The Wolf Of All Streets - Bitcoin Gets Military Backing – Circle Explodes, Uber Goes Crypto?

Starting point is 00:00:00 A strategic Bitcoin reserve has backing from the United States military. According to Cynthia Lummis, the Circle IPO went absolutely nuts. It's even trading up massively again today. Pre-market Musk and Trump are fighting like school children in the public square. Uber wants to adopt stable coins. So much has happened this week. Good luck. Thing we have NLW here to unpack it all for us on the Friday 5.

Starting point is 00:00:22 Let's go. We're gonna absolutely get right to it today because we have a lot to talk about. Good morning, sir. How are you? As a better better than a lot of folks out there right now. Things that things are great. Excited to chat. It's not a boring one this week. I'll tell you that. Now I want to start with Circle because holy wow, man, this thing was being offered on Robinhood and in pre IPO shares a day before 27 to 29 bucks ended up closing the day yesterday after a huge dip trading at 83 but trading at 96 basically right now pre market I guess it's fair to say that Circle had a successful IPO here and successful for no one more than Jeremy Allaire vet on the show quite a few times who now is a casual billionaire I think think $1.7 billion after this IPO at current prices.

Starting point is 00:01:26 He has played the long game for sure. I mean, it's hard to remember for people who weren't around. People did not think that he was making a good move when he shifted circles focus to be entirely about stablecoins back in 2018, 2019. I think Alex Thorne from Galaxy Digital even said, you know, he was recalling when he was told about it. He was like, that's an insane idea. What you're making an incredible crazy mistake. And now here we are. I mean, look, I think circle is, it turns out that the story that everyone is

Starting point is 00:01:56 paying attention to wasn't the important story, right? So there was a little while where everyone was analyzing circles financials, right? It was how much rev share they're giving to Coinbase and how it compares to tether and yada, yada, yada, right? That was sort of layer one of analysis. And that's when things didn't look like they were going to go that well, right? That's when we started to have rumors of, you know, reports of ripple and Coinbase potentially exploring acquisitions and, you know,

Starting point is 00:02:22 comparisons to the failed SPAC in 2021. Right. So that that was sort of like one layer of analysis is circle as a company as it stands right now. Second layer of analysis, which started to take over clearly was momentum and an open moment window for crypto IPO is in general, etoro obviously was the key catalyst and shifting this narrative. But it was it was very clear that there is sort of was an IPO window open. I think it's got artificial pressure and compression right now, because, Mark, you know, no one has any belief or trust in how long

Starting point is 00:02:51 there's going to be a good IPO window. And so there's a little bit of that energy. But neither like those things do not, like the shift between those two things does absolutely does not explain this. What's clear that what their roadshow bankers missed and that what the analysis missed is how much demand there was for exposure to this category that doesn't really have other good options. This is not even really a circle story except in so far as circle has very adeptly and adroitly over the last five years positioned itself as the US, you know, private domestic stablecoin. This is stablecoin demand, right? There's very clearly being expressed is a belief

Starting point is 00:03:35 that stablecoins are going to be key financial infrastructure, monetary policy infrastructure. And look, you know, someone had a great tweet, I'm apologies for forgetting who it was. But they were comparing market cap to volume processed. And it was like, you know, PayPal is like a $70 billion market cap at 1.5 trillion processed. Visa is 500 billion at 14 trillion processed. And circle was like 6 billion at 12 billion process, right? There's just behind, you know, and so there's a disparity there and the market clearly is seeing that, you know, so I do not think I guess is that TLDR here, that this is just exuberance of an excited, you know, IPO window, I think

Starting point is 00:04:23 that this is category bet. This is the equivalent in the stablecoin space of the BlackRock Bitcoin ETF basically. Absolutely. And I think the timing was just perfect to your point. And nobody's ever been more excited in hindsight that their SPAC listing failed than Jeremy O'Leary right now for, for, for a circle,

Starting point is 00:04:47 because that would have probably been a disaster at that time and poorly structured. And now you have this oversubscribed massive success. And likely, as you said now, just to carry momentum for other IPOs and for the crypto industry as a whole. I mean, and you talked about sort of this tailwind for stable coins in general, I just want to touch on this quickly, but Uber malls using stable coins to reduce currency costs. Right. So, I mean, and you talked about sort of this tailwind for stable coins in general, I just want to touch on this quickly. But Uber malls using stable coins to reduce currency costs,

Starting point is 00:05:07 right? So I mean, we're on the grand stage now. Yeah, I mean, look, the the other piece of this from a competitive aspect is that circles life gets nothing but harder from here. And everyone knows that. And in fact, that was another reason that people were skeptical of the IPO. But they have put so many more points in the self fulfilling prophecy column, because of like they now have institutional momentum in a way

Starting point is 00:05:32 that is going to be extremely like already they were going to be tough to dislodge given how anchored into existing stable coin infrastructure where that mean they are, you know, on shore stable coin infrastructure, you know, period full stop. But the fact that they now have this port of momentum with this buy in from Wall Street means that all these sort of, you know, Johnny come lately stablecoins that are going to come next, their tasks just got a hell of a

Starting point is 00:05:57 lot harder. So not only was this successful from a financial standpoint, it makes circles's success for the future look a lot more likely than it did even two days ago. I agree. And listen, the only thing that may have overshadowed a story like this on a day like yesterday is of course that Trump Musk's spat sees Bitcoin tumble liquidating 308 million in longs.

