The Wolf Of All Streets - U.S. Government LIED About Buying Bitcoin? | Friday Five

Episode Date: August 15, 2025

Do the United States government lie about buying crypto? Some head scratchers of remarks from Bessent, the Treasury Secretary, may have caused the market to dip a bit when he implied that the United States government has no intention of buying more Bitcoin, this alongside a whole lot of other news to unpack. We've got NLW here for the Friday 5. Let's go. We've got a lot of news to cover, as usual here, maybe a slightly slower week, but still a crazy news cycle, especially for August.

Here we go. Let's just dive right into it. We had Bacent Bitcoin drops below 119K after U.S. Treasury. Security rules out new Bitcoin buys. Here is exactly what he said. We've also started to get into the 21st century of Bitcoin Reserve. We're not going to be buying that, but we're going to use confiscated assets and continue to build that up. I mean, that was a questionable remark. He obviously quickly went ahead and corrected it later, which we can discuss. But he did say, we're going to stop selling Bitcoin. I believe that the Bitcoin Reserve at today's prices is somewhere

between 15 billion and 20 billion. So actually a lot to unpack, gave us a bit of confirmation as to how much Bitcoin the treasury might hold, but also some wishy-washy thoughts here on what that reserve might look like in the future. It had the feel of like a parent who has decided to tell their kids one thing, but forgot exactly what they were going to tell their kids, but was basically like just stop asking me about this because basically it sounded like he that it was almost it was if you listen to the actual interview it was a total throwaway line it wasn't like someone was like hey are you going to

keep buying it he just kind of said it nonchalantly like no we're not going to keep buying it and then moved on and everyone was like wait hold up and then for the next 24 hours you know the entire bitcoin world came with pitchforks and he you know corrected it i don't know it's very it's very hard to tell what's going on um it seems like there is there's sort of this vague notion of looking for budget-neutral ways to acquire more. But that's also pretty clearly not a priority. I think that if we are looking for positive signs, it's that they're not going to sell more. But it's certainly not the full-throated, like we're going to go out and try to buy as much as we can.

Yeah, and with Bo Heinz gone, we don't know who's going to bull post and bull comment all day about strategic Bitcoin reserves. I saw some terrible takes that were like, now we know why Bo Hines has left. I mean, give me a break. I don't think Bo Hines took his like four months of government duty into a high paying private job and left because of a strategic Bitcoin Reserve. But it is just interesting that now we got that somewhat clarity on how much Bitcoin the United States government might hold or at least that vague comment about it. It just also has this crazy element of we're going to confiscate a bunch more Bitcoin from people in the future. We're going to keep that.

are you very libertarian and very uh you know uh very within the ethos of bitcoin the interesting thing about the strategic bitcoin reserve conversation has always been that like it has these very weird bedfellows sometimes in the same person which is like are we excited about this because it's the U.S. government pumping our bags which let's let's not be cynical that's awesome right uh or are we excited about this from some assessment of like U.S. is placed in the world where we think this is important right you hear Cynthia Lummas talk about this She's clearly thinking about it from the standpoint of U.S. success more than bag pumping, right? But others obviously are just thinking about what it's going to mean for price.

And they're very different positions, like wildly different positions on this thing. Yeah. I think it just indicates that this isn't the number one priority for the United States of America, even though we would love it to be. And we're probably not going to get a lot of clarity anytime in the near future. And that's fine because everything else has been going swimmingly for the, crypto industry. I guess we can get to pack further this slight sell-off that we've had here. We hit an all-time high, obviously. It lasted about 12 minutes and all of a sudden woke up and

we were a few thousand below and went back into the 117s. Apparently, this is a huge deal. But we kind of had the double whammy. We had the percent comments in the morning and then the inflation print for PPI that came in a bit later that was hotter than expected. So, of course, the 100 percent certainty we were getting rate cuts in September. It was literally 100 percent now in question once again what will we do yeah it's interesting we you know we didn't we didn't we're not talking that much about the the sort of the cpi from earlier cpi was one of those classic cpi prints where it is a rorschach test for what you wanted it to say anyone who wanted to justify any narrative could find plenty in there to uh to tell their own

story that and so you know because markets want this cut so badly the story they told they decided to hone right in on the number that was better than expected right not the sort of like very in nuance that maybe suggests worse than expected unfortunately the pb i came around it was a little bit clearer in its signaling and dampened enthusiasm damp it you know basically gave powell more uh more justification to continue sitting on his hands and i think that that's just sort of you know rattled rattled markets in general it wasn't just bitcoin yeah i agree and we don't need to dive too deep into the macro we have other days to do that i think the next story is actually the biggest one of the week because of the potential implications for what it means.

