1/ If you haven't noticed, there is quite a bit of chatter around the water cooler about an executive order coming out as early as next week from the White House regarding cryptocurrencies.
I'm going to present the counter narrative argument, that this is a good thing.
I'm going to present the counter narrative argument, that this is a good thing.
3/ Barron's, January 27th, 2022:
barrons.com
barrons.com
4/ Zerohedge, January 28th, 2022:
zerohedge.com
zerohedge.com
5/ As we can see from the titles on 2 out of 3 of them "As a matter of national security". Pretty scary, right?
But, all of these are quoting the original report from Bloomberg, in which National Security was used in this context:
But, all of these are quoting the original report from Bloomberg, in which National Security was used in this context:
6/ A lot of worry out there is that we will see something negative come out of this that impacts the entire cryptocurrency industry, in particular, the altcoins, and providing safety for Bitcoin and Ethereum, considering the government has essentially green lighted those.
7/ But, I beg the question, how much of our interpretation of this event is based on our emotions of what has happened in the market right now?
The price action has been negative for 2.5 months, and sentiment is in extreme fear:
The price action has been negative for 2.5 months, and sentiment is in extreme fear:
8/ Based on all of the articles I've read, which are all quoting anonymous sources who request not to be named, the potential Executive Order "would call for reports from various agencies due in the second half of 2022."
9/ So, none of these articles indicate anything will be happening in regards to actual regulation with an Executive Order coming out.
But that an order would request reports from various agencies detailing economic, regulatory and national security challenges, due later in 2022.
But that an order would request reports from various agencies detailing economic, regulatory and national security challenges, due later in 2022.
10/ A lot of the fear out there is that Bitcoin and Ethereum will survive this moment, and that altcoins will get squashed as securities when this executive order is released.
But these articles quoting these anonymous sources don't hint at that.
But these articles quoting these anonymous sources don't hint at that.
11/ The estimates are that 15-20% of Americans own cryptocurrencies. That would fall somewhere in the range of 30-50 million Americans.
Also, this year is a mid-term election year. And, we're looking at a narrative where these 30-50 million Americans will get hurt.
Also, this year is a mid-term election year. And, we're looking at a narrative where these 30-50 million Americans will get hurt.
12/ Currently, President Biden's approval rating has been going in the wrong direction, heading into this mid-term election.
13/ It's not the Presidency that's at stake in mid-term elections. It's the House and Senate, which the Democrats own right now. They own Presidency, House, and Senate.
Looking at Vegas odds, they are teeing themselves up for a huge defeat at midterms, losing House and Senate.
Looking at Vegas odds, they are teeing themselves up for a huge defeat at midterms, losing House and Senate.
14/ My point being, is that if Democrats are planning to hurt 30-50 million Americans, it seems like incredibly poor timing. They need a complete narrative shift heading into this mid-term election, and doing something like that seems counter-productive.
15/ So, is that really what is happening here? Are the headlines portraying what is really happening?
"Biden Admin To Regulate Bitcoin 'As A Matter Of National Security'"?
Based on my intuition, that seems the opposite of the state of their dire political position.
"Biden Admin To Regulate Bitcoin 'As A Matter Of National Security'"?
Based on my intuition, that seems the opposite of the state of their dire political position.
16/ They desperately need to be seen as heroes right now to flip this disapproval rating around.
And while the market is in fear, the headlines feed that emotion.
Concern Bitcoin and Ethereum are safe, and altcoins are going to get labeled securities:
And while the market is in fear, the headlines feed that emotion.
Concern Bitcoin and Ethereum are safe, and altcoins are going to get labeled securities:
17/ This is interesting, as we have been following Bitcoin and Ethereum, knowing that both of them have hit their 4.236 extensions on their market caps, getting rejected with negative price action with no news narratives.
Bitcoin:
Bitcoin:
18/ Ethereum:
19/ However, this narrative is really building a lot of fear about altcoins, and safety for Bitcoin and Ethereum.
In 2018, we know it was Bitcoin's retrace after the top was in that created the altcoin euphoria and mania phase.
In 2018, we know it was Bitcoin's retrace after the top was in that created the altcoin euphoria and mania phase.
20/ And right now, if we speculated that the market is in the same boat right now, Bitcoin has topped at the 4.236 extension... then it's as if we are in this moment right here.
The first initial knockback from the all time high.
The first initial knockback from the all time high.
21/ But, the narrative is fear driven about everything except Bitcoin and Ethereum, both of which have done the same thing.
That the executive order is going to come out and be terrible for altcoins. When we're at similar conditions to 2018.
Is that due to fear?
That the executive order is going to come out and be terrible for altcoins. When we're at similar conditions to 2018.
Is that due to fear?
22/ Or, is something entirely different happening here with this Executive Order, that Democrats are going to try to leverage as a benefit for themselves, politically?
What would happen if this report is not something as fear driven as "we must regulate for national security".
What would happen if this report is not something as fear driven as "we must regulate for national security".
23/ But, an attempt for Democrats to demonstrate themselves as leaders in this new technology, and wanting to help advance it, since 30-50 million Americans are so interested?
24/ Maybe along the lines of "America should be the leader in this technology. It is disruptive, and here to stay. We should be the dominant superpower. I've issued an Executive Order for agencies to provide reports so we have a full understanding of all positives and concerns."
25/ Could this not be the first step towards what we've always wanted? America to not get left behind?
Otherwise, if it truly is something as negative as many think, then we have to assume Democrats are throwing the mid-terms in the trash can.
And I just doubt that'll happen.
Otherwise, if it truly is something as negative as many think, then we have to assume Democrats are throwing the mid-terms in the trash can.
And I just doubt that'll happen.
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