0:04

Welcome back to The Breakdown

0:06

with me, NLW. It's

0:09

a daily podcast on macro, Bitcoin,

0:11

and the big picture power shifts remaking

0:13

our world. What's

0:18

going on guys? It is Thursday, April 24th, and

0:20

today we are talking about the remaking of Bretton

0:23

Woods. Before we get into that, however, if you're

0:25

enjoying the breakdown, please go subscribe to it, give

0:27

it a rating, give it a review, or if

0:29

you want to dive deeper into the conversation, come

0:31

join us on the Breakers Discord. You can find

0:33

a link in the show notes or go to

0:35

bit .ly slash Breakdown Pod. Well, friends,

0:37

tariffs continued to be the most important

0:39

driver in markets, but a relatively quiet

0:41

day in the headlines led to one

0:43

of the least volatile trading sessions of

0:45

the month. Stocks opened strongly after

0:48

the latest news of de -escalation was

0:50

digested overnight, but paired back gains throughout

0:52

the day. Bitcoin traded in

0:54

a tight range around 93 ,000 as traders

0:56

waited for the next move from the administration. The

0:59

Indian trade delegation was in town for their

1:01

turn at the negotiating table. Economic

1:03

Affairs Secretary Ajay Seth said that the

1:05

first order impact of U .S. tariffs

1:07

would cause GDP to drop between

1:09

0 .2 and 0 .5%, something he called not

1:11

a huge impact. However, he

1:13

added that, quote, the second order would be

1:16

important. The second order is if the global

1:18

economy grows less than expected. Bloomberg

1:20

reports that the bargaining chips on the table

1:22

are the removal of tariffs on bourbon and

1:24

high -powered motorcycles. Similar to the

1:26

idea of importing American trucks to Japan, it

1:28

seems like this administration likes the idea of Harley

1:31

-Davidson's on the streets of Mumbai. Perhaps

1:33

more importantly, the Wall Street Journal reported on

1:35

a rumored policy shift on China tariffs. They

1:38

characterized the move as a, quote, bid to

1:40

de -escalate tensions with Beijing that have roiled global

1:42

trade and investment. One senior White

1:44

House officials said that China tariffs were

1:47

likely to come down from their current

1:49

145%, to between 50 and 65%. There's

1:51

also apparently a plan to apply Chinese tariffs

1:53

in tiers across different sectors. Items

1:56

that the US deems to not be a threat

1:58

to national security will see a 35 % tariff, while

2:00

items that are deemed as strategic US

2:02

interests will have 100 % tariffs applied. This

2:05

style of approach was proposed by the House Committee

2:07

on China late last year. Notably

2:09

the accompanying bill proposed phasing in those tariffs

2:11

over five years rather than five minutes, but

2:13

here we are. Beijing is now

2:15

signaled that they are open to trade talks with

2:17

the US, but warned that they wouldn't negotiate

2:19

under the shadow of continued threats from the White

2:21

House. WSJ sources familiar with

2:23

Chinese policy circles said that Trump's comments

2:26

from Tuesday were viewed as a sign

2:28

of him folding, bristling at

2:30

the idea that he was capitulating

2:32

Trump reiterated to the press that China

2:34

tariffs were still at 145%, stating, I

2:36

haven't brought it down. Circling back on the events

2:38

of the week that led us to this point, Axios

2:41

reports that Trump met with the

2:43

CEOs of major retailers including Walmart and

2:45

Home Depot on Monday. An administration

2:47

source said, The big box CEOs flat

2:49

out told Trump that prices aren't going up.

2:51

But And

2:54

this wasn't about food. He was told that shelves

2:56

will be empty. These

3:00

stories are amazing because they all involve people

3:02

telling Trump what everyone else already knows, but

3:04

which he's somehow been oblivious or indifferent to.

3:07

Still, overall, this was one of the slowest days of

3:09

tariff news since Trump unveiled his poster boards in the

3:11

Rose Garden three weeks ago. mean

3:13

that there weren't some interesting signals to be seen.

3:16

Throughout the week in Washington, annual meetings have

3:18

been held for the IMF and World Bank.

