We discuss Chair Genslers 4 questions speech, the conference and the long term bull thesis…
Read the video transcription
Hello everyone. This is Dave Weisberger, CEO of Coin routes for this week in crypto on location at Bitcoin 2022, Miami. With 25,000 plus of our best friends in crypto bitcoiners are descending on what we hear is the world largest financial conference. It’s interesting that this is taking place this week right after Commissioner Gary Gessler delivered a speech that people are going to remember for a very long time. I could talk about the price action in bitcoin and I will, it’s had a little bit of a softening as announcements that made on the stage. People get excited and pumped up and then reality sets in and it comes settling back down. But in general, we’re still in the same trading range we’ve been in for basically months, still towards the top of the range, and people are still cautiously optimistic. Let’s talk about chair castler and what he said. Interestingly, he claimed to have four questions for crypto. And really what it boils down to is yet another attempt to talk about why he should regulate the sector and effectively suppress what investors really want.
But let’s talk about what he said, because the first thing that he said that he’s never admitted before is that there is a need for crypto exchanges to be able to trade both commodities, i.e. Bitcoin and securities. What he thinks most other crypto tokens are, that is historic because honestly, it has never existed before. His goal, however, is going to rebound upon because what he said was perhaps it’s a way for both the SEC and CFDC to regulate the same exchange, the same market. This is difficult and industry is going to push back on this rather dramatically.
Even more importantly, however, is the fact that what he missed: these exchanges need to trade bitcoin and securities in the same transaction, if you think about why digital assets have a better market structure, it’s because you could trade, for example, let’s pick chain links. Someone might call that a security, someone may call it not. Right now it’s considered a crypto. But you can trade chain link against dollars, against euros, against pound sterling, against yen, against bitcoin, against ethereal, against stable points, all on the same platform. Now consider a transaction of chain link against bitcoin. You’re going to tell me that on the same trade we have the CFDC regulate bitcoin and the SEC regulate chain link? It simply won’t work. The rules that we have today, security laws don’t work for today. Before today, Mr. Genser always said we could use security laws, as they work for 70 years. While that’s absurd on his face, the fact of the matter is he essentially opened the door to prove that he’s been wrong in everything that he said.
That’s the first thing that happened this week. I think it’s very important from a crypto perspective. Obviously, people are talking about the conference, they’re talking about Jack Mahler saying that now strike is going to be able to be used for transactions globally. A little known side effect of this is the potential for people to use bitcoin to pay for things without having to be KYC with the vendor they’re paying for. What does that mean? It means an extra fiat on off ramp specifically for small transactions. But it’s smoothing the acceptance of bitcoin into the basic system. Yes, some folks seem to be on bitcoin because that’s what we are. But for people who are looking at the market, people who remember the fact that less than a month or two ago, justin trudeau rang the bell and told people, you need to be censorship resistant because we are the government might take your assets away. That’s important. So we are seeing more and more reason to believe that bitcoin will be accepted worldwide as historic value.
And remember, the reason that bitcoin trades the way that it does is effectively being treated as an option. Most buyers of bitcoin are the people who believe in a long-term potential by a factor of 10. One other statistic I saw this week is that we’re literally reaching an all time high of points migrating off exchanges at an all time high in percentage of points held in longer-term wallets. What is this indicative of? Well, my thesis, as you know, if you’re watching this series, is that the rally that we saw from the lows up into the mid 40s was driven by fundamental long-term buyers. Those long- term buyers tend to be more basic. These statistics corroborate that and indicate that while we may be soft now, the uptrend is still clearly established. Sure, there’s technical levels and people are looking at 42,000 as a technical level, but the reality is, I think the possibility of a new bull run is quite high. More importantly, I think the possibility of winning a battle for better regulation United States within actually help. So stay tuned.