The Breakdown

On this week’s “Long Reads Sunday,” NLW reads:

• “How Crypto Can Help Nigeria’s Economy” by Olumide Adesina
• “The Inevitability of Crypto in Iraq” by Abdurrahman Bapir

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“The Breakdown” is written, produced by and features NLW, with editing by Rob Mitchell and additional production support by Eleanor Pahl. Adam B. Levine is our executive producer and our theme music is “Countdown” by Neon Beach. The music you heard today behind our sponsor is “Only in Time” by Abloom. Image credit: Golden_Brown/iStock/Getty Images Plus, modified by CoinDesk.

On this week’s “Breakdown Weekly Recap,” NLW looks at some reported emerging tension around which U.S. regulatory body holds authority over crypto. 

The U.S. Treasury has revealed its heavy hand in the infrastructure bill process, and it isn’t the first Treasury Department to have a problem with crypto. SEC Chair Gary Gensler is asking Sen. Elizabeth Warren for more authority for his organization. Meanwhile, the CFTC is publicly saying regulatory authority lies with it, not the SEC. 

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“The Breakdown” is written, produced by and features NLW, with editing by Rob Mitchell and additional production support by Eleanor Pahl. Adam B. Levine is our executive producer and our theme music is “Countdown” by Neon Beach. The music you heard today behind our sponsor is “Tidal Wave” by BRASKO. Image credit: Andrew Harrer/Bloomberg/Getty Images, modified by CoinDesk.

On this episode of “The Breakdown:”

• Bitcoin mining bump
• Coinbase’s massive Q2 earnings and more institutional news
• Crypto tax companies popping up

North American bitcoin mining companies saw a significant increase from the previous month. Contributing to this increase is the downward difficulty adjustment, a built-in and automatic Bitcoin feature that incentivizes more miners to join the network. The adjustment came after China’s crackdown on their miners and a subsequent drop in hashrate. Is this mining success bullish for bitcoin?

Coinbase’s Q2 earnings report revealed a successful quarter with a bigger portion of trading volume attributed to institutional over retail. Additionally, ethereum surpassed bitcoin in trading volume for the first time. Will these trends continue?

With regulatory pressure on the horizon, several new crypto tax companies are being formed (and venture capital-backed) to fill the gap. Crypto presents new complexities for reporting and the tax implications of the U.S. infrastructure bill are imminent. Will these companies be able to find a solution when it’s tax time?

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“The Breakdown” is written, produced by and features NLW, with editing by Rob Mitchell and additional production support by Eleanor Pahl. Adam B. Levine is our executive producer and our theme music is “Countdown” by Neon Beach. The music you heard today behind our sponsor is “Only in Time” by Abloom. Image credit: eclipse_images/iStock/Getty Images Plus, modified by CoinDesk.

Jake Chervinsky is the general counsel for Compound Labs and DeFi lead at the Blockchain Association. Over the last few weeks he has been deeply involved in the battle against the onerous crypto provision in the infrastructure bill. 

In this discussion with NLW, Jake provides a blow-by-blow overview and insider's account of the battle, from first learning of the provision to the moment that a senator’s special interest broke the bill. Finally, they discuss what the legacy of this event will be for the crypto industry and why we’re likely to be stronger now than ever. 

Enjoying this content?   SUBSCRIBE to the Podcast Apple:  https://podcasts.apple.com/podcast/id1438693620?at=1000lSDb Spotify: https://open.spotify.com/show/538vuul1PuorUDwgkC8JWF?si=ddSvD-HST2e_E7wgxcjtfQ Google: https://podcasts.google.com/feed/aHR0cHM6Ly9ubHdjcnlwdG8ubGlic3luLmNvbS9yc3M=   Follow on Twitter: NLW: https://twitter.com/nlw Breakdown: https://twitter.com/BreakdownNLW

“The Breakdown” is written, produced by and features NLW, with editing by Rob Mitchell and additional production support by Eleanor Pahl. Adam B. Levine is our executive producer and our theme music is “Countdown” by Neon Beach. The music you heard today behind our sponsor is “Tidal Wave” by BRASKO. Image credit: uzenzen/iStock/Getty Images Plus, modified by CoinDesk.

On this episode of “The Breakdown,” NLW covers bull market indicators, including:

• Investment firms reporting positive market signals
• Continued NFT boom
• Markets ignoring outdated FUD

Both NYDIG and Arca released reports detailing their perceptions of positive market signals towards a bull run. Signs included Grayscale GBTC unlocks, institutional interest and risk appetite.

The NFT bubble has not burst. Capital continues to flow into the space and digital art collections like Crypto Punks have shot up in value, exceeding even the previous March highs. 

Crypto seems to be rolling over FUD: Tether’s additional backing clarity and BitMEX’s nine-figure settlement helped to ease uncertainties in markets over regulations. China’s crypto crackdown and the subsequent Great Hashrate Migration caused little impact. Even the Poly Network’s $600 million hack this week made no dent to prices.

Is Bitcoin’s “defiance rally” part of a bigger bull run?

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The Breakdown is written, produced by and features NLW, with editing by Rob Mitchell and additional production support by Eleanor Pahl. Adam B. Levine is our executive producer and our theme music is “Countdown” by Neon Beach. The music you heard today behind our sponsor is “Only in Time” by Abloom. Image credit: Overearth/iStock/Getty Images Plus, modified by CoinDesk.

The compromise amendment to the crypto provision in the infrastructure bill was shot down in the Senate yesterday. On this episode of “The Breakdown,” NLW covers what’s happened, what’s next and what it all means, including:

• The compromise’s demise
• Next stop: The House of Representatives
• Crypto’s newfound relevance in political discourse

The compromise – proposed by Senators Lummis and Toomey, and backed by Treasury Secretary Janet Yellen – was rejected by a single senator. The amendment would have required unanimous consent but was tanked by Alabama Republican Sen. Richard Shelby over an unrelated dispute on additional military funding. 

