The Wolf Den #757 - Gary Gensler Is Screwed
Overreach much?
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In This Issue:
Gary Gensler Is Screwed
Crypto Town Hall Is Going Places
Sign Up For OKX!
Bitcoin Thoughts And Analysis
Altcoin Charts
Legacy Markets
EDX Opens For Trading
Deutsche Bank Has Entered The Chat
Checkout This Rabbit Hole
WisdomTree And Invesco Join The ETF Fray
Big Institutions Prepare To Deploy $$$ Billions Into Crypto As SEC Goes To War! | Cheds + Alfred
Gary Gensler Is Screwed
The narrative of authority overreaching its boundaries is as ancient as human civilization itself. The moment the earliest human discovered the power of wielding a stick to assert his desires marked a turning point in history. From then onwards, both individuals and societies have wrestled with the delicate equilibrium between granting power and safeguarding against its potential misuse and abuse.
This struggle has evolved dramatically in our contemporary digital era, especially in the context of cryptocurrencies. The issues of power dynamics and authority have surfaced as critical points of contention. The attention of Congress has not fully shifted towards the crypto industry yet, but the urgency is escalating, and consequential decisions are on the horizon.
If you keep up with the cycle of crypto news and its intersection with authority, you might have come across discussions around the significant questions doctrine. Although the precise extent and definition of this doctrine remain ambiguous, and it has not been explicitly named as the basis for any decision yet, its influence is undeniably profound. As the doctrine continues to shape our understanding of authority, it holds the potential to significantly impact our lives in the near future.
To introduce the major questions doctrine, I am going to share a recent excerpt from the Congressional Research Service:
Congress frequently delegates authority to agencies to regulate particular aspects of society, in general or broad terms. However, in a number of decisions, the Supreme Court has declared that if an agency seeks to decide an issue of major national significance, its action must be supported by clear congressional authorization. Courts and commentators have referred to this doctrine as the major questions doctrine (or major rules doctrine). The Supreme Court never used that term in a majority opinion prior to 2022, but the doctrine has recently become more prominent.
The doctrine is straightforward — authority needs to be checked in areas of vast “economic and political significance.” The researchers assert that the usage of modest, vague, subtle, and ambiguous language does not equate to Congress bestowing an exceptional degree of regulatory authority. Following are a few instances when the Supreme Court employed the doctrine to dismiss agency assertions of regulatory control:
The FDA’s regulation of tobacco.
The Attorney General’s regulation of assisted suicide drugs.
The Internal Revenue Service’s decisions over federal healthcare.
The Occupational Safety and Health Administration imposing COVID-19 vaccinations.
For obvious reasons, these are areas of serious national concern, but let’s tie this into our industry and why this matters. Our first order of business begins with Coinbase.
On April 19, the Coinbase legal team submitted a response to the SEC’s Wells Notice and included mention of the major questions doctrine: “separately, a court will also have to address the Major Questions Doctrine and whether the Commission is exceeding its statutory authority in this matter.”
Coinbase continued, “An agency declaration that the majority of all digital assets, or more shockingly that all digital assets other than Bitcoin, are unregistered ‘securities’ that cannot legally be traded constitutes an obvious assertion of regulatory authority over a significant portion of the American economy.”
Coinbase contends that Congress is the appropriate entity to initiate regulation of the industry, subsequently correctly distributing and assigning authority over time. Until such a process takes place, the argument is that the SEC lacks the grounds to claim authority through enforcement over the industry. This leads to the next point, and the increasingly loud calls to #FireGaryGensler. I may sound like a broken record, but the evidence of Gensler's questionable activities accumulates day by day.
For our industry, the likely scenarios appear to be one of two: either Gary Gensler is relieved of his position and replaced by someone more competent, or Gensler takes some conciliatory action to lessen the criticism he faces. It's hard to envision a scenario where Gensler continues his current course without facing significant pushback, particularly given the resilience of the crypto sector. I wager that the breaking point is more likely to occur on their side than ours.
Gensler is well aware that fast-tracking the approval of the BlackRock ETF could momentarily pacify the crypto community, satisfy Wall Street, and extend his tenure. However, if he remains unyielding, the pressure is only set to escalate. The crypto community is on the cusp of convincing enough external parties that we have reached a point of significant economic and political impact - that's how we secure our victory.
Blockchain, at its core, is a revolt against centralized authority - a technology with the potential to challenge age-old narratives. All that remains for us now is to persevere in our struggle, adapting as the situation evolves. Victory is in our sights, it's merely a question of when, not if.
