The Wolf Den #982 - Gary Gensler's Villain Arc
He's the worst..
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In This Issue:
Gary Gensler's Villain Arc
Bitcoin Thoughts And Analysis
Altcoin Charts
Legacy Markets
Coinbase Introduces Smart Wallets
It’s Larry Fink O’ Clock
VanEck Is Very Bullish
Ethereum Is About To Skyrocket: Get Ready For A Massive Supply Shock
Gary Gensler's Villain Arc
There once was a time, a long while ago, when Gary Gensler wasn’t our villain.
Everyone knows the Gary Gensler story: He was a professor at MIT, advised MIT’s Digital Currency Initiative, and even taught a popular course called “Blockchain and Money.”
How Gary Gensler's character arc transformed from ‘hero’ to ‘villain’ remains one of this industry’s greatest mysteries. Was it the denial from Binance to be an advisor? Did Lizzy Warren make a seductive late-night phone call? Did he switch lives with his brother? Did he have a personal epiphany? We just don't know.
Nonetheless, today I have compiled a selection of statements made by Gary Gensler, tracing his evolution from a pro-crypto advocate to anti-crypto overlord, culminating in a recent, subtle yet significant shift. With each passing day, he appears less in control and more likely like he is being controlled.
I seriously feel bad for whoever is pulling the strings. This show sucks.
“Over 70% of the crypto market is bitcoin, ether, litecoin, bitcoin cash. Why did I that name those four? They're not securities. Three quarters of this market is probably not securities.” — sometime in 2018
“Blockchain technology has real potential to transform the world of finance. Though there are many technical and commercial challenges yet to overcome, I’m an optimist and want to see this new technology succeed. It could lower costs, risks and economic rents in the financial system.” — July 18, 2018
“While the CFTC has general anti-fraud and anti-manipulation authorities with regard to spot transactions in crypto cash commodities, such as Bitcoin or Ether,” — July 18, 2018
Did you know that Gary Gensler was an author for CoinDesk? On December 5, 2019, he wrote an article titled, “Even if a Thousand Projects Don't Make It, Blockchain Is Still a Change Catalyst.” Here are a couple of quotes from that piece:
“While we wait for crypto/blockchain success stories, it's already apparent that Satoshi's innovation is a change agent.”
“The potential this technology has to be a catalyst for change is real.”
Then, everything changed.. Gary Gensler was sworn into office as Chairman of the SEC. — April 17, 2021
“I believe we have a crypto market now where many tokens may be unregistered securities, without required disclosures or market oversight.” — August 3rd, 2021
“I am technology-neutral. I think that this technology has been and can continue to be a catalyst for change, but technologies don’t last long if they stay outside of the regulatory framework. I believe that the SEC, working with the CFTC and others, can stand up more robust oversight and investor protection around the field of crypto finance.” — September 14, 2021
“These stablecoins are acting almost like poker chips at the casino right now,” — September 21, 2021
“Of the nearly 10,000 tokens in the crypto market,[2] I believe the vast majority are securities. Offers and sales of these thousands of crypto security tokens are covered under the securities laws.” — September 8, 2022
“We don’t need more digital currency…we already have digital currency, it’s called the U.S. dollar,” — June 6, 2023
“We’ve seen the Wild West of the crypto markets, rife with noncompliance, where investors have put hard-earned assets at risk in a highly speculative asset class,” — July 19, 2023
Now for some commentary on the Bitcoin ETF.
“We had in the past denied a number of these applications, but the courts here in the District of Columbia weighed in on that. So we're taking a new look at this based upon those court rulings.” — December 14, 2023
“Importantly, today’s Commission action is cabined to ETPs holding one non-security commodity, bitcoin. It should in no way signal the Commission’s willingness to approve listing standards for crypto asset securities.” — Jan 10, 2024
“While we approved the listing and trading of certain spot bitcoin ETP shares today, we did not approve or endorse bitcoin.” — Jan 10, 2024
We are basically caught up to the present. Below are excerpts from two interviews given by Gary, one month ago and one day ago. Not even executives speak this vaguely or evade questions so blatantly. The irony here is that Gary is the one setting the rules, not the one who has to follow them in fear. You'll notice a significant difference in his language from one interview to the next.