Introducing ARC and open layer one blockchain purpose built for stable coin finance. This is Circle announcing that they're launching their own layer one. I think this one is the biggest piece of news, but we have to give an honorable mention along the same lines to stripe to build tempo payments blockchain with paradigm. So we have a number of private, public, traded companies generally announcing that they're effectively going to build their own rails for stablecoin. We know that Tom Lee has been relentlessly bullposting about the reason he wants to own an Ethereum treasury company and continue investing is because stable coins on Ethereum makes you scratch your head now when you think

about Circle having their own layer one. Yeah. I mean, I think that everyone is sort of a little a little head scratching right now about all of this. You know, on the one hand, it's not totally unclear why a private company would want to own the rails and sort of, you know, enjoy the benefits there from. I think Meltem DeMiris had a tweet that was basically like, come on, guys, this is completely obvious why you would want to have access to this. Like, what are we thinking? But the flip side is, and I think this is where, and to your point, why Circle hit harder for folks than Stripe, Stripe people look at and they're like, yeah, I mean, look, they're a fintech company. they weren't, you know, they, they are as pro-crypto as the regulatory apparatus around them allows

them to be, and no more, right? And so, fine, whatever. This is kind of the thing you expect from a financial institution that's not crypto-native. Circle, on the other hand, is crypto-native. They're supposed to get it. They're supposed to be a part of the sort of, you know, the ethos of the ecosystem. And I think even more than any sort of moral or sort of principled stance here, I think that a lot of people are just gaming this out to the scenario where, you know, this isn't, this is just a wildly balkanized, frustrating, you know, annoying system to deal with where all the benefits of crypto are basically out the window. And it's just, it's worse than the existing financial system. That's what people are frustrated about. It's not, again, it's not some like principle like you're not allowed to make money by owning, you know, the rails. It's that by, if everyone does this, it obviously leads to a place where the system just. sucks, you know, and isn't useful. It isn't good. It's more frustrating. And I think that people kind of are looking at circle and basically thinking to themselves, like, you guys should know better. Like, of course, this is where that leads if this is the decisions you make. But whatever,

it's the decisions they're making right now. And, you know, they're, they now have competing forces. They have to, you know, continue to keep markets excited about them. And, you know, the markets might not be playing out the same kind of game theoretical scenarios that all of us who are watching kind of the crypto space of all bar. Yeah, there's sort of a couple theme to unpack here for me. I literally just fired up chat GPT to get the actual numbers. So A, which is not that, is that this could, of course, compete with Ethereum. We could be seeing a battle for the heart of decentralization now, right? Will we have institutions choosing to use our beloved blockchains in a more decentralized

manner to build things, or are they all going to go with walled gardens, make sure that they control the transactions they make the money? In the case of Circle here, I've given this example a couple times. If you have 72-year-old Betsy, who's three years away from retirement, who's doing accounting for a random firm and has been told by her boss that they're going to be doing payments now in stable coins, and she sends $500,000 in USC to a Salana address instead of an Ethereum address, she can't call the Salana Foundation. Right. So from that perspective, I totally understand that Circle would want to galvanize here, create a more institutional great blockchain where they can actually help people who need the health.

help and are not native and have customer service and things like that. So I get that. And I think this is also, though, a way to mitigate the inevitable humongous losses that are coming when we get interest rate cuts. They need to find more ways to make money as a company to now justify the stock price. Right. And this is the numbers that I brought up. I mean, it basically says each 25-bip rate cut that we see will be about 100 million drop in EBITA, for Circle. In 2024, 98 to 99% of Circle's revenue came from interest earned on U.S. Treasury bills and other short duration securities back in USC. These companies, this stock is basically a bond with interest trade exposure. You're just buying interest trade exposure.

Yeah. No, look, I think it's, there is a real lived financial reality that these companies have to play in that's going to come at the cost or compromise potentially, you know, the things that we would like them to do. Yeah, I also wonder what it means for Coinbase. Our next story is all the things that Coinbase is doing, but we know that Coinbase, I think, makes about 55% of the revenue on USC. This could be a way for Circle to sneakily kind of detach themselves from that and make a little more money on their own without giving as much to Coinbase. But Coinbase, man, they are absolutely crushing it. We've obviously reported on this deal before, but it's closed. Coinbase seals Derbit acquisition and sixth deal of 2025. Crazy. But Coinbase also has been making news that