Starting point is 00:06:20 I think we all know that Bitcoin bounced right back after anyone who was dumb enough to sell their Bitcoin because Musk and Trump were arguing, decided that that was probably a bad idea. But clearly, this was like the fastest turnaround ever. I don't know if you saw that Jim Cramer actually tweeted, I think literally yesterday that he loved the bromance between Trump and Musk. And of course, then they started fighting.

Starting point is 00:06:40 I mean, unbelievable. But I mean, Musk, full squirt shirt here, as I said, Trump's going to cause a recession. He should be impeached. He's in the Epstein files, like the insane bomb after bomb after bomb. Here you go on the recession. And then of course, it just escalated to Trump responding, saying that his patience was wearing thin, that Trump, that Elon basically lost his mind when his separate subsidies were not included that he'd already seen the bill. You can see here that the easiest

Starting point is 00:07:09 way to save money in our budget, billions of billions of dollars to terminate Elon's government subsidies and contracts was always surprised that Biden didn't do it. Okay, you get the idea. And on the tail end of this spat, we're just gonna do everything Trump sees in the CIS letter, we'll talk about the ETF, we're just gonna knock it out sort of in one, one big trunche here. Yeah, so okay, so let's, let's actually go back to before the the explosion, which I will quote Elon himself, in retrospect, it was inevitable. But what we had all week leading up to this was to couple things, actually, three things happening in and around the Trump organization as relates to to crypto. First of all, we had just absolutely deepened engagement, you know, just a flag planting left and right, that

Starting point is 00:07:57 screw you, Democrats, screw you, criticism, like they were going all in, right. And so truth social applying for the ETF, which notably and interestingly, did not use the Trump name, even though everyone knows who owns true truth social, maybe some amount of sort of respect for the political process going on. But, you know, filing for an ETF was one. Lots of debates around that, obviously, like what you know, where the where the value of the 12th ETF is I thought those analyses were you know a little short-sighted like everything's about brand and this is a big brand and this is you Know they have a captive audience of people who might want their version of the ETF not black rock

Starting point is 00:08:36 So like you know, I think that there's a you know, conceptual argument for it at least so you had that going on But then you also had this spat between the Trump media organization and Magic Eden, because Magic Eden came out and said, Hey, we've got the official wallet of I don't even know exactly what the phrasing was. But basically, it appears as though the folks behind the meme coin, or collaborating with Magic Eden on something and the Trump Organization went off, Eric and Don just just dumping on Magic Eden threatening lawsuits all day on on Twitter. And interestingly, hold aside all that it the Trump or Don and Don Jr. and Eric had clearly made a decision some point over

Starting point is 00:09:20 the last few weeks, few months to start moving back away from from from the meme coin. They were on a squawk box or something earlier this week where they were explicitly kind of talking about their Bitcoin investment, the ETFs, you know, their mining investment, things like that, not not the meme coin and kind of trying to disavow that whole piece of thing. So it came at a time when they were explicitly trying to remove their association with that particular side of things.

Starting point is 00:09:48 You know, meanwhile, Democrats are just, you know, going off on their side, we'll talk in a minute about some of the more the specifics of the market structure bill. But the point is that coming into this spat, we really were seeing Democrats even even nominally pro crypto Democrats really really having trouble getting behind any sort of crypto legislation right now, because of Trump's involvement. We know that the Trump family's involvement with with crypto. And so here's the interesting question that I don't exactly have an answer to. But it's what I'm thinking about sort of in our context for this whole Elon Trump spat, does it is there like, how

Starting point is 00:10:27 could it be good for for Bitcoin and crypto, right? And so I think that there is a possibility that a weekend, not like a impeached Trump, but a slightly weakened Trump is actually a net positive for crypto, at least policy to get through. Because to the extent that crypto policy is no longer a Trump administration and Trump organization forcing it through despite conflicts of interest, but is instead sort of a common sense bipartisan thing where Trump's political capital has been sidelined