Crypto Town Hall Is Going Places
We're just at the beginning of our journey with CryptoTown Hall, and there's so much more work ahead. Behind the scenes, we are making every effort to advance the cause of cryptocurrency and to bring you the highest quality content. I cannot express my gratitude enough for your continued engagement, even during slower news periods. Just imagine the potential when the bull market takes off.
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Bitcoin Thoughts And Analysis
Look at that potential weekly candle! Last week we had the hammer right into the key support at $25,212 and now we are seeing extreme bullish follow through, currently engulfing months of price action in a single week.
This looks to be a potential higher low in the new bullish cycle, a recapture of the 200 MA as support and even potentially a move above $28,600 and back into the major range that spans to the all time high.
As a note…
I have been “calling” $25,212 on Bitcoin like a mantra for months. In newsletter, on YouTube, on Twitter. You have seen it. My subscribers get impatient and want more trades and ideas, but only takes one or two a year if you are right.
I have stopped aggressively sharing day trades and short term ideas, because I think it makes more sense and suits my life better to take large swing trades at key levels. That’s how I have always made the most money.
What a beautiful chart. Massive daily candle on nice volume, breaking through descending resistance, the 50 MA and 100 MA.
There will be pullbacks, but this looks VERY bullish.
Thank you, BlackRock.
Altcoin Charts
Altcoins don’t look terrible… against USD. But right now BTC rules all, and the trend looks likely to continue. Anyone who has been here a while knows that there are certain times when it makes the most sense to focus on Bitcoin, and this feels like one of them.
As I tweeted yesterday… This is the part of the cycle where bitcoin rises and your altcoins are “even in USD” and completely rekt vs. $BTC. Probably gets a lot worse before the cycle turns and altcoins outperform.
That is my base case for the moment. I expect altcoins to get even cheaper relative to Bitcoin, although anything can happen.
Legacy Markets
Stocks wavered as ongoing consumer price pressures in the UK served as a warning for global central banks grappling with inflation, and markets speculated they're nearing the end of their tightening cycles. The S&P 500 experienced fluctuations after its first consecutive losses in nearly a month. FedEx Corp. saw a drop after its outlook missed analysts' estimates due to reduced demand. Traders increased bets on further Bank of England rate hikes following another surprise inflation reading, forecasting the benchmark to reach a level unseen since the turn of the century.
The UK's inflation situation may prompt a more hawkish stance from Federal Reserve Chair Jerome Powell in his upcoming semi-annual report to Congress. Despite 12 consecutive Bank of England hikes, inflation persists, which may urge other central banks to reconsider an easier policy.
Meanwhile, the Q2 stock rally has faltered as investors grow cautious amid high valuations, hawkish Fed signals, and bullish positioning. Goldman Sachs strategists recommend hedging S&P 500 exposure, predicting it could climb to 4,700 in 12 months but also acknowledging a drop to 3,400 if a recession looms.
Ahead of Powell's testimony, the dollar rose while the pound declined following the UK inflation report. UK benchmark gilt yields also increased.
Key events this week:
Federal Reserve Chair Jerome Powell delivers semi-annual congressional testimony before the House Financial Services Committee, Wednesday
Chicago Fed President Austan Goolsbee speaks, Wednesday
Eurozone consumer confidence, Thursday
Rate decisions in UK, Switzerland, Indonesia, Norway, Mexico, Philippines, Turkey, Thursday
US Conference Board leading index, initial jobless claims, current account, existing home sales, Thursday
Fed’s Powell delivers testimony before the Senate Banking Committee, Thursday
Cleveland Fed’s Loretta Mester speaks Thursday
Eurozone S&P Global Eurozone Manufacturing PMI, S&P Global Eurozone Services PMI, Friday
Japan CPI, Friday
US S&P Global Manufacturing PMI, Friday
St. Louis Fed President James Bullard speaks, Friday
Some of the main moves in markets:
Stocks
The Stoxx Europe 600 fell 0.1% as of 10:24 a.m. London time
S&P 500 futures were little changed
Nasdaq 100 futures fell 0.1%
Futures on the Dow Jones Industrial Average were little changed
The MSCI Asia Pacific Index fell 0.7%
The MSCI Emerging Markets Index fell 1%
Currencies
The Bloomberg Dollar Spot Index rose 0.1%
The euro was little changed at $1.0924
The Japanese yen fell 0.3% to 141.95 per dollar
The offshore yuan fell 0.2% to 7.1940 per dollar
The British pound fell 0.4% to $1.2709
Cryptocurrencies
Bitcoin rose 2.5% to $28,883
Ether rose 1.4% to $1,810.87
Bonds
The yield on 10-year Treasuries advanced one basis point to 3.73%
Germany’s 10-year yield was little changed at 2.41%
Britain’s 10-year yield advanced four basis points to 4.38%
Commodities
Brent crude was little changed
Spot gold fell 0.1% to $1,934.10 an ounce
EDX Opens For Trading
As anticipated, the recent BlackRock announcement has seemingly catalyzed a surge of institutional interest in the cryptocurrency sector. EDX, a name that has been subtly present in the crypto arena since September last year, is finally poised to launch its crypto trading platform. While the website remains minimalist in its design, a public-facing team and new drop-down menus have been added.