speaks to what I was just talking about, which is that we're going to have this battle between people building their own things or just using either existing blockchains or in this case, crypto incumbents, PNC Bank, JPMorgan, all saying we don't want to build this stuff. We're just going to use what Coinbase has and we'll have a partnership, that's what we're seeing a lot of. So I think we just are really in this interesting inflection point, but Coinbase is not stopping. They're going to continue to be in everything company and do it all over the world. Well, and that's interesting. If you take that Coinbase being an everything company lens and apply it to Circle, right? Like, again, people are reacting to this Circle news as though Circle is a

primarily a crypto-native institution that's supposed to in some ways uphold like those, of principles of crypto as opposed to just a generic external financial services business. And Coinbase is very clearly, and has been for a while, playing to not just be the best crypto-native institution, but to actually start to, you know, beat out FinTech at its own game in certain places. They're positioning for that. One of the big things we've talked about over the last, you know, number of months is that there's been a bit of a shift in balance where pre-Circle IPO, everyone assumed that Wall Street

was going to just come in, recreate all of these rails, do it themselves, and everyone was going to want to go with J.P. Morgan's version of the thing, you know, because it's, you know, the brand, right? But increasingly, as these institutions get more power, as market cap goes up, et cetera, et cetera, and as more of the traditional financial players throw their lot in with the crypto-native institutions, decide to your point to partner with Coinbase on something rather than going and doing it themselves, it creates more sort of momentum and strength in the crypto-native institutions who are managing this. And so if you take that lens to look at this circle thing,

it's like someone's going to build the, you know, I can call them up version of these rails. Do we want the, do we want it to be Circle or do we want it to be J.P. Morgan, who's building the I can call them up version of the rails. There's an argument that Circle, that someone was going to do it and it's better to have it be circle than it is to have it be, you know,

a Tradify company that doesn't care at all. But who knows? That makes a ton of sense. And I think what we're seeing on the other side here in my mind, is all of the exchanges trying to find an identity beyond just being exchanges. Coinbase obviously leading. But I would say we have basically Coinbase versus Robin Hood right now because, I mean, Coinbase, I think that's five times as many users actually as Robin Hood, which I didn't realize.

It's pretty crazy how much of a lead they have. But Robin Hood obviously already has kind of the everything app going on. And then we have the two of them as the new entrance that are going to then compete with the JP Morgan and Charles Schwabs and Morgan Stanley's. who wins the young audience and then who takes that audience into the future and replaces the incumbents. I don't think that that Coinbase would ever sort of vocally admit to not caring about the competition with Robin Hood and the competition for retail traders. But it also seems pretty clear to me based on what they're building and where they're prioritizing that they

definitely view JP Morgan as their competition more than Robin Hood, right? They are, you know, they're going after the sort of the biggest possible institutional plays. I mean, Deribet's a great example of that, you know, it's not just sort of, you know, access to more retail users. It's access to this, you know, a new set of instruments that are going to be appealing to a totally different type of group. Yeah, we've unpacked that, but the Deribet, it's way bigger than people can even understand, I think. Just the sheer size of Deribit and their market share of futures trading, but then also, as you said, just the licensing. You know, it's not huge in the United States, but they basically have just opened futures trading for the entire world for coin base.

Yep. The next story we've got to talk about is obviously something we've dug into in the past, which is crypto-adjacent stocks, effectively being the new alt season with irrational pumps left and rights. I'm going to throw this one out there as something I would, as much as I like Bullish, call a slightly irrational pump. Bullish stock ends first at $70 with 90% gain, given crypto exchange market cap above 10 billion.

So much like Circle, actually, I looked into the numbers, it's very, very similar. Circle raised about a billion dollars. They were about to launch, you know, between $28 and $32, had this massive launch IPO above 90, pumped above 100, and then settled in down below. They both basically did the same thing. But Circle, I think people expected because we just had the Genius Act going through. There was this wild appetite for exposure to stable coins. Bullish is not Coinbase or Robin Hood or even Cracken and pulled off the exact same move.

So is this just market exuberance, froth? What do you, how do you view this IPO? I view it as froth. I straight up. I mean, this is the clearest indication that we have disconnected and that anything with crypto right now is going to be rewarded. And that is an unsustainable situation, period, full stop. And again, there's no slight to bullish, like, you know, strike while the iron is hot, you know.

