Could The SEC Be After Your Crypto Project??

Last week, I did a video on a recent SEC hearing, where its head of enforcement was grilled by Congress. Some pro-crypto politicians aren’t too happy with the SEC’s policy when it comes to its fuzzy “security” definitions, which are also creating problems for many cryptocurrencies.

Only a few days after that hearing, the SEC disclosed that it considers 9 cryptocurrencies to be “securities”. Some of these tokens you may have heard of, and some may be completely new to you.

However, what’s even more important than the actual cryptocurrencies affected is how the SEC came to its conclusion that they are securities. That’s because these criteria are likely to be used when determining whether or not your favourite cryptocurrency is a security.

In my video today, I take a look at each of the cryptocurrencies that were included on the SEC’s list, as well as the SEC’s argument as to why they should be considered securities. I also give some of my own thoughts about what clear “red lines” projects should avoid.

This video will also give you a good idea as to whether any of the coins that sit in your portfolio are in the SEC’s line of sight. As you no doubt know, a “security” designation for any cryptocurrency could result in lengthy court cases at best and complete shutdowns at worst.

You can watch that video here.

📊 My Personal Portfolio 📊

ETH 40.36% | BTC 32.31% | SOL 4.90% | USDC 4.53% | DOT 4.30% | ATOM 3.38% | RUNE 1.83% | NEAR 1.49% | ADA 1.40% | MATIC 1.35% | STETH 1.20% | HNT 1.05% | FTM 0.85% | LINK 0.58% | INJ 0.47%

📈 Thoughts on Market 📈

It’s been a very interesting week for the crypto market. It began with a bunch of down days that were caused by the uncertainty around Nancy Pelosi’s trip to Taiwan. For those who don’t know why this is so significant, I suggest checking out this awesome Blockworks episode. TLDR: Nancy is the most powerful US politician to visit Taiwan in over 25 years, and China doesn’t like the idea of the US increasing its support for the island.

What’s interesting is that nobody seems to know why exactly Nancy decided to take the trip, especially since the current US administration advised against her travelling there, even though she’s from the same political party.

Lo and beyond, the stock market rallied on the news that Nancy had left Taiwan, and this is what caused the only big green candle you see on BTC’s daily chart over the last week. Not surprisingly, it seems the visit has created bigger problems for the United States. China has sanctioned Pelosi and is beginning to cancel deals and talks about other issues such as climate change. Obviously, the last thing we need is more global conflict.

Another macro factor that moved the markets last week was the release of the US jobs report on Friday, which came in way above expectations. Now, you’d think this was a good thing, but a 50 year low in unemployment means the Federal Reserve has even more room to raise interest rates, hence why markets slumped. The data that investors are anxiously awaiting now is the inflation figures for July which will come out this Wednesday at 8:30 EST.

In terms of crypto specific factors, all eyes are on Ethereum as its final merge test net is expected to occur any moment now, and it’s possible that it’s happening as you read this sentence. This is why ETH performed so well at the end of last week, despite the broader crypto market slump, and not just in US dollar terms. Take a peek at the ETH vs. BTC chart, specifically on the weekly, and slap on some top indicators. You’ll see ETH is likely to continue rallying.

As for BTC, things are looking pretty bullish on the weekly as well. BTC is still fairly oversold, and a rally to 30k would put it at it’s ‘fair value’ based on the Bollinger Bands and RSI. This is pretty crazy, because it means BTC could rise as high as 35k in the coming weeks. I suspect one of these catalysts will be Tesla’s upcoming stock split, which has historically caused Tesla’s stock to rally. There’s also Blackrock and Coinbase, but more on that in a moment.

First I need to quickly address a headline that has some crypto holders concerned. That’s the news that Microstrategy CEO Michael Saylor will be stepping down and serving solely as the company’s executive chairman. This has many people wondering whether Microstrategy will sell its massive BTC stash. As far as I can tell, there’s no chance of this happening because Michael has more than 60% of the vote at the company thanks to his shares.

But you never know, crazier things have happened in crypto…

🌑 Aladdin's Carpet To The Moon 🌑

For those of you who watched my livestream this week, you will have seen me talk about the latest deal between Coinbase and BlackRock. As I mentioned, this is likely to not only be a big deal for Coinbase but also the Bitcoin markets.

Now, I know that BlackRock isn’t everyone’s favourite institution. Heck, I even did a video on how the asset manager wields its influence in all aspects of the financial world.

But, what this deal enables is a way for literally trillions of institutional capital to potentially invest in Bitcoin. That’s because the deal will allow BlackRock’s clients, which use its proprietary Aladdin risk management platform, to invest in Bitcoin. I talked about this platform in more detail in the aforementioned BlackRock video.

Aladdin has basically become the operating system of BlackRock that is not only used by 13,000 of the company’s employees, but also by nearly all its competitors. Other asset managers like State Street & Vanguard use the platform to manage their Fixed Income portfolios. There are also a raft of other asset managers and corporations, such as Google and Apple, that use it.

In total, over 240 clients use Aladdin with over $21 Trillion in AuM managed through the platform. All of these clients will now have the ability to allocate that vast AuM to Bitcoin through the Coinbase Prime integration.

