The Wolf Of All Streets - Can Bitcoin SAVE GameStop?! Huge Crypto Regulatory Changes Are Happening NOW!

Episode Date: March 28, 2025

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And Bitcoin save GameStop who's going full micro strategy, raising convertible debt to buy more Bitcoin. That's just one of the many stories that we have here today on the Friday five with MLW. Let's go. What is up everybody? I'm Scott Melker, also known as the Wolf of All Streets. Before we get started, please subscribe to the channel and hit that like button. I'm here broadcasting live from Bill Barheids living room. He's the guy who has always had the piano behind him.

I'm going to go ahead and bring on NLW also broadcasting from Bill Barheids living room. It's weird. We should just have been on one camera, you know? Yeah, it's the setup is actually complicated when you try to get two people in the same room. So I'm glad we figured it out. It is. I hope you're not getting echo through your mic from you screaming three, three feet away. But here we are, not for a piano concert, but to talk about the Friday five, all the things that have happened in crypto this week. I mean, we just sort

of have to always honorable mention price action, which continues to be about as pleasant as a long trip to the dentist. Stories are hilarious. You got spotty TFs report 10th straight day of net inflows. Yeah, it's great news. And then, you know, the next article is we have auctions expiring Bitcoin above 90k and then crypto slumps 4% on Trump tariff moves. But US GDP data helps markets recover. I mean, I've come to the grand conclusion that nobody knows what the hell is going on or where Bitcoin price prices going or why it is the price of this at any given time? Well, yeah, and then like five minutes ago, didn't we get a hotter than expected CPI print too?

So what's going on with that? I mean, that's gonna be coming in. I don't even know if that's good or bad. Yeah, exactly. I mean, one thing is good news. It's good news for the economy. It's bad news for market. If it's bad news for the economy, we might raise rates and that's there for good news

for risk assets. So here we are just in the doldrums of sideways miserable chop. Yeah, man, it is always we are always reminded that people in crypto hate nothing more than sideways. Like we would we are gluttons for punishment or excitement, but one way or another we would rather be either cratering or soaring and nothing in between. Well, this nothing in between is a purgatory that many cannot tolerate,

as you can see by people losing their minds, obviously on Twitter. But let's talk about the first official story of the day. And that is of course, assuming I can get it up here. GameStop saying some plan to borrow 1.3 billion to buy Bitcoin. We've got this tweet here. There's what the chart looks like after they issue decided to issue debt and made that announcement down 25% at one point. This is a pretty funny little meme we got going on here. But what's interesting here is that I was kind of traveling yesterday. So the day before I saw that GameStop was up like 14%

pre-market because they announced the strategy to buy Bitcoin, but then when they said they were going full micro strategy, you've seen the movie Tropical Thunder, right? Never go full. I don't think we'll have to quote that here. But even in 2025, never go full anything. But they went full micro strategy, raising the portable note and

down goes the ship. Yeah, it's so, it's very, very weird. I mean, you know, you're correct in the analysis, they announced that they were gonna do this. And they're sitting on this big old cash pile from, from cashing out at one of the one of the, you know, from cashing out at one of the recent pumps about a year ago, or I guess a little less than a year ago. I think that the market liked the idea of them spending some of that cash on Bitcoin, right? And so, stock rallied, it was up double digits, but then they decided to issue convertible debt to do it. And everyone is sort of left with the confused monkey meme of why do that rather than just spend the cash on hand. But look, ultimately I think that GameStop is not a company that does things sort of halfway.

They lean into their own memes and it seems like that's what they're they're thinking about doing here. I think that this is just the you know the the the poetry of this. This is the prophecy being foretold. I mean this was you know we had that quote from Elon forever ago that you know in retrospect it was inevitable. This feels like that, you know, times 50. So I don't know, I think it's a it's a match made wherever matches are made these days. But you know, I again, I think that markets are a little confused around the specifics of, you know, it was they thought it was one thing and they liked it. And then when it was a different thing, they didn't like it.

