What will regulation realistically do to the bid for crypto in the U.S.? Does its legality become a selling point or is regulation a wet blanket thrown over the asset class?
It could very well be that the banks of the first world could put up road blocks to spare themselves from the threat if crypto by keeping their customers locked in their respective fiat; and such blocks would likely slow the adoption of crypto. But there are plenty of people in the planet who still desire access to systems of payments that are mutually beneficial and accepted. Bans would more likely result in a balkanization of payment systems over time.
I think the government is about one thing, control. Control of the currency manipulation and control of your money, taxation. They will try to crush what they don't or can't control.
Crypto regulation will kill off most of what we think of as crypto today and unleash a new financial system. The speculative crap needs to go away first.
Assume crypto products are securities. Why bother with NYSE/Nasdaq et al as we know them today and all the complexities that exist in the current market system? List your "stock" (or bond for that matter) on a decentralized, blockchain-based exchange. IPOs - put your shares out there and as people first buy them, funds go into the corporate wallet. Settlement is instantaneous. Dividends and interest payments go straight into your wallet. Fractional shares - standard. Voting via smart contracts. But none of this can happen while Elon Musk and Dogecoin rule the roost.
As a german, I can totally see Germany and probably the EU baning it. Two points:
A: crypto lobby is weak and broad anti-tax-avoidance sentiment in the EU. whether cryptos are actually used to avoid taxes is irrelevant because people will easily believe it is.
B: very strong connection of established banks with the regulators. when they see crypto as a new revenue source it could be fine. once they see that the revenue will go elsewhere, regulations will be brutal. Again, anything financial has a very weak lobby here.
I think regulation equates to a shift in the function of bitcoin as an asset, similar to the way bonds and penny stocks have changed function throughout their existence. Instead of being the hip new outsider asset, limited regulation would legitimize the function of global transactions sans banks, but remove the cool/subversive factor that currently attracts a fair amount of bitcoin holders. A number of them would get out of that market and move on to the next hot thing, as they are motivated by operating at the cutting edge (or fringe). Bitcoin itself however would move into a more legitimate security role that traditional investors with traditional strategies will buy into. This is all assuming the regulation does not impact the functionality of bitcoin as a currency. So long as that is maintained, BTC will be legitimized and demand for it will exist
Hey Chris, China has completely different motives for everything, not just crypto. Total surveillance state. As for the US, Bitcoin is a commodity, property, as defined by the IRS. Reasonable regulation is fine. Let's face it, crypto has more scrutiny than any other asset. You have 4x inverse ETF's for example in others. I am OK with rational regs.
My 2 cents, regulation is coming and like everything else, it will be built to be taken advantage of with loopholes the smartest among us will exploit. Regulation is good bc it will be a matter of time for a work around to manifest.
In a free market, regulation is bad for everything. But in our rugged economy, regulation open crypto up for a $2 trillion government bailout when the bubble bursts.
Seems to me that, unlike a security, Bitcoin, which can be transferred to a private storage device or across the planet, is unlike a share of stock. I suppose you could request individual stock certificates from your broker but that would be more cumbersome to transport both domestically or internationally, and, once you have them, to whom would you sell? Especially, were your goal to move assets to a different jurisdiction.
Bitcoins agility combined with its universal liquidity are the strongest points in its favor over other non-dollar correlated, non-performance risk assets.
Bigger threats than government regulation, it would seem to me, would be lack of access to due to hacking, or some event which eliminated access to electricity or destroyed digital information; and I know this seems extreme, but think EMP attack. Which means that if one were ever to consider “off-grid” BC, aside from a cold storage wallet like a Ledger, probably good to invest in a Faraday Bag as well.
Preposterous as it might appear upon initial consideration, so did the possibility of a low intensity biological attack just a couple of years ago. Yet now this type of black swan event would probably appear more realistic, whether one believes it’s already occurred or not.