But there's nothing that justifies that that price, that pop, any of that in their financials. So they're sitting at around an eighth of Coinbase's market cap right now with 3% of their revenue. And it's not like this is like particularly desirable revenue where there's some clear path and it's just going to be unlocked. You know, the recent financial performance hasn't been particularly, you know, exciting. Where they sit in the sort of market and what they fit is like not particularly clear. to people. It's just crypto, name is bullish, go. And like I said, this is nothing to no knock on them. I would try to try to get as much as I can while the iron is hot as well. But it is definitely this is a 12 D chess or whatever we call it at this point. They just got public at the exact

perfect time. They captured the moment. I mean, imagine this IPO two years ago. I will tell you that Cracken is losing their absolute ever-loving crap right now, not being, not being public yet. That's exactly what Sid Powell said yesterday. He was like, Crackett and Gemini is like they got to get, you know, they got to start skating to that puck man because it is time. Yeah. Well, it's, I mean, unfortunately, I think that there's a, there are indicators that that it's, it is now past time. If, you know, Bullish has all the hallmarks to me of, um, the one that you look back on as a top. But, you know, look, these are not strictly crypto forces. These are, there's other types of exuberance right now. The market is extremely hungry for things like this.

Look, if, if there were, there's also a dearth of the theme that markets really want, which is AI, that they can buy. There's not like AI IPOs happen in every day. And so AI and crypto are kind of getting lumped together as sort of like the new frontier things and people are just buying whatever they can get their hands on. So, you know, it's, like I said, it's not, it's not the crypto industry leading the froth. It's, it's a broader market phenomenon that crypto is benefiting from right now. Yeah, we're in the middle of all this froth. And you have to remember, we also had a four-year frozen period of no IPOs, no come-to-market, no mergers and acquisitions. There was just nothing. I mean, we just had that Figma IPO, which was equally insane and has nothing to do with

crypto. Yeah, no, people are really, really hungry for liquidity. And, you know, people are excited to be back in this sort of period. But it's, uh, it, it looks frothy. Let's put it that way. Speaking of liquidity, BlackRock now holds over a hundred billion in crypto. Wow. And of course we have BlackRock buys 150 million in Ethereum signaling institutional confidence. I hate these headlines. I hate the way they're structured. I hate when people tweet and my news guys, I think they've done it once or twice. But we're like, Black Rock buys 500 million. Are you bullish? enough yet. And you're like, no, some people bought a bunch of ETFs and BlackRock then had to buy the coin and custody it with Coinbase. But no, Larry Fink is not like bullishly smash buying

Bitcoin for Black Rock's ballot sheet. But still, I mean, this just speaks to the incredible institutional thirst for ETF products that Black Rock has created. This also continues on what we just talked about with the IPOs and anything crypto adjacent that's available to public markets. but the other side of this is that a big chunk of this is becoming Ethereum. Yeah. Look, I think that, you know, we've talked about this before as well. There's, it has always seemed like it made sense for as crypto moved into the financial sector for there to be like, you know, on the desk, the big Bitcoin ticker and the big Ethereum ticker, Bitcoin representing store of value and digital gold, the theorem representing all the other stuff. And for a while, that wasn't happening.

People only cared. this to me feels like a very kind of natural settling in. Yes, it's being driven, of course, by, you know, you've got a new sailor in the form of Tonle who's playing that role for Ethereum. But the market is responding to that narrative shift, right? The ETFs have been absolutely crushing and outperforming. You know, we had a couple billion or something in flows this week compared to, you know, 330 million for Bitcoin. So, you know, it's, I think it's naturally sort of like recapturing its place. I mean, keep in mind, Ethereum hasn't, still hasn't reached an all-time high, right, since 2021. It's like we are still in the catch-up phase of where it should be, relatively speaking. So that's, you know, these ones I actually view as much less frothy and top signally. I think that they're kind of a natural, natural calibration, frankly. Yeah, the price action for crypto was so crypto this week. The fact that Bitcoin made this slight all-time high and immediately lost it and that Ethereum sniffed it for the first time.

basically in four years and then just couldn't get there, just leaving that level of anticipation that we're all so used to after all of these years. But I think we're still in the mid-innings of this thing. I think it's August. And the fact that we're not down is probably just good news in and of itself. Absolutely. This is a rip-roaring August based on August. These are, these is not markets, you know, participants off in the Hamptons. Like there is a, the normal, the normal patterns of regular markets are pretty out of whack this summer as well. So it's a it's you can't really apply old lessons, I think, in quite the same way. You got it. Man, we, we cooked through those. It's the Friday five, but we usually call it like the Friday 905 or the Friday 908. We always start a little late.

Today we hit it. We nail it. And we're like, functional people. Don't, don't expect that this is a change. Don't get used to it. Friday, Friday 910. We'll be back next week. Guys, give a listen as always to the breakdown and to NLW, of course. Otherwise, we will see you next week. Thank you guys. Have a great, amazing weekend. Bye. Later.