There's a lot of conjecture about this, obviously, because of the photo of the CEO of GameStop with Michael Saylor a few weeks ago. And so, as you said, the prophecy did come true. I guess it begs the question whether GameStop is a serious enough company for us to actually even count this as meaningful, or do we need a company that actually does something that's not a meme to adopt Bitcoin for us to start really talking about it as a serious treasury asset. I mean, I think in the eyes of Wall Street, even strategy at this point is a bit of a meme, right? It's obviously not the business software company

that's successful in just adding Bitcoin to its balance sheet. This is their entire strategy. If GameStop follows the same, do you want to really be the second doing it? Yeah, I mean, look, I think GameStop has a bigger business than MicroStrategy did when it got this thing started, right? It was still $5 billion a year or whatever in revenue. And the other thing to note is they also did report like 4X what Wall Street expected in terms of revenue or profit rather. So, there were other reasons besides just the Bitcoin announcement

that their stock might've been going up. But I think that it's pretty clear that this is still in the realm of the meme side of the Treasury strategy. There was an interesting recent argument recently. I can't remember if it was Matt Hogan or if I'm just attributing all interesting analysis to him right now. But someone was arguing that the actual, the main impact of the BSR was less likely to be other governments

immediately kind of, you know, getting in the game and the game theory happening that way. And instead it being a removing another kind of lingering you know, getting in the game and the game theory happening that way. And instead, it being a removing another kind of lingering impediment, when it came to the Treasury strategy, right, like legitimating Bitcoin as a Treasury asset that was likely to be taken up by, by, you know, public companies faster than it was by government. So, you know, look, I think that we're likely to see more of this. I don't think that MicroStrategy is, I think that they've made it so that you can't really completely copy their approach, right?

That sort of, you know, they've on the one hand, evangelized, but on the other hand, blocked off barriers, because there's just not that much room for multiple of these types of companies. So, you know, it'll be interesting to see. I think GameStop is a little archipelago ecosystem unto itself and ultimately what it's gonna care about is what, you know, makes sense to it

and what makes sense to its legion of still kind of committed shareholders. The GameStop folks might not be as loud as they used to be but they have not gone away. They are- Oh, we saw that when roaring kitty came back. Absolutely. It is it. It of all stocks has the most crypto like following like, you know, there is a floor put by, you know, the people who just like the stock and and I don't think they're

going anywhere. There are people in the comments who don't like us being in the same room. So I'm going to go ahead and move myself to the Doge with Glasses from Chatch ABT just for the moment. And we're going to move on to the next story, which is a lot more serious actually than my background would indicate. Although I think this is one of the best headlines I've seen in a long time. Crypto's favorite money laundry shakes the yoke of sanctions. This, of course, is about tornado cash being removed from the OFAC sanctions list. Absolutely huge news. You can see that it's been delisted. This is something that was very

important to the crypto industry and is actually happening. It turns out that code might be free speech here or that you might not be a criminal for simply protecting your privacy. So what's going on here? And are these guys still sitting in jail, even though the fact has removed us from the sanctions list? Yeah, so it's it's great news, but not as sort of unreservedly great news as perhaps it might seem at first. So the great news is exactly what it said that all of these addresses that had been previously listed on the sanctions list are now off. And that Treasury is acknowledging this challenge of how do we deal with the fact that we don't want North Korea using these assets while at the same time we don't want to penalize and kind of abnegate our own principles in order to get there. What makes it a little bit less fully robust in terms of the counter shift is the Treasury is not saying that that in print, they're not arguing or guaranteeing that they're never going to put anything with

tornado cash or a mixer back on the sanctions list, right? This is a very specific change that's happened in the context of these particular addresses that had been listed. It's not totally clear how far Treasury's conviction around this goes. It feels very much like they're in a uncomfortable kind of in between place. They are dealing with a court order, right? So there's some amount of this that was compelled and they're just trying to get ahead of it rather than fully having to be compelled. We have other parts of the government, the SDNY that are still pursuing criminal charges around this. So it is still an uncomfortable area. I mean, it basically, it does appear