There will not be enough crypto to go around. You can not buy all the gold in the world with the amount of crypto in the world today. Not mentioning all the silver and rare earth metals. Unless you resort to creating more crypto thru investment credit notes. That makes it the same as all the fiat currencies in use today. If nations can not regulate and tax it and banks can not skim off the top of it, it will not be allowed to exist. They are doing everything in their power to stop the use of legal fiat currencies in the form of "cash transactions", to gain control of all transactions.
Are we sure the CCP is as anti-crypto as they’re presenting? China wouldn’t let citizens buy gold for decades but saw the light with the backdrop of a failing world reserve currency. We now think they potentially have 10x the gold they say they do. The transparency of blockchain data could be useful to a surveillance state. Just have to make sure you’re not bidding against a billion people while you build a position first. I say this admitting I’m far from an expert on China or geopolitics.
I don't think they can get rid of Bitcoin - they can't crash it - there are too many well connected whales behind the scenes to let that happen.
El Salvador has made BTC legal tender. Ukraine just announced a roadmap to make BTC legal tender. Other small countries will follow suit - which means that UHNW will set up accounts there and there will be BTC havens all over.
Even if the big boys like USA, CHI, EU try to ban bitcoin, they can't put the genie back in the bottle.
QUESTION: Would regulation of crypto as a security in the U.S. stand to legitimize or throw a wet blanket over crypto? What would it realistically do to the bid, given that treating cryptos like a security both acknowledges how big they have gotten while it also works to cut out illegitimate uses?
ANSWER: You cannot regulate cryptocurrency. You can regulate third-party exchanges that operate on US soil. You can even block ISPs from allowing people to access exchanges that are NOT based on US Soil.
But you cannot do jack fucking shit about people using it.
First of all -- Bitcoin itself does not need any third parties in order for you to store it, transfer it, or exchange it.
So let's say -- for example -- the SEC says "Bitcoin illegal! And all US exchanges are illegal! And everybody buying or selling Bitcoin will go to jail! And all stablecoins are banned!" and blah blah blah.
Okay...so what?
I can buy Bitcoin, exchange Bitcoin, and transfer Bitcoin 100% anonymously. I can use any number of FREE apps that encrypt my data, wash my coins, and make my Bitcoin purchases and transfers untraceable.
I can use a VPN to circumvent any ISP blocks and I can simply use services that are not based in the United States and that do not require me to identify myself to anyone if I want to buy or sell on an actual third party exchange.
I can trade it peer-to-peer if I want as well.
What else is illegal that literally nobody has had any luck enforcing when it comes to the Internet?
What about pirating movies and songs? That's illegal -- but literally everybody does it.
I never paid for a single season of Game of Thrones for as long as it ran. I didn't know ANYBODY who actually had a subscription to HBO and we all watched the show.
Yet none of us ended up in jail!
Why is that?
Because the law is simply unenforceable.
If I want to buy something from somebody in Crypto I can do it anonymously and just have them send me the item.
Even if I can't "technically" buy things IN crypto because it's "illegal" I can simply exchange my crypto for the accepted currency anonymously.
This whole argument of "will they or won't they!" is so hilarious to me.
They'll try everything they can -- but what's happening is an entire new monetary system is evolving before their eyes and they are realizing they are completely obsolete.
THERE IS NOTHING THEY CAN DO!
Their power is gone and their control is gone.
This isn't gold and silver that you can confiscate from people. This is a monetary system that you'd have to shut down the ENTIRE world's Internet in order to stop.
It's a money that can be carried around in people's BRAINS -- rather than their pockets.
The cat is out of the bag.
It's incredibly hard for me to understand why this isn't obvious to you -- being such a smart person (whom I respect).
What the ever loving shit do any of these "regulators' expect to do about it?
People want good money -- and at the end of the day, people are going to choose good money over bad money.
It is obvious what is good money.
QUESTION: Do you think the U.S. and other powerful countries could follow in China’s footsteps?
ANSWER: First of all -- who gives a shit?
I expect every Government to become desperate and try to hold onto the monetary system as long (and as violently) as they possible can.
But the game is already over and it's already won. There's nothing they can do and the Nation-State is already dead.
This is the first new monetary system and money developed in thousands of years and it is 100% congruent with the evolution of our information system (the Internet).