“The field of crypto assets, without prejudging any one of them, many of those tokens are securities under the law of the land, as interpreted by the Supreme Court. You, the investors, are not getting the required or needed disclosures about those assets. This is earnings season, and everyone is asking about it. Where are the disclosures from these crypto tokens? Similar to the seasoned earnings releases?”
Jim Cramer: “Okay, now, Polkadot, Cordana, (LOL) Cosmos, Immutable, Ronin, Bonk, Osmosis, SushiSwap, MyNeighborAlice have all traded millionnnsss—I’m talking about millionnnsss of dollars this very morning. Should we have a SushiSwap ETF, or the proprietary kind? I would think that Bonk is a natural and Osmosis, Gary, these are millions of dollars these things are trading. Shouldn't we have some sort of product?”
I can't believe we've reached the point where Jim Cramer is baiting Gary with questions about a coin called 'MyNeighborAlice' and suggesting a SushiSwap ETF, as if that makes sense. Give me a break.
Gary Gensler: “Let me say something more broadly about the crypto markets. Right now, without prejudging anyone, these tokens, whether the ones Jim listed or other tokens, have not given you the disclosures that you not only need to make your investment decisions but also that are required by law. It’s a basic concept in our securities market. Tomorrow, the SEC is turning 90—happy birthday, SEC. And what President Roosevelt did was create this commission to ensure that you, the investors, get disclosure. In the crypto markets, they aren't giving you that disclosure.”
So, a month ago, the focus was on security tokens; today, it's about disclosures. Make up your mind, Gary. It’s amazing how easily politics turned a good man into an evil one.
I hope this newsletter serves the purpose of showing you how flimsy, misleading, and untrustworthy Gary Gensler's statements about crypto have been and currently are. Day-by-day, his statements carry less and less weight, which is a good thing, but the SEC is still very much a roadblock this industry has to push past.
But rather than end on a frustrating note, let’s pull some positivity from yesterday’s letter and end with this: “But, my friends, we are winning. I want you to take comfort, for we have at our backs the warm winds of American liberty.” — Erik Voorhees
Bitcoin Thoughts And Analysis
NOTHING HAS CHANGE HERE!
Altcoin Charts
For those who are new here, I share SETUPS and not SIGNALS. These are ideas that I am watching - if a certain thing happens, then the trade triggers. I am not telling you what to buy or when. I am showing you how I am watching certain charts and what has to happen for me to take a trade.
Here is an altcoin livestream from yesterday!
Legacy Markets
European stocks reached new record highs, driven by gains in technology shares and anticipation of an interest rate cut from the European Central Bank (ECB). The Stoxx 600 Index rose 0.7%, with the technology subindex up 2.6%, mirroring the performance of US tech giants. Nvidia Corp. advanced nearly 2% in premarket trading, surpassing a $3 trillion market cap, while other US and European tech firms also saw gains.
Investor optimism is bolstered by expectations of monetary policy easing from central banks, with the ECB expected to cut rates by 25 basis points following the Bank of Canada’s rate cut. Bond yields in Europe ticked higher as markets awaited further guidance from ECB President Christine Lagarde.
In the US, the S&P 500 hit another record high, while Treasury yields inched up with markets pricing in two Fed rate cuts in 2024. Economic data showed mixed signals, with slow hiring but robust services sector growth. In Asia, stocks rose, driven by gains in Indian equities and Taiwan Semiconductor Manufacturing Co. Commodities also saw a rally, with oil and industrial metals prices increasing.