that you're less likely now to be jailed as an American for just using these types of tools. But it is, it is, we're not out of the woods when it comes to real clear legal precedent for mixers and for this type of technology. So absolutely, undeniably progress, undeniably a good thing. But unfortunately, even more than some of the other, you know, kind of good news that we've had recently, still has a lot of caveats and asterisks around where it all ends up ultimately. I think we'll take it as a victory. Did you? I don't know if I got muted there for a moment, but having some technical difficulties.

I was saying, yeah, we won the battle, but far from saying we have won this war yet. Yeah, it's a W. There may still be Ls in our future. Look at the market, man. I think everybody's feeling the Ls at past, present, and future. But one thing that likely will not be an L is stablecoin legislation. It seems like the law is is hanging for the most likely thing we're actually gonna see. This is the US House stablecoin bill going live in a flurry of crypto activity on Capitol Hill,

of course, following the Genius Act from Hagerty in the Senate last week. And we know that there's multiple potential legislative efforts around stablecoins coming from both houses. Seems like there's a lot of consensus that something's going to get done. We just have to hope that that something is actually the kind of stable coin legislation that we're looking for. But this is pushing forward. Yeah, no, there's there is a

huge amount of intent from both parties to get stable coin legislation done. I think there's also a huge amount of intent to get market structure legislation after that done. There's just sort of more, you know, inherently more complication there. One interesting thing about stablecoin legislation this week, and I don't want to read too much into it, but Senator Kirsten Gillibrand was at the DC Blockchain Summit. Basically, part of her comments were effectively thinking oppositionally and antagonistically about what could happen depending on different ways of coming at the stablecoin legislation. Keep in mind, Gillibrand was a Democrat for common sense crypto regulation before other Democrats were. New York's Democrat.

Exactly. She crossed the lines to collaborate with Senator Cynthia Lemmis on their comprehensive crypto legislation when that was a very unpopular thing to do. So I think that you can very clearly count Senator Gillibrand and the list of allies. But there were a lot of her points that were being made that felt very banking lobby sort of talking points, right? She was basically saying that you know, it we probably shouldn't have interest You know yield bearing stable coins because that had undermined

Local deposits in local banks and you couldn't have mortgages with that like just these things that are very you know You've heard every type every time a new financial instrument that competes with people just putting their money in a bank comes up, it's this sort of argument. And what I couldn't quite tell not being in the room was how much she was saying, these are my concerns, versus saying, we're on the one yard line, and now is the right time to think about everything that could be and really like nail this. And, you know, it was clear that she was saying, we, you as an industry don't want to screw this up. It's really important. And if we have more screw ups, it's going to, you know, be a death knell for us. And I don't think that was, I think that I would, from afar, I took that sincerely as her actually

saying, we don't want to screw this up, you know, but it was still interesting to see at this late stage, those sort of older, tired arguments re enter the conversation. So I'm a little worried that we have kind of a, you know, an 11th hour surprise coming in terms of some of the specifics of stable coin legislation. But you know, we're in a better position to have those debates now than we were at any previous point in the past. So I'm sure we'll figure it out.

A lot of what you just said echoes as a side note, some personal experience I'm having I'm out of town with 13 of my friends from college. So you're talking about basically 13 guys who are almost 50, most of them Wharton graduates who are in some way, you know, on Wall Street or were on Wall Street. And we got, of course, into the inevitable crypto conversation yesterday. And I can tell you that the sentiment from all of them is Bitcoin has been legitimized, but all they see in the media or think is that the rest of it is an unregulated speculative casino that's gone off the rails.

And I think that her view know, her view kind of echoes not what we think when we look at the utility and the true use cases in this, obviously I've tried to set them straight, but it feels like we have Bitcoin and then even the legislation that we're looking for and other things might go the wrong way because of a view that this industry isn't serious.

