The Breakdown

Forbes called her “the newest superstar investor,” and it’s not hard to see why.  Cathie Wood is radically disrupting the way money is allocated. Fighting the rise of passive – what she calls the “greatest misallocation of resources in history” – Wood’s funds are actively managed exchange-traded funds that give investors exposure to public companies in key areas of innovation.  In this conversation, NLW and Wood discuss: Why she had conviction in Tesla before the market caught up  Why her fund offered the first bitcoin investment opportunities to Wall Street Why it doesn’t hire traditional Wall Street analysts  Why it gives away all research for free Why it shares the trades made in a completely open-source way ARK’s recent Bitcoin Investment Thesis white paper What the prospects are for innovation in 2021  Find our guest online: Twitter: @CathieDWood Web: ark-invest.com

A special breaking edition of The Breakdown follows the market’s reaction to Square’s surprise $50 million bitcoin investment.  NLW breaks down the foundations for the investment, including: 2020’s alignment between the bitcoin narrative and structural economic realities An increase in bitcoin’s perceived resilience The precedent set by MicroStrategy He also discusses the market’s reaction, from the (potential) connection to Coinbase’s “apolitical” stance from last week to the notion of Square intentionally setting a framework others can follow.

Today on the Brief: Stimulus talk shutdown spooks markets House recommends antitrust actions but likely to get nowhere CBDC trial results from China Our main discussion is with trader and entrepreneur Qiao Wang. In this conversation, NLW and Qiao discuss: Bitcoin’s resilience in the face of a barrage of bad news Why DeFi is a natural next step from the foundation bitcoin has built  How bitcoin could end up the reserve asset for DeFi Why regulation is the greatest threat to the space

Today on the Brief: John McAfee arrested in Spain BTC addresses added spikes to two-year high A new election-market narrative emerges Our main discussion: The U.K. has banned crypto derivatives.  Just days after the U.S. announced significant action involving BitMEX, the U.K.’s Financial Conduct Authority has made its own move to stop crypto derivatives.  In this episode, NLW breaks down what actually happened, and looks at the reactions from the crypto industry including: Accusations of hypocrisy Skepticism of enforceability  Why it might actually be good for bitcoin 

Today on the Brief: Markets gain as Pres. Trump’s condition stabilizes SEC Chairman Clayton sees future where all stocks are tokenized Uniswap had more volume than Coinbase in September  Our main discussion: central bank coins and financial privacy.  The EU recently released a new research paper on a possible digital euro. Like many other official central bank reports, it assumes there is no possibility of an anonymous digital bank currency. NLW dissects arguments from people including JP Koning and CoinCenter’s Jerry Brito on why this shouldn’t be true. 

Today’s Long Reads Sunday selection is “How To Avoid Paying the Cruelest Tax: Inflation” from the Wall Street Journal. NLW argues the piece reflects a changing conversation in mainstream financial circles about the possibility of inflation on the other side of new Federal Reserve policy.

A recap of September, which NLW calls a transitional month between the post-lockdown excitement of the summer and the growing macro insecurity around second wave fears and election volatility.  Featuring some of the most interesting insights from our guests, including: Luke Gromen on the four options for countries that can’t pay their debts Tavi Costa on the Fed’s new “mandate” to keep asset prices high  Raoul Pal on why “monetary policy is over”  Sven Henrich on the ever-weakening economic cycle Corey Hoffstein on the fundamental supply-demand mismatch that exacerbates exogenous shocks Michael Saylor on why he moved his company’s cash reserves to bitcoin

Today on the Brief: Market reaction to Pres.Trump contracting COVID-19 Subpar September jobs report Decentralized exchanges have third straight 100%+ growth month    Our main discussion features Stephen Palley and Preston Byrne of Anderson Kill.  Yesterday, BitMEX was targeted with both civil and criminal complaints, with the CTO being arrested for violation of the Bank Secrecy Act.  In this conversation, NLW talks to two crypto legal experts to discuss: The specifics of the charges How long this investigation has been in the works  Whether there was anything surprising to legal experts Why the criminal complaints represent an escalation of enforcement  Whether there are implications for other industry areas, particularly decentralized finance  Find our guests online: Stephen Palley: @stephendpalley Preston Byrne: @prestonjbyrne Anderson Kill: andersonkill.com

When popular finance writer Morgan Housel asked followers on Twitter to share the commonly held investing beliefs they most disagreed with, the internet responded with vigor.  A thousand or so replies later, NLW ranks the top 10 investing ideas we should be questioning, including: Ignoring compounding interest in our 20s Buying homes rather than renting  The idea US Treasury bonds are risk-free Listen to hear the full list.

Today on the Brief: Coinbase offers severance to employees who want to leave over new politics policy Long-term job cuts hamper any idea of V-shaped recovery Last chance for a stimulus package before the U.S. presidential election Our main discussion is a narrative shift from DeFi back to bitcoin.  Over the summer, DeFi led the crypto charge. From growth in total value locked to narrative dominance to even leadership in the all important category of crypto drama, DeFi was it.  Now, as a potentially turbulent macro environment rears its head, the narrative is shifting back to a focus on bitcoin.