The bill now moves to the House where it will be deliberated more, though it is unclear how much room there will be for modifications once it gets there. Emerging crypto-friendly lawmakers continue to push to improve the broker definition within the provision.

The infrastructure bill saga represents the first act in crypto entering the highest echelons of political discussion in the U.S. Instead of pushing quiet legislation through, this crypto provision gave the industry an unprecedented platform and relevance in the eyes of lawmakers. Will crypto be a key issue for lawmakers in the future?

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The Breakdown is written, produced by and features NLW, with editing by Rob Mitchell and additional production support by Eleanor Pahl. Adam B. Levine is our executive producer and our theme music is “Countdown” by Neon Beach. The music you heard today behind our sponsor is “Tidal Wave” by BRASKO. Image credit: Chip Somodevilla/Getty Images News, modified by CoinDesk.

Contention over the crypto provision in the infrastructure bill continues. Today on “The Breakdown,” NLW brings the latest, including:

• Consensus mechanism confusion
• A weekend stalemate 
• The emergent power of the crypto industry

The amendment proposed by Sen. Rob Portman included an odd preference for proof-of-work over any other consensus mechanism. After significant pushback from the crypto community on this specific detail, the amendment was changed to cover all consensus mechanisms. But in a head-scratching turn of events, the amendment was updated once more to include proof-of-work and proof-of-stake, but no other mechanisms.

Sunday came with its own set of blockers, including a conflict around prioritization of the crypto provision versus other legislation that needs attention. Though the weekend brought little resolution, the debate continues and there is still time for a positive resolution. Will policymakers come to an agreement on one of the proposed amendments in time?

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The Breakdown is written, produced by and features NLW, with editing by Rob Mitchell and additional production support by Eleanor Pahl. Adam B. Levine is our executive producer and our theme music is “Countdown” by Neon Beach. The music you heard today behind our sponsor is “Only in Time” by Abloom. Image credit: Overearth/iStock/Getty Images Plus, modified by CoinDesk.

On this week’s “Long Reads Sunday,” NLW reads David Z. Morris’ “The End of Exorbitant Privilege: Inflation, the Global Dollar and What Comes Next,” which covers inflation’s potential impact on the status of the USD.

Enjoying this content?   SUBSCRIBE to the Podcast Apple:  https://podcasts.apple.com/podcast/id1438693620?at=1000lSDb Spotify: https://open.spotify.com/show/538vuul1PuorUDwgkC8JWF?si=ddSvD-HST2e_E7wgxcjtfQ Google: https://podcasts.google.com/feed/aHR0cHM6Ly9ubHdjcnlwdG8ubGlic3luLmNvbS9yc3M=   Follow on Twitter: NLW: https://twitter.com/nlw Breakdown: https://twitter.com/BreakdownNLW

The Breakdown is written, produced by and features NLW, with editing by Rob Mitchell and additional production support by Eleanor Pahl. Adam B. Levine is our executive producer and our theme music is “Countdown” by Neon Beach. The music you heard today behind our sponsor is “Tidal Wave” by BRASKO. Image credit: blinow61/iStock/Getty Images, modified by CoinDesk.

On today’s episode, NLW is joined by Raoul Pal. Raoul is the founder and CEO of Global Macro Investor and Real Vision, whose Real Vision Crypto community has raced to more than 100,000 after launching earlier this year. 

 

They discuss:

• The U.S. infrastructure bill and the increase in regulatory pressure
• The current state of inflation and why markets disagree about its impact
• Why transformation and technological change are the main forces shaping markets and society 
• Why DeFi is particularly threatening to central banks
• Why Janet Yellen is the embodiment of the central bank and the federal government coming together 
• The real future of NFTs 

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The Breakdown is written, produced by and features NLW, with editing by Rob Mitchell and additional production support by Eleanor Pahl. Adam B. Levine is our executive producer and our theme music is “Countdown” by Neon Beach. The music you heard today behind our sponsor is “Only in Time” by Abloom. Image credit: Nuthawut Somsuk/iStock/Getty Images modified by CoinDesk.

The infrastructure bill-related surprise in the U.S. Congress came in the form of a competing amendment with a short list of exemptions from the original language. On this episode of “The Breakdown,” NLW addresses the latest updates on the bill, including:

• White House support of the Portman, Warner and Sinema amendment

Proof-of-work prioritization

The future of the bill

The White House claimed support of the Portman, Warner and Sinema competing amendment, citing its ability to strengthen tax compliance in the crypto industry. Crypto advocates have been quick to call out the intentional gaps in the amendment’s language as well as the clear lack of technological understanding.

The proposed amendment specifically excludes proof-of-work mining from the reporting requirements, a surprising stance compounded by the fact that the language itself seems to misunderstand the difference between validation and mining. Some Bitcoin maximalists rejoice at their preferential treatment over proof-of-stake networks like Ethereum, but it remains unclear whether this amendment would protect even Bitcoin in the long term.

If the amendment were passed, the bill itself would not go into effect until 2023. Organizations like Fight for the Future are creating resources for crypto allies to contact their senators. If the amendment passes, how will crypto adapt? 

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The Breakdown is written, produced by and features NLW, with editing by Rob Mitchell and additional production support by Eleanor Pahl. Adam B. Levine is our executive producer and our theme music is “Countdown” by Neon Beach. The music you heard today behind our sponsor is “Razor Red” by Sam Barsh. Image credit: Alex Wong/Getty Images News, modified by CoinDesk.