The Breakdown - What Do Mexico's Second Wealthiest Billionaire and Arya Stark Have In Common?

Episode Date: November 21, 2020

On this edition of The Breakdown weekly recap, NLW discusses: Traditional markets: The tension between vaccine optimism and a growing national wave of economy-disrupting lockdowns Regulatory landscape: Crypto ally Brian Brooks nominated for full term at OCC while SEC Chair Jay Clayton steps down early  Bitcoin Miners: Sold out until Spring Celebrities and Financiers coming to the Bitcoin space  https://twitter.com/Maisie_Williams/status/1328428879334297600 https://twitter.com/RicardoBSalinas/status/1328850136290775041

People are coming to this market with the same narrative that so many of us who are listening to this show right now have. It's not about speculative get-rich-quickism. It's about feeling like there is a tectonic shift in monetary policy, fiscal policy, the way that we see our responsibility to one another, the relationship between government and citizens, the relationship between corporations and government with money being the vehicle through which all of this flows. And that Bitcoin was designed for this moment. 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.

The breakdown is sponsored by crypto.com and nexo.io and produced and distributed by CoinDes. So what do Mexico's third wealthiest billionaire and Area Stark have in common? What's going on, guys? It is Saturday. November 21st, and that means it's time for the weekly recap. Let's do a true weekly recap looking at multiple dimensions, shall we? First, let's go over to traditional markets. As I mentioned on Thursday's show, there have been two competing forces in markets this week. The first is excitement and optimism around the vaccine and the potential for a new era driven by a Moderna or a Pfizer vaccine. we see the light at the end of the tunnel, and markets are excited about that.

It means a return to normalcy. It means this pent-up demand that people have had could actually find expression out in the world, buying things. But then there's the reality of the short-term, of a growing caseload, and, importantly, the growth of restrictions as well. So far, the new lockdown restrictions haven't been impacting in the same way that the first set were. We're not seeing blanket shutdowns of entire categories really yet, for example. It's tended to be more incremental bars closing early, things like that.

However, if that changes, it could get really gnarly, really quickly. And of course, we're staring down what could be the most significant spreading event in Thanksgiving. So it's really hard for markets to fully embrace their optimism around the vaccine when there could be harder times ahead. Ironically, of course, another wave of forced shutdowns would also likely force the hands of legislators who so far have failed to come to terms with one another on another round of stimulus. Markets are hungry for that fiscal stimulus, and so maybe if there is another wave of shutdowns,

it would actually push them in a different direction. It seems to me pretty inevitable that these numbers of caseload are going to continue to go up right on through the winter, at least through the holiday season, and so it's highly likely that we see some movement on stimulus, and until then, markets are going to be in this state of suspended animation and churn, really. Next up, let's talk about the regulatory landscape for crypto. So a few things happen this week. First, Jay Clayton, the head of the SEC, stepped down earlier than expected. His term was slated to be done June 2021, but he's leaving at the end of the year. Jay Clayton has had kind of a mixed bag reputation with the crypto community.

He has been really focused on ICO enforcement. He's not allowed a Bitcoin ETF. He hasn't been seen necessarily as a huge enemy or exclusively as an enemy, but he also certainly hasn't really been a friend. We've looked at people like Hester Pierce on the SEC as our representatives, as our voice, but unfortunately it's been primarily a dissenting voice. Second bit of regulatory intrigue was Brian Brooks being nominated for a full term as comptroller of the currency.

Brian Brooks was the general counsel at Coinbase before he was recruited to come be the deputy at the comptroller of the currency before he was promoted and got the acting comptroller job when his boss stepped down. He has been extremely active in pushing a crypto agenda, clarifying that banks had access to custody crypto companies saying that it was their job even to service stablecoin companies. In fact, he's been so agro about this. He got himself in hot water with a set of congressional Democrats who questioned both his unilateral actions, as well as how much focus he was putting on crypto versus other parts of the banking industry. I think we can expect to start to see a shift in the conversation to Biden's economic team soon. So far, we've only seen his transition head,

Gary Gensler, who, as I've mentioned on the show before, was at the CFTC before. He's a pretty fierce regulator of banks. And at the same time, he's also done courses at MIT about Bitcoin, about blockchain, so it could be a really interesting conversation. This episode is brought to you by Crypto.com, the crypto super app that lets you buy, earn, and spend crypto all in one place, and earn up to 8.5% per year on your Bitcoin. Download the Crypto.com app now to see the interest rates you could be earning on BTC and more than 20 other coins. Once in the app, you can apply for the Crypto.com metal card, which pays you up to 8% cashback instantly on all purchases. You'll reserve yours in the crypto.com app today.

