This Week in Crypto March 18

We discuss the FOMC, proposals by Representative Emmers and Senator Warren and touch on the debut of APE.

Read the video transcription

It’s Friday, March 18th. I’m Dave Weisberger, CEO of Coin Routes. And it’s time again for this week in Crypto. Well, this Week in Crypto we’ve had a few things that are worth commenting on. The war still rages on, risk appetites are still lower. But we’ve had a few things that are worthy of comment first. We’ll start earlier in the week with the FOMC meeting where the Fed, as this commenter has said many times, is still trapped. And the word is forced due to the harsh economic realities, to only raise rates a quarter of a percent, considering 8% roughly inflation. That means for those who are scoring at home that the Fed has now rocketed rates up to a negative 7.5% in real terms overnight. Not exactly hawkish, but their wording is hawkish and they’re trying to use that jawboning to bring the markets to a soft landing. I doubt that will happen. And as we’ve seen, the actual balance sheet of the Fed increase began this week. If you look at the Fed website, you can see all about it. So what did markets do? They rallied, of course, because markets realize the Fed is not going to punish them.

And so speculative assets were higher, nasdaq rallied, etc. The next thing that it’s worth talking about is kind of an interesting juxtaposition between two different political proposals that have come out that affect the crypto space. The first one worth talking about came from Congressman Tom Emmers and he is trying to propose that the SEC be restrained in their use of their subpoena power and their request for information power. Now, this doesn’t sound like much to people because most look at the SEC and say, well, of course they should only request information. But what people don’t realize is when the SEC starts requesting information, it could cost potentially millions of dollars in time and effort and outside counsel for firms to respond. In reality, what it is, is a pseudo enforcement mechanism the SEC has that has basically no due process, no presumption of innocence, and frankly can slow down innovation or potentially even bankrupt or cause firms not to be able to proceed for businesses. And we’ve seen this multiple times, but it’s very important and it’s good to see people in Congress actually understanding this. At the same time. On the other side, we have Elizabeth Warren who is proposing new rules to basically have what some have jokingly called, but probably accurate, a panopticon surveillance state over crypto.

And her justification is some thinly veiled construction that crypto can be used to evade sanctions. What’s amusing about that is there was a great exchange that you can see on YouTube, I saw it on Twitter, between Chain Analysis and Elizabeth Warren where she’s asking questions, not liking the answers, and then proceeding to try to talk over the responder. The reality is, as Chain Analysis pointed out, the use of mixers is dramatically smaller than the amount of money that it would take to try to evade sanctions. The ability of the authorities to track down bad actors using Bitcoin is well documented and there’s basically very, very little evidence, if any, to indicate that crypto will help anything connected to Putin, avoid anything, but never let a good crisis go to waste. So having failed in her attempt to marshal the forces of environmentalism into the anti-bitcoin mining, now she’s on to something else. Cut through all the crap. And what was really happening is you have a person who wants the government to control the financial sector along with her cronies that are probably her donors, and Bitcoin effectively gives power to the individual and that can’t be tolerated by somebody who wants government control. So that’s what we see.

The last thing we’re talking about is the price action, which to some degree is boring. Now Bitcoin is still in a range, it’s pushing towards the top of its range now at 41,000. But the reality is it’s in that same range that I’ve been talking about for weeks, between the low 30s and the low 40s, and we’ll see a resolution at some point when risk appetites start to gain. But it is notable that Ethereum has started to outperform this week as their highly anticipated merge comes closer. Ethereum to Bitcoin is starting to technically break out. It’s trading around 2800, where it was like 2400 not too long ago. We’ll see if that means anything.

The last trading thing of the week that’s interesting it’s worth noting about the launch of Ape. Ape, the token that is associated with the Dow, that’s associated with the board ape Yacht Club. It is a token for a distributed autonomous organization. It is officially not related to the software company that produces the board apes. But what’s interesting about this token, other than the fact that since launch on exchanges it’s rallied fairly significantly, but it fell rather significantly from its AirDrop supposed price to when it started trading on exchanges. So it’s a lot of volatility is the very, very fast coordinated listing of that token by almost every exchange,that is notable. So we’ll see how that goes.

But it seems to be that everybody decided that because it was associated with the Dow, it was safe for all the US-based exchanges. Gemini, I think, was the first, followed by Coinbase and others in due course, FTX, etc. And so it’s an interesting coin. We’ll see where it is, it’s in the top 40 right now. We’ll see how strong that community is and whether it can gain ground on other communities tokens that are in the ecosystem. Well, that’s all we’re going to talk about today. We like to keep these things short. So have a great week and stay safe out there.

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