Welcome back to The Breakdown with me, NLW.

It's a daily podcast on macro, Bitcoin, and the big picture power shifts remaking our world.

What's going on, guys? It is Thursday, December 4th, and today we are talking Larry Fink and Brian Armstrong at the Deal Book Summit. Before we get into that, however, if you are enjoying a breakdown, please go subscribe to it, give it a rating, give it a review, or if you want to dive deeper into the conversation, come join us on the Breakers Discord. You can find a link in the show notes or go to bit.ly slash breakdown pod. All right, friends, on Wednesday, BlackRock CEO, Larry Fink, and Coinbase CEO, Brian Armstrong, sat down for a joint interview with Andrew Ross Sorkin at the Deal Book Summit. Now, if you are not familiar with Deal Book, it is a major event from the New York Times and serves as a platform for the biggest conversations in finance, politics, and society as a whole. This year's summit, for example, featured Anthropic CEO Dario Amade, Palantir CEO Alex Karp, and Israeli Prime Minister Benjamine Netanyahu, just to give you a sense of the cross-section of guests. Now, Crypto hasn't been featured at Dealbook since 2022, when Sam Bagman-Fried gave his last interview as a

free man via Telalink from the Bahamas a few weeks after the FTX collapse. Thankfully, this time

crypto's appearance at the summit is under much better circumstances. As we covered on yesterday's show,

Larry Fink is firing up a new press tour to push tokenization as the biggest story in finance for the

coming year. Earlier in the week,

he published a primer on tokenization in The Economist intended to reach a mainstream audience,

and this interview was definitely a continuation of that goal. Meanwhile, Brian Armstrong has

been quietly building out Coinbase's strategy as the Everything exchanged and is poised to

cement Coinbase as a major U.S. financial institution. Both CEOs are looking to take crypto mainstream, and Dealbook was the perfect stage to do so. Still, it was an Andrew Ross Sorkin interview, so we had to begin with a heavy dose of crypto skepticism. He began by referring to Larry Fink's previously held belief that Bitcoin is a, quote, index of money laundering. Fink responded, you've got to evolve and change. During COVID, we had a little more time, and I actually took it upon myself to understand what I was missing. After speaking with people in the industry, Fing said that he has come to a new understanding. I think there's a large use case for Bitcoin and I still do today. This is one thing I get excited about. I had very strong views, but that doesn't mean I'm not wrong. This is a very

glaring public example of a big shift in my opinion. Armstrong discussed his recent experience

working with banks and other financial institutions. He said he's now frequently running into

situations where the innovation arm of many of the largest banks are pushing to develop

stable coins and crypto custody as fast as possible. Meanwhile, the lobbyists in D.C. are still trying to curtail crypto adoption. Sorkin invoked the late Charlie Munger's view that Bitcoin is rat poison and will go to zero. Armstrong responded, there's no chance that that's going to happen at this point. We're in a world now where democracies around the world are trying to curb deficit spending, Bitcoin is this new digital gold. People are going to turn to it in times of uncertainty. It's tough for Munger and Buffett to contemplate a world that is more decentralized than running on the internet. Fing chimed in to say, I think we need to get back to what is the purpose of Bitcoin. He said the $13.5 trillion worth of assets that BlackRock is about managing hope. Investors put their money in assets because

they hope the companies will grow and bonds will be repaid. Bitcoin, he said, is an asset of fear.

When there is a trade agreement with China or the possibility of a peace deal in Ukraine, Bitcoin

fell. Fink continued, you invest in Bitcoin because you're frightened of your physical security,

your financial security, the long-term fundamental reason you own it, is because of the debasement of financial assets because of deficits. Sorkin asked about those who bought Bitcoin at $125,000 in October, with Fink responding, if you bought it as a trade, you're going to have to be really good at market timing, which most people aren't. If you buy it as a hedge against all your hope, then it has a meaningful impact on a portfolio. While he acknowledged that Bitcoin is still driven by highly leveraged traders, Fink added,

we're seeing more and more legitimate long-only investors investing in it. I can tell you there are a

number of sovereign funds that are adding incrementally at 80-100-120. They're establishing a longer

position. You own it over years. This is not a trade. You own it for a purpose. Turning to adoption

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