3:20

Yesterday, Treasury Secretary Scott Besant made it clear

3:22

that the global institutions are falling short in

3:24

the eyes of this administration. In

3:26

a speech at the Institute of International Finance on

3:28

Wednesday, he said, The Bretton Woods

3:30

institutions must step back from their

3:32

sprawling and unfocused agendas. The IMF's

3:34

mission is to promote international monetary

3:36

cooperation, facilitate the balanced growth of

3:38

international trade, encourage economic growth, and

3:40

discourage harmful policies like competitive exchange

3:43

rate depreciation. Besson committed

3:45

the administration to playing

3:47

a continued leadership role in

3:49

the two organizations. However,

3:51

he said that the White

3:53

House would, quote, We must

4:01

enact key reforms to ensure the Bretton Woods

4:04

institutions are serving their stakeholders, not the

4:06

other way around. The speech

4:08

was littered with references to social and

4:10

diversity agendas adopted by the institutions over

4:12

the years, with Besson stating These issues

4:14

are not the IMF's mission. He stopped

4:16

short of announcing a withdrawal from the

4:18

institutions, which had been proposed in

4:20

the Heritage Foundation's Project 2025. Instead,

4:22

he declared, America first does not

4:24

mean America alone. To the contrary, it's

4:26

a call for deeper collaboration and

4:28

mutual respect among trade partners. The

4:31

Treasury Secretary expressed a belief that the two

4:33

institutions, quote, serve critical roles in the international system,

4:35

and the Trump administration is eager to work

4:37

with them so long as they can stay true

4:39

to their missions. Turning to

4:41

the ongoing trade war with China, Besen said,

4:43

There's an opportunity for a big deal here,

4:45

that the US is looking to rebalance to

4:47

more manufacturing, the identity of that would be

4:49

less consumption. If China is serious

4:51

on less dependence on export -led manufacturing growth,

4:54

and are rebalancing towards a domestic economy, if

4:56

they want to rebalance, let's do it

4:58

together. The speech seemed to be

5:00

well received by the upper echelons of the central

5:02

banking world, with former Bank of England Governor Andrew

5:04

Bailey saying that he was, quote, frankly very encouraged

5:06

by Besen's comments on the IMF and the World

5:08

Bank. I think the challenge here

5:10

is that while many people probably had

5:12

a very similar reaction to that, being

5:14

pleased to see this very high -ranking

5:16

Trump official affirming that the US wanted

5:19

to stay involved in these international institutions

5:21

rather than burn them to the ground

5:23

unilaterally, but at the same time, I

5:25

don't think anyone is quite clear on

5:27

how much Besson's words actually reflect the

5:29

opinions of the administration. In

5:31

fact, I think if anything, there's a sense that maybe

5:33

they don't. Besson has sort of

5:35

become this interesting bellwether. of how much

5:37

Trump is willing to listen to mainstream

5:39

financial institutions in Wall Street versus just

5:41

completely being willing to go it alone.

5:44

Now, taking a short detour into the world

5:46

of gossip and innuendo, Axios reports

5:49

speaking of Besant that Elon Musk and

5:51

Besant almost came to blows. One

5:53

witness said, And

6:07

that's when they did it again. It was quite

6:09

a scene. It was loud, and I mean loud. The

6:11

dispute was apparently over a disagreement about

6:13

who should lead the IRS, but spilled

6:15

into more personal territory. Axios

6:17

wrote that, quote, Besant criticized Musk for

6:20

over -promising and under -delivering budget cuts with

6:22

Doge, Musk clapped back by calling Besant

6:24

a Soros agent and accusing him of

6:26

having run a failed hedge fund. There

6:29

seems to be a huge number of sources willing

6:31

to air out the dirty laundry, with one admin

6:33

official saying, it wasn't a fight about right or

6:35

wrong, it was about control. It does

6:37

seem like Elon's days in the West

6:39

Wing are likely numbered. The billionaire announced during

6:41

Tesla's earnings call that his dogework would,

6:43

quote, drop significantly starting in May in order

6:45

to allocate more time to his car

6:47

company, which is facing its own struggles. The

6:50

doge tracker claims that the cost -cutting agency

6:52

has saved the U .S. government $160 billion, a

6:54

far cry from the $2 trillion promised by

6:56

Elon on the campaign trail. Hayden

6:58

the transit guy on Twitter summed up the feelings

7:00

of many when they wrote, So Doge just cut

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the macro show continues unabated and we

8:43

will continue to keep track of the machinations.