Now of course, this still requires these institutions to be clients of Coinbase, but that’s not a massive hurdle to jump, especially given that they use other third party custodians to hold their other assets. This is part of the reason why the announcement sent COIN skyrocketing - the market knows it’s a big deal for Coinbase’s institutional business.

So, what does this show us about institutional appetite for Bitcoin? Well, according to BlackRock’s global head of strategic ecosystem partnerships; “our institutional clients are increasingly interested in gaining exposure to digital-asset markets.”

Quite simply, BlackRock would not be doing this if it didn’t see this demand from its clients. What this integration will now allow these clients to do is effectively manage digital asset risk in the context of their broader portfolios - all on a platform they are intimately familiar with.

Not only that, but this also provides an easy onramp for those other asset managers that previously were sceptical about investing in Bitcoin. The complexity and risk of adding it to their portfolio is dramatically simplified. Fewer barriers to adoption means more adoption - pretty simple.

It will be interesting to see exactly how much AuM this integration brings to Coinbase Prime over the coming months - that could be a great bellwether of how interested the institutions really are.

💸 Inflation Is Here To Stay 💸

While the Federal Reserve raises interest rates to fight inflation, the US Department of the Treasury is preparing to spend trillions of dollars at the behest of US politicians.

Their latest trick? Renaming the Build Back Better bill as the ‘Inflation Protection Act’, and including up to $700 billion as part of the 700-page package. You know it’s bad when even the mainstream media is questioning whether it will bring down inflation at all. Spoiler: it won’t.

What’s funny is that the Inflation Protection Act is just one of many massive bills that US politicians have been pushing through. Back in March, the US president signed off on an unprecedented $1.5 trillion spending package. Clocking in at a whopping 1000 pages, the aptly titled ‘Consolidated Appropriations Act’ is likely to cause even more wealth concentration among the upper echelons, thanks to the appropriation of tax dollars.

In all seriousness, it’s possible if not likely that it’s mostly the fiscal policies of governments which has caused all the inflation we’re experiencing now. After all, many governments handed out billions and in some cases trillions of dollars directly to consumers. Although the monetary policies of central banks certainly didn’t help, they’re not the ones who pulled the trigger. It looks like inflation is here to stay, and not just because of government spending.

The pandemic and the war in Ukraine revealed, and in some cases created, structural issues in global supply chains. This is something that was recently pointed out by Credit Suisse analyst Zoltan Poszar, who believes the Fed will have to raise interest rates as high as 6% to destroy demand. If you watched yesterday’s video about the Fed’s press conference, you’ll know 6% is nearly double its target, and it would probably cause a very severe recession.

The worst part is that while this deep recession could reduce inflation, it’s unlikely to eliminate it, simply because of the reordering of said supply chains. The elephant in the room in this regard is arguably Taiwan, with the United States and the European Union spending billions to bring chip production onshore ASAP. Although this is being pitched as ‘competition’ against Asia, it’s clear that it’s an acknowledgement of China’s next move. I will be covering this in greater detail in a video later this week - so keep your eyes peeled.

Another pressing issue is energy. Thanks to the constant underinvestment in the traditional energy sector thanks to ESG, we are likely to see high energy prices for the next few years until the investments return and new facilities are set up. How long exactly? Well, Wells Fargo noted in a 2021 commodities report that the average commodity cycle lasts between 10 and 15 years. The bank believes the cycle began in 2020, so it looks like it will end in 2030-ish. Great!

Now, it’s important to note that inflation won’t be felt equally around the world. If you’re lucky enough to live in a country that’s self-sufficient like Brazil, or at least has the ability to be self-sufficient, like the United States, then chances are you won’t feel the squeeze as much as everyone else. For us lucky folks, we’ll have to find more innovative ways to beat inflation.

🔥 Deal of The Week 🔥

One of the biggest challenges to topping up that portfolio with fresh fiat is finding an easy to use fiat gateway. That’s especially an issue for those Europeans out there.

The simplest and fastest solution we have found has to be the Swissborg App.The Coin Bureau team actually use this app themselves to cashout crypto to their bank accounts. Sometimes those cashouts are done in a matter of minutes.

Dozens of cryptos can be traded on the app and if you deposit more than €50, you’ll get up to €100 FREE!

👉 Download the Swissborg app

🔮 Video Pipeline 🔮

  • Taiwan Crisis: Why It’s Not What You Think
  • The perfect cryptocurrency!
  • Is the housing market collapsing?
  • DappRadar Report: Bullish for crypto!

🏆 What's New At This Week? 🏆

Bitstamp Review 2022: Secure and Simple Cryptocurrency Exchange

That’s about all for this week. However, the whole Coin Bureau Team wanted to give you a big thank you for continuing to support our work.

Guy your crypto guy

Guy Turner

Guy is one of the founding members and face of the Coin Bureau. Like many of us, he is just an average joe who became “crypto curious” back in 2013. After recognising the potential of blockchain technology, Guy set off on a mission to create crypto educational content, working with others to start the Coin Bureau website and released our first video on YouTube in 2019. You can learn more about him in his Who is Guy? blogpost.

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