They are the old world and they are obsolete. No Government is needed for contract enforcement or legitimizing, arbitration, regulation of a central entity in finance.
We are entering a decentralized world that is 100% programmable.
They will get desperate then they will die and starve.
It will cause a lot of pain -- a lot of people will die (as history shows us) and a lot of people will be trampled under the temper tantrum that these evil Governements (as all Governments are evil) throw.
If you have the means to do so -- GET OUT of your country and go somewhere relatively benign where these power plays aren't happening.
If you can't -- lay low and put as much money as you can into Bitcoin and keep it safe until this blows over.
When the dust settles -- the only people who retained their wealth will be the ones who stored it in Bitcoin.
And, to a certain extent gold and silver if they manage not to get it confiscated.
QUESTION: Do you think the U.S. and other powerful countries realize that by stepping out of the crypto atmosphere, China is removing exposure to a potential crash in the space?
This argument doesn't even make sense.
Your reasoning here is quite frankly -- absurd.
The adoption of Bitcoin outpaces Internet and mobile phone adoption.
You'd have to completely destroy that demand overnight in order to "crash the crypto" space.
It doesn't make any sense.
As far as other cryptocurrencies or "tokens" in the defi space -- most of them belong to great projects that serve amazing utilities.
For example, Filecoin -- which is a blockchain-based global decentralized file storage system.
People store files by acting as a node on the network (thus making it more distributed and secure) and are rewarded in Filecoin for doing that (thus the incentive).
When you buy Filecoin you aren't buying a "competing cryptocurrency" to Bitcoin -- you're buying essentially shares in a project.
You are witnessing the Tokenization of the world.
EVERYTHING that can be tokenized WILL be tokenized.
And you seem not to understand this.
The old days of "the stock market" and companies going public with an IPO on a centralized third-party exchange and so on is DEAD.
Brother -- you need to wrap your head around what's happening or you're going to be left in the dust.
If you TRULY believe that suddenly -- over night -- the demand for Bitcoin and crypto assets -- the most convenient and secure form of Good Money and tradable assets ever devised --is going to just...drop all around the world and cause a "crash" then it's hard for me to take you seriously at this point.
But I assume that you simply don't understand how to look at simple On-Chain metrics.
Realize: Bitcoin is the most transparent monetary network that has ever existed in history.
You can go see the real demand of Bitcoin RIGHT now. It can't be manipulated. No Wall Street institution can engage in dark pools or block trades to hide their activity.
Anyone buying, selling, and holding on the Bitcoin network can be seen -- 100% transparently -- right now FOR FREE.
And all the sheer data shows adoption growing steadily.
And we all know the supply -- the supply is finite and cannot be changed.
So if we KNOW the demand and we KNOW the supply -- we know the outcome.
Demand would either have to drop over night all around the world (which is highly unlikely) or demand would have to slowly begin tapering off leading to a crash.
In the case of tapering off -- everyone would be able to easily see this happening on the network.
But the exact opposite is happening.
You need to look more into this because your arguments for a "crypto crash" don't make any sense.
You keep saying it -- but you aren't explaining how a crash like that even actually comes about.
Kill. Sovereigns don’t like competition for the issuance of “money.” BTC is heralded as the embodiment of libertarian “hard” money, yet is - itself - a fiat currency, created out of the ether by Satoshi. Which is the bigger trend, Bitcoin or ESG? I will bet on the latter. Tax avoidance? You bet, yet IRS is catching-up with prominent Yes/No question on 1040. “Know Your Customer?” Yep, kind of a big deal yet crypto specifically helps evade this regulatory dragnet, hence has been used for the rash of malware extortion efforts. Hard limit of 21M bitcoins, with an unknown # already lost to hard drives inadvertently tossed into the landfill, is unworkable - see “American Default” by Sebastian Edwards or George Gilder’s Chapter from “Life After Google” called “The Bitcoin Flaw.” So many reasons why crypto will eventually Peter out, but the mania is exhausting.
