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“Crypto-mom” Heister Peirce wants the SEC to use more flexible regulations in dealing with cryptocurrencies and tokens. In her position as Commissioner of the Securities and Exchange Commission (SEC), she is willing to create a non-exclusive safe harbor for token offerings. Issuers would be able to offer new tokens under a regime with robust requirements. The SEC and similar organizations should not be “merit regulators.” The market participants should decide on which asset to invest. Otherwise, the US will fall even more behind other countries in Europe and Asia, which are leading the way in the field. Bitcoin raises above $ 11,800 while global stock markets plunge.
Bitwise, one of the leading crypto-fund managers, is very optimistic about the future of Bitcoin. The recent announcement of Libra sparked new public interest toward crypto. Furthermore, the US government is now active in bringing order in the market, to the benefit of conventional and institutional investors. Some members of Congress also realize that the United States should lead the race to crypto, which now sees China and other countries on the forefront. Bitcoin is emerging as a store of value, alternative to gold. It is dominating the market and separating more and more from other cryptocurrencies.
Walmart is patenting technology that will allow its customers to purchase products in stores using crypto. It will also likely provide loyalty programs for repeat purchasers. Starbucks is also planning to accept crypto payments through the Bakkt platform in which it owns substantial equity. Bitcoin is again on the rise thanks to US tariffs on China and cuts to US national interest rates.
Will Woo, a major crypto-analyst, has figured out a way to compare Bitcoin mining activity to market trends. According to his evaluations, we are on the verge of a new increase in value for BTC. The IRS has sent letters asking crypto investors to either pay or state that they didn’t have any gains. Tax experts advise to amend previous returns and to pay.
Bitcoin and crypto are increasingly becoming a matter of government concern. US regulators are dipping their toes in the field, while China is afraid of losing its lead. The possible launch of Libra is scaring for the Chinese government, which is now seriously considering the launch of its state crypto. It would be everything Libra wishes to become, but it would be centrally controlled and closely monitored. It is a trend which is opposite to the original purpose of Bitcoin and other cryptocurrencies. It will probably create an exciting new dynamic in the crypto field as well as sound as a wake up call for some slumbering governments.
US and China governments have a substantially different approach to crypto and blockchain. The United States is still looking at the speculative aspect of digital coins. It sees it as a threat to the predominance of the dollar and the stability of its financial apparatus. It has no apparent intention to ban the use of crypto but wants to curtail their possible illegal applications. China is mining Bitcoin aggressively only as a way to influence its geopolitical power and possibly avoid sanctions. It prefers more usable and scalable cryptocurrencies. The Chinese government gives particular attention to newcomers that have higher technology potential, totally disregarding transaction volumes, and market capitalization. Overall, China has embraced crypto technology as a state-controlled asset. The US government is catching up on blockchain deployment, but it still lacks a clear and comprehensive policy in the field. In the meantime, Bitcoin is hovering around $10K with possible indicators of inflection. Monero crashes. Ethereum is fairly stable.
The US Senate just held a non-conclusive hearing on the future of legislation on crypto. The main takeaways are that politicians are aware that cryptocurrencies cannot be stopped and are quite worried about Facebook Libra. The market reacted positively to the “unstoppability” of crypto, yet trends are still quite uncertain. Facebook admits it might scrap the Libra project altogether, while members of the Calibra project (which would control Libra) keep distancing themselves from Zuckerberg’s crypto. Tether, a stablecoin, finds use in China and Russia grey markets. Crypto is becoming a primary vehicle to avoid US sanctions on countries like Russia, China, Iran, and Venezuela. Switzerland, Britain, and Germany move full ahead on crypto and blockchain development.
The recent wild price variations of Bitcoin have been caused by a few investors who initiated massive transactions. Called otherwise “whales,” these are people who have amassed substantial amounts of BTC and speculate on market variations that they themselves create. It is reducing the average investor’s confidence, and it is keeping Bitcoin value stuck below $ 10,000. Experts continue to be optimistic about the trend of the major cryptocurrency. Professional investment funds continue to expand their adoption of Bitcoin and other digital assets in their portfolios. We see exciting activity in the wallets and payments platforms area, while Facebook Libra looks more and more dead on arrival.
The US Department of Defense has launched a digital modernization initiative which includes experimenting with blockchain for transmitting secure messages. The development work will be performed by the Defense Advanced Research Projects Agency (DARPA), which is the same agency that in the Sixties paved the way for the development of the modern Internet. After the Facebook fiasco on Libra, cryptocurrency markets are still uncertain, but analysts remain optimistic. Governments can indeed influence crypto, like they sway the course of any currency, but cannot really stop it or kill it.
Just a few days ago, US Treasury Secretary Steven Mnuchin promised, for the second time, very, very strong enforcement of existing financial regulations against criminal uses of crypto. Earlier, he had already anticipated that the Trump administration was preparing swift and robust action against money laundering through crypto. The Department of Justice just stepped in to make these threats a reality. It is a $ 100 million lawsuit against Russian national Alexander Vinnik who is accused of have laundered billions of dollars worth in crypto. He is believed to be the person behind the infamous Bitcoin exchange BTC-e which was used to launder also the money stolen from other exchanges, like Mt. Gox. FinCEN had already levied an $ 88.2 penalty against BTC-e plus a $ 12 penalty against Vinnik. The DOJ is now moving ahead to collect them.
Bitcoin cannot hold the $ 10,000 level. The political uncertainty triggered by Libra is creating short term effects. One of the top mathematical analysts predicts a descent to $ 7,000 before an even stronger recovery. The confirmed money printing policy of the European Central Bank could ignite a new spark, and by the end of the year, several predict Bitcoin could reach at least $ 20K. Libra is facing fluidity in the Calibra consortium. MIT fellow and NYU Math professor accuse Facebook of having stolen the structure of Libra from a research whitepaper. Huawei founder states that China could build its own cryptocurrency without waiting for Libra. Russian arms manufacturers and Venezuela dodge sanctions using Bitcoin. Ethereum remains massively undervalued.
Research shows that 40% of Americans are considering adding Bitcoin to their portfolio. It opens a market potential of 21 million new investors. Tulsi Gabbard sues Google for censorship of her presidential campaign ads. Demands injunction against election meddling by the major search engine. Positive outlook for Bitcoin value. Ten Altcoins worth considering.
Headwinds ahead for Big Tech. Now also the US Treasury Secretary adds his voice in support of an antitrust inquiry on Amazon. In the meantime, Mnuchin still strives to support the dollar and to downplay the future of Bitcoin. On the contrary, Craig Cohen, strategist at JP Morgan Chase, believes the dollar cannot maintain the status quo. He has doubts about the dollar’s future. Next week the US Senate will hold a hearing on cryptocurrencies and Bitcoin. Facebook Libra has triggered a sudden adverse interest for crypto in US politics. It could have a boomerang effect on Big Tech.
Major antitrust inquiry launched by the Department of Justice on big tech companies. It supplements a probe already ongoing by the Federal Trade Commission. It looks like the political world and the government want to bring big tech under control before the next election. The State of New York has created a special crypto-license for businesses which want to deal in cryptocurrencies.
Four primary US opponents have strategies that rely heavily on crypto to bypass sanctions and set themselves free from the US dollar. China, Russia, Venezuela, and Iran offer examples on how the US government should strive to catch up in the field by embracing crypto rather than fighting it or ignoring it. In the meantime, the crackdown announced by the US government on dealers and exchanges could help stabilize the market, but also make it less responsive to innovation. For sure US politicians won’t be able to ignore the subject anymore, and it could even become an issue for the future presidential election.