Interestingly, the platform seems to rewind the clock to pre-2017 times, offering only Bitcoin, Bitcoin Cash, Litecoin, and Ethereum, with a conspicuous absence of any stablecoins. Moreover, there is no mention of them in their press release. EDX's presentation gives the impression that it's geared towards a more traditional audience, which may seem out of step with the dynamic crypto landscape. Comparatively, I prefer Coinbase, which, in my opinion, is ten times superior.
Deutsche Bank Has Entered The Chat
Deutsche Bank, Germany's largest financial institution with a balance sheet of $1.4 trillion, is actively seeking permission to offer custody services for digital assets like cryptocurrencies. The regulatory authority overseeing this, BaFin, has a track record of granting crypto custody licenses to numerous firms, which bodes well for Deutsche Bank's request.
This development is yet another indication of the growing institutional interest in cryptocurrencies. The approach is gradual at first, but eventually gains momentum, as institutions are beginning to acknowledge the potential of the crypto market. When these institutions are fully prepared, they will leverage all their resources to market, disseminate, and push their products to their customers.
Checkout This Rabbit Hole
A Reddit user, displaying an abundance of curiosity, posted a peculiar discovery concerning a "utility closet" located in the UK that is registered as the address for Binance and 2,400 other companies. While this practice may initially seem bizarre and dubious, it is, in fact, quite commonplace in the business world. Reasons behind this tactic can vary widely, encompassing tax planning, privacy protection, business initiatives, mergers and acquisitions, as well as real estate investments.
Although I'm not an expert in this field and haven't personally engaged in such practices, I do know that this phenomenon isn't exclusive to the UK, it's prevalent in the U.S. as well, with Delaware being a particularly favored state for such registrations. While the crypto world often faces scrutiny for its peculiarity, it's worth remembering that the broader business landscape has its share of idiosyncrasies too.
WisdomTree And Invesco Join The ETF Fray
When it rains, it pours. And now the BlackRock has applied for a Bitcoin ETF, it’s a hurricane.
The competition to launch a spot Bitcoin exchange-traded fund (ETF) in the U.S. is escalating, with two additional filings submitted to the Securities and Exchange Commission (SEC) within the last 24 hours. These were lodged by asset management firms Invesco and WisdomTree, who have both previously attempted to launch Bitcoin ETFs, only to be thwarted by the SEC.
These filings follow BlackRock's recent application for a spot Bitcoin ETF. As of now, the SEC has only approved Bitcoin ETFs linked to U.S.-traded futures, citing the absence of proper cross-exchange market surveillance as a reason for not approving a spot Bitcoin ETF.
Invesco, in its application, argued that the U.S. is an exception among major markets for lacking a vehicle for spot exposure. The company noted that investors in many other countries, including Canada and Brazil, can gain exposure to Bitcoin through traditional exchange-listed and traded products. To alleviate concerns about market manipulation, both Cboe and BlackRock have entered into "surveillance-sharing" relationships with spot Bitcoin platforms.
Big Institutions Prepare To Deploy $$$ Billions Into Crypto As SEC Goes To War! | Cheds + Alfred
I am joined by my favorite guests: Mike Alfred and Big Cheds!
The views and opinions expressed here are solely my own and should in no way be interpreted as financial advice. Every investment and trading move involves risk. You should conduct your own research when making a decision. I am not a financial advisor. Nothing contained in this e-mail constitutes or shall be construed as an offering of financial instruments or as investment advice or recommendations of an investment strategy or whether or not to "Buy," "Sell," or "Hold" an investment.
Great job of explaining why Gary Gensler in the words of Brando “You're an errand boy, sent by grocery clerks, to collect a bill.”