Yeah, I mean, we're not necessarily making that a lot easier on ourselves. At this stage, I will say that it's been interesting, you know, I kind of had it felt to me like when the Ethereum spot ETFs got approved that Wall Street might comfortably settle into this sort of notion that with Bitcoin, they had exposure to the digital gold narrative and with Bitcoin, they had exposure to the digital gold narrative and with Ethereum, they had exposure to everything else, right, all the smart contract stuff. And it seems so far that Wall Street just doesn't care about exposure to the non digital gold narrative at the moment. And I think that what you know, the experience that you just recounted is sort of reflective of that.

And I think that what you know, the experience that you just recounted is sort of reflective of that. Yeah, I don't think the news that BlackRock is tokenizing assets on Ethereum even hits their radar. Yeah. I mean, it's important to us. We say, look, all these things are happening outside of Bitcoin, but that's an in one year out the other story because either they don't care or they just don't even understand enough to want to pay attention to that. So maybe that's a narrative that we're still early, right? But I still have

my doubts that when a, you know, Doge or Trump or anything else ETF drops, there's going to be much institutional interest in those things right now. Yeah. I mean, look, I think we were talking about this before, you know, we're just still, we are uncomfortably farther setback than we'd like based on the shenanigans of 2022. The institutions have been willing to move on as a whole and not really care that much because there's money to be made and they were structurally denied playing in this playground for a while. But when it comes to individuals, most of their attitudes are still sour, you know? And it's going to take more time. Important to remember that our president launched not one but two meme coins days before he

was inaugurated. And then the Bybit hack was very much on people's radars. I think that's been understated. But I can tell you they all said, well, Risi has a lot of good news about Bitcoin, but then a lot of hacks and scams and meme coins. That's what they said. Yeah. Yeah. It gives me a good window into the problems we need to solve, at least from a narrative

perspective. Some more good news here though. OCC ceases examinations for reputation risk and then to follow that, USFDIC moves to put an end to reputational risk following criticism from crypto industry. This is another banking and operation choke point 2.0 story. Choke point 2.0. What do you make of the reputation risk, reputational risk story? What does this mean? Um, it is, it's, this one is basically sort of, you know, unmitigatedly positive. The whole reputational risk idea was sort of a circular argument that you could use to as a, as a bully cudgel to get people to do whatever it is that you, that you didn't want, right? You say the thing

that you don't like creates reputational risk, which means that people can't do it, because there would be more reputational risk. So it's basically an act of self-fulfilling prophecy to say, you know, in our case, crypto is reputational risk. In previous administrations, it was, you know, pornography or guns or whatever it was, right. So basically, they say, you know, if you do any of these things, there's reputational risk. So don't do those things. And people say, Well, I'm not going to deal they say, you know, if you do any of these things, there's reputational risks. So don't do those things. And people say, well, I'm not gonna deal with that. You know, what we saw with Operation Choke Point

is that banks are creatures of opportunity and it doesn't take much for them to say, screw that, I'm not gonna deal with that particular set of things. No one's gonna stand on principle on these issues. So this is the huge upgrades to just kind of get this out of the window. Also for beyond crypto, right? This is something that we have literally seen it deployed for other purposes other than targeting the crypto industry as a way to kind of, you know, to delegitimize a legitimate or at least legal industry. And so very, very positive overall, kind of leaves the Fed being that the hanging chat of bank regulators when it comes to unwind of Operation Choke Point 2.0. I can just tell you that from talking to my friends,

I'm still suffering from reputational risk as a result of crypto. So maybe it's good that the government's not doing it, but I would have thought that here in 2025, it would have improved. But this is, to your point, very very important even outside of our echo chamber, which is the only way that we focus. This is just common sense.