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And remember, it's your crypto, your credit. Your Choice. Get started at nexo.io. With that, I will stop beating around the bush. This was an absolutely insane week for price action in Bitcoin. Just a couple weeks ago, you guys remember, I was on an anniversary trip in the White Mountains of New Hampshire, and I had to pop back in for a special 15K episode. Well, here we are this week absolutely churning through 16 through 17K through 18K, and the first half of this week, there must have been a hundred tweets saying something to the effect of, you know, this is such a quiet rally. And what they were referring to is the idea that this

wasn't some huge retail explosion. We weren't seeing Bitcoin show up in Google trends. There weren't CNBC stories every day. Well, around midweek, that started to change. CNBC, Bloomberg, basically all of those outlets started running news stories. If you want to use appearances by crypto and Bitcoin Twitter people on cable, we are in a bull market for sure. But still, even with that, the point remained about what was and wasn't driving this bull run. It's really not been about those retail investors who are fomowing in, but a very different category of institutional investor. I discussed that quite a bit on my show about huddle fomo from earlier in the week. I suggest you go check it out if you haven't heard it yet.

But for now, since it's Saturday and we're having fun, I want to look at some of the other indicators for just how hot things are right now. First, let's go over to mining. Bulk pre-orders for mining devices are sold out until May 2021. Bitmain's Antminor S-19 and S-19 Pro as well as the T-19 all can't be delivered until May 2021. MicroBT, who is BitMain's top rival, similarly shows that their What's Miner M-30 as sold out, and they're currently selling April and May pre-orders. We're also seeing prices have gone up, something like 500 or more per unit, since the

pre-order for November units. What seems to be different this time is that there's always an increase in demand for mining devices after a big price increase. What's different this time is that a ton of the interest is coming from outside China, and it's really consolidated, its institutions looking to purchase a thousand or more machines at a time. Now, I also mentioned that there really hasn't been the same sort of retail craziness as we saw before. However, there have been a few celebrities popping into the game this week. Ricky Lake, former daytime talk show host, has been tweeting over and over about Bitcoin. At 6.26am on Wednesday, she tweeted wide awake, Bitcoin on my mind, Hoddle. Logic, the American hip-hop artist, again has tweeted numerous times, but his best one,

call me Bobby Bitcoin, and currently on Twitter, if you look up Logic's account, he is listed as Bobby Bitcoin. Of course, the big one was Aria Stark herself, Maisie Williams. On Monday, she tweeted, should I go long on Bitcoin? And guess what? Unsurprisingly, the whole community came out. Elon Musk saying toss a Bitcoin to your witcher in the comments. We were all having a party. We were all there. 900,000 people ended up responding to her poll with 53.4% saying no. But then she tweeted out, sorry, I did it anyway. And then of course, there's the financiers. And this was sort of a mixed bag. On the one hand, you had Jamie Diamond from J.P. Morgan reiterating his stance that Bitcoin wasn't his cup of tea, although they loved blockchain technology. On the other hand, Mexico's third

richest man, Ricardo Salinas Pliego, revealed that 10% of his liquid assets are in Bitcoin. He tweeted, Bitcoin protects the citizen from government expropriation. This came on Twitter after another tweet talking about how government-issued fiat was basically worth nothing. And in a response to a follow-up question from Dan Held, he tweeted that the other 90% the biggest portion was in precious metals mining. So for me, if you take all of this, it all comes back to that show that I did about Hoddle FOMO, about what makes this time different. People are coming to this market with the same narrative that so many of us who are listening to this show right now have. It's not about speculative get-rich-quickism. It's about feeling like there is a tectonic

shift in monetary policy, fiscal policy, the way that we see our responsibility to one another, the relationship between government and citizens, the relationship between corporations and government with money being the vehicle through which all of this flows. And that Bitcoin was designed for this moment. It is so encouraging to see these folks, regardless of what they did before or what they're known for, come into the space with the right idea rather than just the wrong idea, rather than just promoting whatever random ICO they got involved in. It's really, really refreshing, and it makes me feel like this time really might be different. Anyways, guys, I hope you are having such a great weekend.

I appreciate you listening. If you're having fun with this show, go throw me a rating or a review. It makes a huge difference, and I appreciate each and every one. But for now, I will just say thank you. And until tomorrow, be safe and take care of each other. Peace.