcasses of the ones that fail. But you know what else? I think that part of why people are excited about these is these are extremely liquid assets that sort of cap your downside to some extent.

And you can make an argument that the ability to move in and out of them, even if it's sort of off mission, is part of what makes it an appealing play. You know, like you just go, go tap into the existing markets to, you know, sell and move on with your life. So, I don't know, I've never been a sort of a huge sector bull on these things. But I think that as, I think that as a modest part of the overall ecosystem that accommodate a certain amount of, of demand, there's room for some that do really well in a very consistent way. But at the end of the day, I don't fault anyone for trying because we just don't know how much appetite the market has until we see. You've got to push it to those limits and actually find out. And it could change, honestly, wildly if price ends up at $150,000 in a few months or something. A lot of these that we're

talking about now will end up have done exceptionally well and it'll be a big nothing burger. But I do think we do get the consolidation. And this is just actually. goes everything we've ever seen in this space, which is a lot of people try a lot of things. Most of them fail. Something rises from the ashes, and that's where we get our future kind of narrative or champions. One of the things that makes crypto different than other startup areas, because this is the pattern for everything, right? Like every new technology theme has a hundred times the number of companies try a thing that are ultimately successful at that thing. And sometimes things that they try aren't successful at all. But because that all happens

in private markets, it's sort of like out of the limelight. Because of the nature of crypto tokens as this sort of monetary type thing that has capital and participation right away, it's like if every startup in Silicon Valley went public from a perception and from a participation perspective the day that they were founded. And so everything seems more dramatic in crypto land because the failures are public, the successes are public. But it's really ultimately not that different than any area where lots of experimentation tries lots of things. Some of them work. Some of them don't.

Usually it's unexpected things that work. And eventually there's consolidation into a few big sort of winners that change the landscape around them. That was all the stories that we have. But I just want to ask you briefly, market thoughts. Here we are sitting at 110,000, the very end of, I guess we can say, a disappointing October. Yeah. I think it's fair to say in historical perspective, it's a disappointing October.

My sense is that in the long term, we won't be all that disappointed. I think that we're going to look back at this time as one where it's just, again, if you weren't paying attention just to crypto and you were looking broadly, there is so much confusion. Even, you know, markets are always marked by confusion, but boys, there are a lot of confusion right now. The debates around whether AI is a bubble and to what extent it's a bubble and whether it's a bubble in this way or a bubble in that way is totally ubiquitous across the industry.

and that's really shaping how people are participating in all sorts of other things. That's starting to shape the way people are thinking about monetary policy. But then meanwhile, alongside this, you have trade policy going on. You have sort of like weird signals with a China deal and then it's kind of anemic. There are just so many factors right now, which means people don't have a handle on anything. And I think ultimately, again, while yes, based on October standards and the fund that we normally get, it's a little disappointing. I think that we will be fairly pleased with the durability of Bitcoin and Crypto when all is said and done. Totally agree.

Well, that's how we got for you today. We started early. We get to end early. Everybody give the breakdown a follow, of course, and check out everything else that NLW is doing. We'll be back next week, obviously. Happy Friday, 5. Happy Halloween.

And happy Bitcoin White Paper Day. Oh, that's right. 17 years ago. Yep. Congratulations, Satoshi. you did 17 listening and I know. Wild. All right guys.

Thank you, everybody. We'll see you soon. All right. Later. Bye.