It could very well be that the banks of the first world could put up road blocks to spare themselves from the threat if crypto by keeping their customers locked in their respective fiat; and such blocks would likely slow the adoption of crypto. But there are plenty of people in the planet who still desire access to systems of payments that are mutually beneficial and accepted. Bans would more likely result in a balkanization of payment systems over time.
I think the government is about one thing, control. Control of the currency manipulation and control of your money, taxation. They will try to crush what they don't or can't control.
Crypto regulation will kill off most of what we think of as crypto today and unleash a new financial system. The speculative crap needs to go away first.
Assume crypto products are securities. Why bother with NYSE/Nasdaq et al as we know them today and all the complexities that exist in the current market system? List your "stock" (or bond for that matter) on a decentralized, blockchain-based exchange. IPOs - put your shares out there and as people first buy them, funds go into the corporate wallet. Settlement is instantaneous. Dividends and interest payments go straight into your wallet. Fractional shares - standard. Voting via smart contracts. But none of this can happen while Elon Musk and Dogecoin rule the roost.
As a german, I can totally see Germany and probably the EU baning it. Two points:
A: crypto lobby is weak and broad anti-tax-avoidance sentiment in the EU. whether cryptos are actually used to avoid taxes is irrelevant because people will easily believe it is.
B: very strong connection of established banks with the regulators. when they see crypto as a new revenue source it could be fine. once they see that the revenue will go elsewhere, regulations will be brutal. Again, anything financial has a very weak lobby here.
I think regulation equates to a shift in the function of bitcoin as an asset, similar to the way bonds and penny stocks have changed function throughout their existence. Instead of being the hip new outsider asset, limited regulation would legitimize the function of global transactions sans banks, but remove the cool/subversive factor that currently attracts a fair amount of bitcoin holders. A number of them would get out of that market and move on to the next hot thing, as they are motivated by operating at the cutting edge (or fringe). Bitcoin itself however would move into a more legitimate security role that traditional investors with traditional strategies will buy into. This is all assuming the regulation does not impact the functionality of bitcoin as a currency. So long as that is maintained, BTC will be legitimized and demand for it will exist
Hey Chris, China has completely different motives for everything, not just crypto. Total surveillance state. As for the US, Bitcoin is a commodity, property, as defined by the IRS. Reasonable regulation is fine. Let's face it, crypto has more scrutiny than any other asset. You have 4x inverse ETF's for example in others. I am OK with rational regs.
My 2 cents, regulation is coming and like everything else, it will be built to be taken advantage of with loopholes the smartest among us will exploit. Regulation is good bc it will be a matter of time for a work around to manifest.
In a free market, regulation is bad for everything. But in our rugged economy, regulation open crypto up for a $2 trillion government bailout when the bubble bursts.
Seems to me that, unlike a security, Bitcoin, which can be transferred to a private storage device or across the planet, is unlike a share of stock. I suppose you could request individual stock certificates from your broker but that would be more cumbersome to transport both domestically or internationally, and, once you have them, to whom would you sell? Especially, were your goal to move assets to a different jurisdiction.
Bitcoins agility combined with its universal liquidity are the strongest points in its favor over other non-dollar correlated, non-performance risk assets.
Bigger threats than government regulation, it would seem to me, would be lack of access to due to hacking, or some event which eliminated access to electricity or destroyed digital information; and I know this seems extreme, but think EMP attack. Which means that if one were ever to consider “off-grid” BC, aside from a cold storage wallet like a Ledger, probably good to invest in a Faraday Bag as well.
Preposterous as it might appear upon initial consideration, so did the possibility of a low intensity biological attack just a couple of years ago. Yet now this type of black swan event would probably appear more realistic, whether one believes it’s already occurred or not.
My read…
There will not be enough crypto to go around. You can not buy all the gold in the world with the amount of crypto in the world today. Not mentioning all the silver and rare earth metals. Unless you resort to creating more crypto thru investment credit notes. That makes it the same as all the fiat currencies in use today. If nations can not regulate and tax it and banks can not skim off the top of it, it will not be allowed to exist. They are doing everything in their power to stop the use of legal fiat currencies in the form of "cash transactions", to gain control of all transactions.