Key events this week:
Eurozone retail sales, ECB rate decision, Thursday
US initial jobless claims, trade, Thursday
China trade, forex reserves, Friday
Eurozone GDP, Friday
US unemployment rate, nonfarm payrolls, Friday
Some of the main moves in markets:
Stocks
The Stoxx Europe 600 rose 0.6% as of 10:04 a.m. London time
S&P 500 futures were little changed
Nasdaq 100 futures rose 0.1%
Futures on the Dow Jones Industrial Average were little changed
The MSCI Asia Pacific Index rose 0.8%
The MSCI Emerging Markets Index rose 0.9%
Currencies
The Bloomberg Dollar Spot Index was little changed
The euro was little changed at $1.0878
The Japanese yen was little changed at 156.18 per dollar
The offshore yuan was little changed at 7.2614 per dollar
The British pound was little changed at $1.2789
Cryptocurrencies
Bitcoin fell 0.4% to $70,952.88
Ether fell 0.4% to $3,848.74
Bonds
The yield on 10-year Treasuries advanced three basis points to 4.30%
Germany’s 10-year yield advanced two basis points to 2.53%
Britain’s 10-year yield was little changed at 4.18%
Commodities
Brent crude rose 0.5% to $78.78 a barrel
Spot gold rose 0.4% to $2,363.77 an ounce
Coinbase Introduces The Future Of Wallets
Coinbase has launched a groundbreaking advancement in wallet technology with the introduction of smart wallets, designed to make the transition to onchain participation smoother than ever. These wallets streamline the onboarding process, eliminate network fees, and remove the need for recovery phrases, making onchain engagement as simple as "signing into a website." Over the coming months, existing Coinbase Wallet users will find migration tools within the app to ensure a seamless transition.
With smart wallets, users can effortlessly mint NFTs, trade on decentralized exchanges, and use DeFi apps without worrying about gas fees or cross-app portability issues. Initially supporting eight networks—Base, Ethereum, Optimism, Arbitrum, Polygon, Avalanche, BNB, and Zora—Coinbase plans to expand further in the future. Developers can easily integrate these wallets and benefit from incentives like Base Gas Credits and the Base Buildathon, as Coinbase pulls out all the stops to attract developers.
Attracting 1 billion users is no small feat, but Coinbase is making all the right moves to achieve this ambitious goal.
It’s Larry Fink O’ Clock
History is in the making as a new national securities exchange is announced, coming to the Lone Star State. Backed by Citadel Securities and BlackRock, TXSE Group is spearheading the initiative to launch the Texas Stock Exchange, based in Dallas. With approximately $120 million already raised, the exchange aims to commence operations by 2025.
Reading this news, one might wonder if this is part of Larry Fink's grand plan to integrate crypto and traditional finance through tokenization. Given Fink's persistent discussions about tokenization, it’s certainly a plausible speculation. The question now is where this crossover will take place.
To capture Wall Street's capital, BlackRock understands the need to stay as close as possible to Wall Street, facilitating a smooth inflow of money. In this context, the Texas Stock Exchange would be an ideal candidate. However, there's a significant possibility that the widespread tokenization of assets, as many are hoping for, might not materialize this cycle. While it’s already happening with treasuries, more complex assets like NVIDIA will require much more time.
VanEck Is Very Bullish
VanEck is so bullish, it hurts… in a good way. I am only going to share one spoiler since you made it all the way here. This topic deserves a lot more attention, so that’s what’s coming tomorrow.
The base case for Ethereum: $22,000
The bear case for Ethereum: $360
The bull case for Ethereum: $154,000
If you're looking at this from the perspective of a jealous Solana investor, don’t fret, there is good news for you too. I’ll share it tomorrow ;)
Ethereum Is About To Skyrocket: Get Ready For A Massive Supply Shock
David Duong, the Head of Institutional Research at Coinbase, joins me to explore the latest in crypto. Chris Inks from TexasWestCapital will join us in the second part to share some interesting trades in crypto and beyond.
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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.