Starting point is 00:11:03 as the main political discourse for a little bit. Like, it seems to me that it could be positive on that. Right now, way too early to tell, you know, chaos can go either way. But I don't necessarily think that given how much Trump had become the barrier to crypto legislation, a weakened Trump could be good if you are going for crypto legislation. So we'll have to see how it all shakes out. If you're throwing on tinfoil hats for speculation, I think there's also the chance that with Elon making such a big stink about this bill and about fiscal responsibility and about

Starting point is 00:11:38 the national debt and showing that that's what he really cares about, that he also comes back to Bitcoin to some degree. And I think that that also could be a net positive. I mean, he's out there screaming like a Bitcoiner and all the things that Bitcoiners have been screaming about the government since inception. So it wouldn't surprise me to see him come back. Honestly, like the most entertaining thing of all of it was me in my mind imagining like what it was like in the newsroom at CNN trying to figure out who to back and how to cover this story Yeah, just must have been exploding. Did you see Zack Foles tweet? One of one of our own crypto folks had had one of the I mean, there's a million. Oh his brother with the Tesla

Starting point is 00:12:17 Thousand light, uh-huh. Yeah Basically said now like it was a it was a screenshot of his brother taxi and saying now like Republicans and Libs are gonna Keep my Tesla. Yeah, yeah Literally perfect. I mean, so let's continue on with the Democrats I don't think we need to beat this feud to death that it'll probably get resolved in some way shape or form But good entertainment at the very least but we have Dems say they're blocked from info on verge of crypto market structure bill hearings as the house is about to discuss its crypto market structure effort hearings staff or democrats said the sec has shut them out from technical information and he got screaming maxine waters angry maxine waters she's gonna be like

Starting point is 00:12:53 crying jordan with this picture yeah so the couple couple things here a few days ago uh there was supposed to be sort of like a technical assistance hearing around this bill which is basically where the sec makes itself available to explain specific parts of the bill. And this is supposed to be not a partisan thing, right? This is just entirely mechanical, historically speaking. And the people they brought to that conversation basically had no idea, according to reports. I mean, Democrats called it sort of the worst technical briefing bill that they'd ever heard. And in ways that like, you know, look, everything, you have to you have to you have to have a pound of salt with any political discourse at this point. However, you know, watching when they're scoring political points, and when they're just like actually saying things that they think. And when it came to their descriptions of just how bad and how useless this technical briefing was, as a matter of policy process, it had the air to me of just saying what it actually was right that it's like, the people just didn't understand this thing.

Starting point is 00:13:58 It's a 200 page market structure bill feels like it's being rammed down people's throat, they have no idea they just don't know what's actually in the bill. In fact, you know, there were a couple hearings then, later in the week, house ag and House Financial Services Committee, and no one was prepared for for actual substantive discourse. Now, debate on whether they would have had any sort of substantive discourse, even if they had been prepared. But you know, it's a mess right now. And even more so than the normal. They had been prepared, but it's a mess right now. And even more so than normal, no real progress seems to be being made on this market structure bill.

Starting point is 00:14:30 And frankly, there is not the political capital for Republicans to just drive this through right now. In fact, everything is up for grabs now. I mean, obviously the big legislative focus is not on crypto bills at the moment, it's on the big beautiful bill, which has now become, you know, the the the flashpoint for all of this. So I don't know, I think that it feels to me like we're in the middle of a very liminal period,

Starting point is 00:14:55 there's going to be some amount of political resetting, how different it looks than you know, two days ago remains to be seen. But I don't think we can know exactly what the sort of destiny for crypto policy is until we have a little bit of a settling of some of these bigger, you know, kind of core fights around the around the budget bill. Shockingly, we are not the most important thing on the docket all the time. Yeah, well, hard to accept. I know. So listen, the

Starting point is 00:15:21 title here says Bitcoin gets military backing that is based on the lovely Senator Cynthia Lummis saying that the US military now supports her plan to buy 1 million Bitcoin. Of course, as she said that we get JP Morgan saying that this is a terrible idea. We should stockpile missiles, not Bitcoin. We actually have both videos. They're really quick. So just go ahead and show what both of them said. It's drones, planes, etc. What do you say to critics like Jamie Dimon who say this is So just go ahead and show what both of them said. important to have strategic Bitcoin stockpile because we're doing an economic war with China and we have to prepare for a guns and bullets war but we need both and so all we need to do is look to the leadership of the current... Did I get the idea now? The section between industrial policy in this country and national security, which sort of gets at what you're

Starting point is 00:16:25 talking about with some of these different industries. And it's spanning the last couple of administrations. Everybody devils in the details in terms of how the policies shake out across administrations. But I guess to that point, do we need to rethink what constitutes national security? I wouldn't rethink it. We know what constitutes national security. We need, you it. We know what constitutes national security.

