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Well, hello. It’s Friday, May 27th. It’s time for this week in Crypto. I’m Dave Weisberger, the CEO of Coin Routes. And let’s get right into what happened this week because there are a few topics that should be discussed. First, what we’re seeing in the markets. We are seeing range bound markets. We’re seeing Bitcoin towards the bottom of its range, but still hanging in there. We’re seeing Ethereum sell-off and all coins get pummeled. This is in a backdrop of a week where the stock market has been rallying, so people in the crypto space can’t really blame the risk off mentality or the fact that the Fed is rising rates.

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In fact, with rumblings out of the Fed that September might be the last rate increase for a while. I think that’s allowed stock markets to rally, but hasn’t helped crypto. The reason, I believe, is exactly what we talked about last week, which is with the confidence destruction that occurs when a $50 billion set of assets gets blown away, such as what happened at Luna and Terra. The reality is it’s going to be a while before people get really excited about crypto projects, except for what they really understand. Add to that the fact that this week marked the unlock of an eight year ethereum ICO slug of coins, and it’s pretty easy to see why. There’s been a lot for sale in the crypto markets.

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That said, they’re not collapsing, they are merely doing what we expect them to do on a low volume, bottom of the range trading. All of that said, there have been many stories which actually are quite bullish for what’s going on in the crypto market long term. Specifically for Bitcoin, Germany released information about potential taxes where if you’re a long term holder of bitcoin, you won’t be subject to capital gains tax. That could be massively bullish, particularly if German ideas get replicated throughout the EU.

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And if US decision makers even look to give clarity on long term capital gains, that would be helpful. So that’s a big thing. We also saw this week something that I’ve already commented on at length and actually wrote about it, which was the CFTC holding a hearing on FTX’s proposal. Without getting into the details, all I could say is that Sam acquitted himself well, that the industry as a whole is still innovative, and hopefully the people at the CFTC will continue their recent habit of supporting innovation. We could talk about that at length. Not really the best time or place for it. But the other really interesting thing that happened this week, actually about this morning is an editorial, or a very quick one, and a proposal for joint SEC CFTC cooperation from commissioners Fam and Purse. And they basically called for joint hearings in order to work with the industry to understand whether or not rules that are archaic could be adapted, what the appropriate regulatory framework should be. This matters now. It is clearly not certain that the chairs of either the CFTC or the SEC will agree to such an idea, although if they were to do so, it would be a major step forward.

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The US suffers from regulatory overlap or regulatory competition that no other country really has. The genesis of that, for those who don’t know, is that the SEC was founded and is controlled by in Congress the financing the Finance and Banking Committees and Subcommittees, whereas the CFTC, because it started with agricultural products, is under the Agriculture Committee. Anyone who knows anything about the way Congress works in the United States, committee assignments are extremely important, particularly when donors are lined up. And in anything that’s financial, there are significant donors. So expecting those two agencies to be collapsed is essentially expecting congresspeople to work against their own financial interests in their campaign coffers.

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I personally don’t think that’s likely to happen. And as much as it should happen, the best we can hope for is that the agencies will work together. That would be good because there are many areas where their rules overlap. And as I said in a few weeks ago, when you look at crypto regulation, it is important to understand that you very often will have individual products that actually are made up of commodities and securities. To give an example, let’s say for the sake of argument that someone decides that stablecoins are securities and bitcoin is a commodity.

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Well then bitcoin trading as a pair against USDC a stablecoin. That one instrument would need to be regulated in all trades by two different agencies. Since those agencies rules overlap, that doesn’t work. That’s the kind of thing that having joint hearings would bring to the fore immediately and we would see why we actually need new rules. So from the perspective of the industry, that would be an incredibly welcome development.

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Well, stay tuned and see how things develop over the next week. This is the holiday weekend coming up, so I’m going to keep it short. I encourage all of you to read “It is a choice”, my most recent blog post, which explains that the fundamental fallacy that was invoked by most commenters at the CFTC hearing on FDX was that they framed it as a choice between a real-time non-intermediated system and today’s current massively intermediated system that does risk once a day. The reality is they can coexist for quite some time and in fact the FTX could be considered an experiment and I personally believe it’s the best or mousetrap and will ultimately win.

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I think they believe it too, which is why they are objecting to it with such hysterical ferocity. But we shall see. In any case, enjoy your weekend, everybody. Thank you.