But this needs to be removed from the banking regulators toolbox. And I think that as you said, we can cheer this as an unmitigated success. Another story here, Abu Dhabi's financial free zone signs, MOU with Chainlink for tokenization framework. That's a memorandum of understanding for those who don't know. I recently interviewed Sergey

from Chainlink and he had me exceptionally bullish on the future of tokenization. And it seems that this is really starting to bubble. Whether the Wall Street guys understand it or not, this is yet another case where we do see real utility and the importance of this industries on the forefront with a major company country. Well, one of the things that's interesting about tokenization is that if you remember way back in the hinterland days when we were still dealing with Operation Chokepoint 2.0 and we were wondering what the next, you know, what the narrative, the positive narrative of the next cycle would be. This is also like sort of before Bitcoin spot ETFs. Real-world asset tokenization was the odds-on favorite for

that, right? It was the thing that everyone was talking about as the likely next big narrative. Now, the challenge with tokenization as a narrative has always been that it is not obvious or intuitive to people that simply tokenizing other types of assets on a chain actually increases the value that the value accrues to the token of that chain. There's a bunch of leaps that you have to get to in terms of understanding how these systems work to get there, right? Otherwise you're just gonna,

well, it's just infrastructure. Like I don't care about Swift. Why do I care about, you know what I mean? Like there just infrastructure. Like, I don't care about Swift. Why do I care about you know what I mean? Like there's a there's, you know, whereas digital gold is very clear, it is a one to one proxy for a thing that has value, right? The token itself is the thing that is valuable versus the, the technology system that underpins it. So even if tokenization is a huge thing, I think it still doesn't necessarily a priority answer the narrative questions that come with it. And in fact, I think that there are a lot of folks on Wall Street who are 100% absolutely convinced and sold that of course everything is going to be tokenized on chain because

it just the opportunities that it creates for new types of instruments and new types of derivatives and, you know, new type new modalities of trading, like, that's a sandbox that every Wall Street person is going to want to play in. Like, obviously, we're headed that way. Certainly, this is kind of Larry Fink's attitude with this, with, you know, like, to him, it is so clear that it's 100% inevitable. Again, it doesn't necessarily mean that that there's clarity around how that, you know, creates value for the chains underneath. But this is this is this is this sort of world moving forward, right? This is, you know, creates value for the chains underneath. But this is this sort of world moving forward, right? This is, you know, it's Abu Dhabi continuing

to try to aggressively place itself as a key hub for this sort of new crypto economy. So again, really positive thing that I think, it wouldn't surprise me if in six to 12 months, we look back and say, Hey, there was an interesting tokenization story happening quietly that whole time, but we were so focused on the spotty TFs and the meme coins and Trump and all these sort of things that we didn't see this sort of seismic infrastructure shift that was actually in its early innings then.

I agree with that take that the adoption of the technology for this purpose is superior and therefore inevitable, but that doesn't mean that for your average person, it's going to be investable in a way that they're used to in crypto with some sort of guaranteed profit, right? That it's going to be spread out exceptionally far. Sergey's point when I talked to him was that he thought crypto adoption on its own maybe has another two, three X in people who are going to come here and speculate and play in this sandbox, but that bringing tokenization is a 1000 or 10,000 or 100,000 X to what can be done with the technology coming in from the other side.

Because once you tokenize things and people realize how powerful it is and that that's a superior way to transact and to exchange value, every asset will end up on the chain. But that doesn't really mean that a bunch of crypto natives are going to profit from it. Well, I mean, this is the interesting thing. Like, if Wall Street gets there, it's like the value proposition is no longer about the speculation, it's about gas fees and you know, whatever, like the ways that these chains actually are economically designed to make money from that activity. And so the funny thing is, is that it actually gets it right back in the realm of something that Wall Street can understand. It's just that so far crypto has been so tied to like, what is the actual value of the token

itself, the end unit token, not as a productive asset, but just as the thing, right? I mean, we've spent years arguing, at least, you know, I have that, you know, the sort of the pet rock version of Bitcoin is like, its point is to be a pet rock. That's fine. If you're looking at it as digital gold, it's allowed to be that that's not a dismissive thing that is doing exactly what it's supposed to do. It's holding your holding your value, you know? You know, and I think that there's a, but there's always been this bifurcation between, you know, is the token the thing or is the underlying technology the thing? And ultimately, I think it actually is a better financial story if Sergey's right, and we have a thousand times the activity because that the business model is implicit, and it just actually makes money, and it actually is valuable in those ways versus it just being, you know, people betting on that being the inevitable future.