Are we sure the CCP is as anti-crypto as they’re presenting? China wouldn’t let citizens buy gold for decades but saw the light with the backdrop of a failing world reserve currency. We now think they potentially have 10x the gold they say they do. The transparency of blockchain data could be useful to a surveillance state. Just have to make sure you’re not bidding against a billion people while you build a position first. I say this admitting I’m far from an expert on China or geopolitics.
I don't think they can get rid of Bitcoin - they can't crash it - there are too many well connected whales behind the scenes to let that happen.
El Salvador has made BTC legal tender. Ukraine just announced a roadmap to make BTC legal tender. Other small countries will follow suit - which means that UHNW will set up accounts there and there will be BTC havens all over.
Even if the big boys like USA, CHI, EU try to ban bitcoin, they can't put the genie back in the bottle.
Anybody else find Gensler's face deeply disturbing? Are we just going to step right over that?
QUESTION: Would regulation of crypto as a security in the U.S. stand to legitimize or throw a wet blanket over crypto? What would it realistically do to the bid, given that treating cryptos like a security both acknowledges how big they have gotten while it also works to cut out illegitimate uses?
ANSWER: You cannot regulate cryptocurrency. You can regulate third-party exchanges that operate on US soil. You can even block ISPs from allowing people to access exchanges that are NOT based on US Soil.
But you cannot do jack fucking shit about people using it.
First of all -- Bitcoin itself does not need any third parties in order for you to store it, transfer it, or exchange it.
So let's say -- for example -- the SEC says "Bitcoin illegal! And all US exchanges are illegal! And everybody buying or selling Bitcoin will go to jail! And all stablecoins are banned!" and blah blah blah.
Okay...so what?
I can buy Bitcoin, exchange Bitcoin, and transfer Bitcoin 100% anonymously. I can use any number of FREE apps that encrypt my data, wash my coins, and make my Bitcoin purchases and transfers untraceable.
I can use a VPN to circumvent any ISP blocks and I can simply use services that are not based in the United States and that do not require me to identify myself to anyone if I want to buy or sell on an actual third party exchange.
I can trade it peer-to-peer if I want as well.
What else is illegal that literally nobody has had any luck enforcing when it comes to the Internet?
What about pirating movies and songs? That's illegal -- but literally everybody does it.
I never paid for a single season of Game of Thrones for as long as it ran. I didn't know ANYBODY who actually had a subscription to HBO and we all watched the show.
Yet none of us ended up in jail!
Why is that?
Because the law is simply unenforceable.
If I want to buy something from somebody in Crypto I can do it anonymously and just have them send me the item.
Even if I can't "technically" buy things IN crypto because it's "illegal" I can simply exchange my crypto for the accepted currency anonymously.
This whole argument of "will they or won't they!" is so hilarious to me.
They'll try everything they can -- but what's happening is an entire new monetary system is evolving before their eyes and they are realizing they are completely obsolete.
THERE IS NOTHING THEY CAN DO!
Their power is gone and their control is gone.
This isn't gold and silver that you can confiscate from people. This is a monetary system that you'd have to shut down the ENTIRE world's Internet in order to stop.
It's a money that can be carried around in people's BRAINS -- rather than their pockets.
The cat is out of the bag.
It's incredibly hard for me to understand why this isn't obvious to you -- being such a smart person (whom I respect).
What the ever loving shit do any of these "regulators' expect to do about it?
People want good money -- and at the end of the day, people are going to choose good money over bad money.
It is obvious what is good money.
QUESTION: Do you think the U.S. and other powerful countries could follow in China’s footsteps?
ANSWER: First of all -- who gives a shit?
I expect every Government to become desperate and try to hold onto the monetary system as long (and as violently) as they possible can.
But the game is already over and it's already won. There's nothing they can do and the Nation-State is already dead.
This is the first new monetary system and money developed in thousands of years and it is 100% congruent with the evolution of our information system (the Internet).