8:45

For the second part of the show,

8:47

though, however, let's turn our attention to the

8:49

crypto sphere. where Bloomberg is reporting that

8:51

Bitcoin is now trading with a much lower

8:54

10 -day volatility than the Nasdaq or S

8:56

&P 500. They suggested that, quote, the much

8:58

reduced volatility could be because Bitcoin is

9:00

less exposed to derivatives and program trading. Gotta

9:03

say, never thought there would be a day

9:05

where the crypto trading bots would be viewed as

9:07

less risky than institutional market makers like Citadel

9:09

and Jane Street. Bloomberg suggested that this lack of

9:11

volatility could lead some corporate managers to, quote, revisit

9:13

whether it could be more resilient in the

9:16

complicated global trade environment. Saying this differently, the

9:18

Premier Financial News outlet is now suggesting Wall

9:20

Street might flee their risky S &P 500

9:22

exposure to the safety of Bitcoin. Meanwhile,

9:24

Bloomberg ETF analyst Eric

9:27

Balcunus is picking up on

9:29

some crazy hedging behavior

9:31

going on at the moment.

9:33

He wrote, Now this

9:35

strategy of getting levered long

9:37

on risk assets while

9:39

also holding gold seems to

9:41

have an analog in

9:43

the digital asset space. David

9:46

Seymour, the CEO of Asset Manager Wave

9:48

Digital Assets said, Speaking

10:12

of Coinbase, interesting comments from their institutional

10:14

head of strategy, John DiAgostino. He basically said

10:16

that if you've been selling Bitcoin over

10:18

the past few weeks, there's a reasonable chance

10:20

that sovereign wealth funds have been buying

10:22

your bags. Appearing on CNBC,

10:25

he said that institutions and sovereign wealth funds

10:27

were accumulating Bitcoin this month while retail traders

10:29

were exiting the markets. He argued

10:31

that these large players were looking for

10:33

hedges against currency inflation and macroeconomic uncertainty. In

10:36

a follow -up to yesterday's story on

10:38

the new Bitcoin joint venture between

10:40

SoftBank, Cantor Fitzgerald, and Tether, Jack

10:42

Mahlers has been tapped to join as CEO. The

10:45

strike founder joined in an announcement on Wednesday,

10:47

firming up details around the new firm. The

10:49

announcement said that the company, called 21 Capital,

10:51

would launch with $3 .6 billion worth of

10:53

Bitcoin in its treasury. Plans are already

10:55

in place to add to that sizable stack. The

10:58

company will go public via SPAC and

11:00

begin issuing equity and convertible bonds, very

11:02

referentially duplicating the Michael Saylor playbook.