Starting point is 00:16:46 We need, you know, I was saying we shouldn't be stockpiling Bitcoin. We should be stockpiling guns, bullets, tanks, planes, drones, you know, rare earths. We know what we need to do. This is not a mystery. Did you say stockpiling Bitcoin? I said we shouldn't be stockpiling Bitcoin.

Starting point is 00:17:00 Oh, shouldn't be, okay. We should be stockpiling bullets. Never miss a chance to take your shot at Bitcoin in a completely unrelated way for Jamie Dimon here, right? But listen, it leads into the next story about JP Morgan, but let's just briefly touch on this. I mean, one, in my head, I see, I'm gonna use AI to make Cynthia Lummis answer that question by saying, what I would say is shut the hell up, Jamie, instead of this very diplomatic response.

Starting point is 00:17:33 Very casual conversation about a kinetic war with China as an aside by everyone, apparently. Also, how much bullets are going to be the tools of fighting in the future is another another big question. are going to be the tools of fighting in the future is another, another big question. Look, I think that the, the story has nice headlines from Lummis with this military backing, but it's literally just this errant comment that, you know, that, that, that it back. I think that the subtext of this and the thing that's sort of true is that I think that there is a that's sort of true is that I think that there is a larger conversation and reevaluation of what national security looks like in the future. And it does include economic dimensions. And it's not just Bitcoin. It's also about the status of the US. I mean, how we use the US dollar as a weapon. I did a whole show this week, or I guess it's actually coming out on Monday, about sort of changing perception worldwide of, of how in play foreign reserve assets are as a tool of, you know, diplomacy and, and foreign warfare. You got Europe talking about freezing

Starting point is 00:18:34 Israel's, you know, the 55 billion in Israel's foreign reserves, right? And that's, this is now becoming increasingly normalized. That is a change. So the short of it is that Jamie Diamond is wrong. National security is not the same as it was 20 years ago. Anyone who thinks that it is is not paying attention. Whether Bitcoin has a stake at that table is a total, you know, reasonable debate between reasonable people. But, you know, he's he's on the as usual, he's on the wrong side of things. And, you know, continues to be more so. But I think where you're going is maybe watch what they say, not what they do. Boom. The best segue in the history of the show. JP Morgan plans to offer clients financing against crypto ETFs.

Starting point is 00:19:13 So interestingly, we know that they've offered Bitcoin and crypto trading services to their high net worth clients before, but they were pretty behind the curve on opening that door to all of their clients, which they've announced they will do over the past couple of weeks. We've covered that before, but they're a bit ahead of the curve actually here by allowing their clients to take loans basically against their crypto ETFs. This to me is like the biggest story being undiscussed because we've long said Bitcoin will become just like any other financial asset in your portfolio. And this is the end game of that.

Starting point is 00:19:48 The end game is when it's your spot Bitcoin, actually, to be fair. But that you can just put this next to your SPY or your QQQ and in your mutual fund, whatever it is that it'll be included and just take a loan against your whole portfolio. This is how rich people buy, borrow, and die or never have to sell their Bitcoin or their assets. And this is just, it's now part of your portfolio for JP Morgan. Yep. This makes the ETF say full financial asset, not just a cool thing. That's the new kid on the block in a huge, important way that the impact of which will be manifest over time. But you know, you, you, you said it exactly. And exactly. And I think that this was, you

Starting point is 00:20:28 know, look, to the extent that the argument is Bitcoin as pristine collateral, this is a part of making that pristine collateral actually, you know, useful. We've seen how good Bitcoin is for people who have structured their organizations to take advantage of Bitcoin, both in terms of its liquidity, its store of value properties. But this allows people who have the proxy exposure to Bitcoin, visa, visa, visa ETFs to have that sort of same impact. So it's extremely important for the evolution of this as an asset class. And as we said before, Morgan is always important to watch, particularly JP Morgan, what they say and not what they do. And I think the question for Jamie Dimon always is, is Bitcoin in the room with you? And what is it doing to you? Hey, literally like show me on the doll. Bitcoin touched you. It's wild. And what a perfect way to end the show. That was a great quick Friday five. I think we cooked through it all. It's

Starting point is 00:21:22 gonna be interesting to see how a lot of this shakes out, especially the Elon and Trump spat. Hopefully, honestly, I think it's in everyone's best interest beyond the entertainment value and proving that the simulation has a sense of humor, that that calms down and is resolved with time. Guys, give the breakdown a follow and a listen every single day and give MLW a follow, of course. Otherwise, I guess we'll see him next Friday, man.

Starting point is 00:21:45 Thank you very much. Later, guys. Let's go. Let's go.

The Wolf Of All Streets - Bitcoin Gets Military Backing – Circle Explodes, Uber Goes Crypto?

There aren't comments yet for this episode. Click on any sentence in the transcript to leave a comment.