This week in Crypto: August 5, 2022

This week features a rant against the foolishness of Bitcoin Maxis invoking securities laws against Ethereum as we recap the news of the week.

Read the video transcript

Well, good afternoon, everyone. It’s Dave Weisberger, the CEO of Coin Routes. It’s Friday, August 5th, and it’s time for my weekly recap This Week in Crypto. Well, let’s start with the boring stuff. The market for Bitcoin and Ethereum are within a few percentage of points of where they were last week at this time, not a whole lot has happened. Volatility has been rather muted. In short, basically even for crypto basic summer doldrums. Over the course of the week, nothing has changed. My fundamental thesis that I talked about last time, which is that we are in the eye of a hurricane.

I still believe that August will see very little downside pressure in a strong sense. And during the month I still expect us to kind of float back up towards what used to be support in the old trading range between 28 and 32 thousand Bitcoin, but with low volume and low conviction in that rally. At the end of the day, I still think in the fall we’ll see something else happen, some other shooting drop in the global economy. Not 100% sure, but the fact of the matter is there’s still a lot of cross currents going on. All of that said, there are a few important news stories that we should talk about.

One that hasn’t happened yet, which is from the trading side, the Eth merge. More and more people are talking about it. The reality is the merge is causing certain people on the bitcoin side to say dumb things. And I’m talking about you, Michael Sailor, and you, Max Kaiser, and you, Corey Kirstein, who talk about Eth as an unregistered securities offering and invoking the name of the SEC, because they are so effectively butthurt about people talking about Ethereum. Well, that’s insane.

And I want to be really clear about this. I am far from an Eth maxi. And point of fact, if anything, when it comes to bitcoin being a store of value, I’m a bitcoin maxi. I don’t see any other coin as the base layer for internet transactions as we move forward. But Ethereum does have a use case, whether it’s controlled centrally or not, there are many, many reasons why Michael Sailor talks about in fact, all of the above have made many cogent arguments about where the risks are in the centralized notion of Ethereum, how proof of stake is even more centralized and not decentralized, regardless of what apologists would say, you only need 32 Ethereum to be able to run a node say. The fact is it’s more centrally controlled. There is more influenced by key individuals than there are in bitcoin and the way it’s covered. So that is all true, but the idea of invoking the SEC and the dreaded word securities is insane.

I’m going to say this really slowly, Michael Sailor, please talk to your compliance officers. Talk to people who understand securities laws. They don’t work for crypto. There is no way that a DAO can salvage any way of compliance with SEC disclosure rules because there is no board of directors, there are no audited financials. There are many, many other things they cannot do.

The trading of securities cannot happen on a platform on the same platform as trading versus commodities. So the eth bitcoin cross pair cannot operate under SEC rules. Settlement cannot happen for digital assets because there’s a need for transfer agents, and the custodial process is different. All these rules need to be rewritten. So to claim that they should somehow be using securities laws because you’re unhappy with the press that they’re getting is insane.

Stick to the vital arguments you make in terms of decentralization, in terms of the characteristics of money, characteristics of value. That’s where the argument should be, and that’s where it should stand. That rant out of the way. The other big news for this week, which is certainly very positive from the bitcoin perspective, is the news that BlackRock has entered into an agreement with coinbase prime to provide access to BlackRock’s customers to get exposure to bitcoin. I didn’t say ethereum, I didn’t say crypto, I said bitcoin. Now, eventually that might happen, but right now it’s about bitcoin.

This is incredibly positive. I know in the crypto community, many people go, not my keys, not my coins. This is unreal. It’s financial. We don’t need BlackRock. They’re one of the agents of evil. My favorite exchange this week was with my friend Scott Melker, who said it’s sort of like rooting on the Empire in a situation. But the reality is, and he was talking about Star Wars. So I sent him back a picture of “So be it”, from the emperor. Because the reality is there are many people in this planet who are not going to open a hardware wallet.

Think grandma. And they are not going to want to trade at bitcoin in any way other than holding in an account that they understand. Like a brokerage account or a bank account. And once they can do that by a brokerage account or an asset management account, they will want exposure. That exposure gets them invested. Once they are invested, they have a stake in the game. The more people that have a stake in the game as bitcoin as a store of value, the closer we get to bitcoin becoming digital gold. Might remind everyone in the industry that to achieve digital gold status would mean 20x from here in price. Does that mean it will back all currencies? No.

Does that mean it becomes easier for governments to make it a sovereign currency? Absolutely, yes. So having the world’s largest asset manager providing access to bitcoin for all of their clients is a big deal, and we should represent it and understand it as such. Lastly, we had a hack in Solana that of course the mainstream media took out of context. The mainstream media was screaming, oh, this proves that blockchains are inherently unsafe, etc, etc.

For effectively what happened here was one hot wallet provider on the internet sent the seed phrases, which is essentially the keys, effectively over unencrypted text to one of their servers. Doing so would be more or less like having a bank leaving their door open at night, the door to the vault open at night, and turning all the lights off and all the security cameras around said vault and said door. If that happened, would the headline bank was criminally stupid and was robbed? Or would the headline be banks are inherently unsafe? I think we all know which one that would be and that’s exactly what went on.

So that’s also kind of important for all the people who spread fud fear and certain doubt about crypto. I think the price should stop there. Although it is worth noting that we had yet another rate increase this week from the Bank of England. And once again, as I said at the beginning, the market yawned. Maybe something will happen over the next week. Frankly, I expect markets to be quiet, but we shall see. In any case, thank you and have a great week.

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