And so kind of, you know, trying to price it in now and speculate early. Well, Petrox actual ones have held their value better than most of the things not named Bitcoin in my portfolio. So maybe I should start investing in those once again. We had a few honorable mentions here as we sort of come to the end. Of course, the US SEC holds crypto task force round table as Trump plans regulatory revamp. And even to further that story, you can see the schedule here,

but there's four more of them through May that are already being planned and hosted. So very clear once again that the SEC, and maybe that's a proxy for the entire administration and legislators and regulators are looking at this industry seriously and actually talking to experts and leaders in the industry for feedback on how to move forward. Just really encouraging and once again one of those zoom out and remember where we were at 18 months ago situations.

Oh my god, if you if you look at Hester Purses speech from the blockchain summit this week, it is like the 2000 words of you know, every single sentence is another to do list item of how they make it work better in the future and how they deal with regulatory overlap. I mean, it is, it's almost it's boring in a lot of ways, because it's not big, but best six speeches about how they have to change and, and things like that. It is just like, Alright, so how are we going to deal with the CFTC and the SEC having similar jurisdictional issues here, like point 1.2.3. No more time to explain that because I got 50 other things like, and if you actually take a step back,

it is so it is so action-oriented. And I think you see that in the roundtables too. The roundtables, unlike perhaps White House summits about crypto, there was a detailed agenda with very specific stuff. And I think that if you're looking for the actual positive actions, that's where you should look. A hundred percent agree. And while we're talking about legislation and regulation,

we've got rep, emmer and soda reintroducing securities, clarity act as Congress eyes crypto legislation. So important to remember that stable coins may be the low hanging fruit, but this is somewhat a precursor to market structure, which I think could be even bigger when it comes finally defining what these assets are, what baskets we can put them in and how companies can move forward in that context. So nice to see that we're moving forward basically in every arena. Yeah, I mean, and this one is the most valuable thing to have as its own focus as well,

because if we could get nothing else done, but we could for once and for all, get clear on securities designation and figure out actually how to allow for securities like behavior in some cases with clear guardrails. This is the lingering question, has been forever. It's the number one thing. And any market structure legislation that doesn't deal with this will be incomplete. And, and so, you know, I think Emory & Soto are doing two things simultaneously. One, they're trying to shape that part of the conversation, which is so important. They don't want to wait, they want to get it going right now and want to actually try to like, have their vision of that. You know, they want to plant

their flag. But two, they're also hedging. If you can't get the whole market structure thing done, you got this thing that you can fall back on and it wouldn't be a bad consolation prize to at least get that through. I agree. And the final honorable mention story here, Ripple to get 75 million of court ordered to find back from SEC drops cross appeal.

This was one of those interesting scenarios where we saw the SEC continually dropping every single case or decide not to pursue them, including I believe crypto.com just in the last couple of days. And here we had Ripple kind of negotiating behind the scenes for a better deal when they saw the way that the winds were blowing and looks like that's exactly what

happened here. This is dead and they got some money back. You know, throw a big party guys. We're waiting for our invites. Yeah, seriously. Well, apparently that was the White House crypto summit. It didn't look like a very fun party to me guys. That's all we've got for you today. a very fun party to me guys. That's all we've got for you today. And LW are gonna go and I are gonna go have a dueling piano concert in the back. It's gonna be amazing, but we're not gonna broadcast it for you.

I'm sorry. Give NLW a follow on X and check out the breakdown. That's all we've got for you today, man. Thanks and see you next week. Later guys. Let's go. week. Later guys.