11:04

Their 42 ,000 Bitcoin starting treasury will

11:06

be enough to make the company the

11:08

third largest Bitcoin firm behind strategy

11:11

and marathon digital. Tether will

11:13

have majority ownership with SoftBank as a minority

11:15

stakeholder. The announcement wasn't clear whether Cantor

11:17

Fitzgerald would have an equity stake in the

11:19

company or merely participate as a partner. The

11:22

investment bank's 5 % stake in Tether will

11:24

give them a slice of the pie

11:26

in any event. The press release stated, 21

11:28

is structured to be a day one

11:30

Bitcoin native company that will strategically allocate capital

11:32

to increase Bitcoin per share. The company

11:34

stated that they intend on, quote, supporting financial

11:36

products built with and on Bitcoin, including

11:38

lending models, capital market instruments, and future innovations

11:40

that will replace legacy financial tools with

11:42

Bitcoin -aligned alternatives. Tether CEO Paolo

11:44

Arduino stated, with Jack at the helm,

11:46

we're proud to support this effort to further Bitcoin's adoption

11:49

and reinforce its role as the ultimate store of

11:51

value. And of course, as you

11:53

would expect and hope for, even something

11:55

that seems so robustly clearly good is

11:57

generating debate among Bitcoiners. Tales

11:59

from the crypto cheered the announcement, tweeting,

12:01

we're winning. But podcaster Daniel Price wrote, and

12:31

hoard the scarce asset on earth without

12:33

regulatory speed bumps. It's like giving

12:36

a cartel diplomatic immunity, then asking them to

12:38

do quarterly earnings calls. SoftBank didn't join

12:40

for fun. They saw MicroStrategy mint a 2000

12:42

% return on Bitcoin purchases and said, cool,

12:44

now let's do it ourselves. The

12:46

company is launching with $585 million in

12:48

pipe funding, $385 million of it on convertible

12:50

notes backed by Bitcoin at a 3 -to

12:52

-1 collateral ratio. That's financial LSD

12:54

for every structuring desk on the street.

12:56

The moment Bitcoin rips, they release collateral,

12:59

unlock capital, and buy more. recursive

13:01

Bitcoin compounding inside a public vehicle.

13:04

This is sailor, but with a global

13:06

stablecoin treasury, a high -frequency derivatives desk, and

13:08

a Tokyo war chest. And here's

13:10

the kicker, Tetherwell -owned majority control. That's like OPEC

13:12

launching a public oil ETF that owns half

13:14

the oil and pricing it at Nav. And Wall

13:16

Street's fine with this. Why? Because the fees

13:18

are good, the volatility is tradable, and the suckers

13:20

at home still think we're early. This

13:22

isn't the institutional adoption phase anymore. This

13:24

is the corporatized colonization of the Bitcoin

13:26

protocol. Execute it through a Cayman shell

13:29

and priced in your grandchildren's tears. You're

13:31

not front -running Wall Street anymore. You're being

13:33

front -fed the illusion that you are. And

13:35

the price? You'll watch it go vertical

13:37

while CNBC blames inflation and seven sovereign

13:39

ETFs pretend they understand what just happened. Bitcoin's

13:42

next leg up won't be

13:44

demand -driven. It will be capital -structured,

13:46

engineered, manufactured, monetized. Megacorporations

13:48

are now turning Bitcoin into the new global

13:50

collateral standard and selling you the derivative. Welcome

13:53

to the Great Absorption. Hope you brought a

13:55

chart. Now, obviously, this is a little bit of

13:57

a pessimistic view, certainly a well -written one,

13:59

I have to say. But again, I

14:01

always continue to think it's healthy, that even

14:03

things that seem as robustly and clearly good

14:05

for Bitcoin are still debated by Bitcoiners. That's the

14:07

thing that gives me the most confidence in

14:09

this asset and in this community in the long

14:11

run. And lastly today, President Trump

14:13

has announced a gala dinner for his most

14:16

loyal bag holders. The top 220 holders

14:18

of the Trump meme coin will be invited to

14:20

a gala at the Trump National Golf Club in

14:22

Washington at the end of next month. While the

14:24

meme coin experienced a hot launch, it was down

14:26

85 % in the three months following inauguration. The

14:28

will say this is just an exit pump

14:31

team began unlocking earlier this week, and if

14:33

that's the case it worked, with the token

14:35

gaining 52 % on the announcement. It's

14:37

still 75 % down from the highs, but of

14:39

course that's not a problem for tokens allocated for

14:41

free to the team. CryptoKaleo

14:44

If you're curious, around 500 million worth of Trump

14:46

unlocked less than a week ago, which also kicked

14:48

off a daily unlock of around $5 million of

14:50

tokens which will last for the next couple of

14:52

weeks and be increased in July. Enjoy

14:54

your dinner though. Others took a more

14:56

optimistic view. RunnerXBT believes the

14:58

president is assembling the greatest minds of crypto to

15:00

resolve the trade war, tweeting Top

15:02

5 holders will get to pick new

15:04

tariffs on China. For now, that that

15:06

is to do for today's breakdown. Appreciate you listening

15:09

as always, until next time, be safe and take care

15:11

of each other. Peace.