They are the old world and they are obsolete. No Government is needed for contract enforcement or legitimizing, arbitration, regulation of a central entity in finance.
We are entering a decentralized world that is 100% programmable.
They will get desperate then they will die and starve.
It will cause a lot of pain -- a lot of people will die (as history shows us) and a lot of people will be trampled under the temper tantrum that these evil Governements (as all Governments are evil) throw.
If you have the means to do so -- GET OUT of your country and go somewhere relatively benign where these power plays aren't happening.
If you can't -- lay low and put as much money as you can into Bitcoin and keep it safe until this blows over.
When the dust settles -- the only people who retained their wealth will be the ones who stored it in Bitcoin.
And, to a certain extent gold and silver if they manage not to get it confiscated.
QUESTION: Do you think the U.S. and other powerful countries realize that by stepping out of the crypto atmosphere, China is removing exposure to a potential crash in the space?
This argument doesn't even make sense.
Your reasoning here is quite frankly -- absurd.
The adoption of Bitcoin outpaces Internet and mobile phone adoption.
You'd have to completely destroy that demand overnight in order to "crash the crypto" space.
It doesn't make any sense.
As far as other cryptocurrencies or "tokens" in the defi space -- most of them belong to great projects that serve amazing utilities.
For example, Filecoin -- which is a blockchain-based global decentralized file storage system.
People store files by acting as a node on the network (thus making it more distributed and secure) and are rewarded in Filecoin for doing that (thus the incentive).
When you buy Filecoin you aren't buying a "competing cryptocurrency" to Bitcoin -- you're buying essentially shares in a project.
You are witnessing the Tokenization of the world.
EVERYTHING that can be tokenized WILL be tokenized.
And you seem not to understand this.
The old days of "the stock market" and companies going public with an IPO on a centralized third-party exchange and so on is DEAD.
Brother -- you need to wrap your head around what's happening or you're going to be left in the dust.
If you TRULY believe that suddenly -- over night -- the demand for Bitcoin and crypto assets -- the most convenient and secure form of Good Money and tradable assets ever devised --is going to just...drop all around the world and cause a "crash" then it's hard for me to take you seriously at this point.
But I assume that you simply don't understand how to look at simple On-Chain metrics.
Realize: Bitcoin is the most transparent monetary network that has ever existed in history.
You can go see the real demand of Bitcoin RIGHT now. It can't be manipulated. No Wall Street institution can engage in dark pools or block trades to hide their activity.
Anyone buying, selling, and holding on the Bitcoin network can be seen -- 100% transparently -- right now FOR FREE.
And all the sheer data shows adoption growing steadily.
And we all know the supply -- the supply is finite and cannot be changed.
So if we KNOW the demand and we KNOW the supply -- we know the outcome.
Demand would either have to drop over night all around the world (which is highly unlikely) or demand would have to slowly begin tapering off leading to a crash.
In the case of tapering off -- everyone would be able to easily see this happening on the network.
But the exact opposite is happening.
You need to look more into this because your arguments for a "crypto crash" don't make any sense.
You keep saying it -- but you aren't explaining how a crash like that even actually comes about.
Kill. Sovereigns don’t like competition for the issuance of “money.” BTC is heralded as the embodiment of libertarian “hard” money, yet is - itself - a fiat currency, created out of the ether by Satoshi. Which is the bigger trend, Bitcoin or ESG? I will bet on the latter. Tax avoidance? You bet, yet IRS is catching-up with prominent Yes/No question on 1040. “Know Your Customer?” Yep, kind of a big deal yet crypto specifically helps evade this regulatory dragnet, hence has been used for the rash of malware extortion efforts. Hard limit of 21M bitcoins, with an unknown # already lost to hard drives inadvertently tossed into the landfill, is unworkable - see “American Default” by Sebastian Edwards or George Gilder’s Chapter from “Life After Google” called “The Bitcoin Flaw.” So many reasons why crypto will eventually Peter out, but the mania is exhausting.
You want Wall Street to have crypto etf”s? Regulations, pensions exposure? Regulations, crypto mutual funds? Ahh you get my drift...