The Senate hearing that took place went incredibly well for cryptocurrencies.
While the news reports about it are mixed, to me, they are looking at things the wrong way.
We need to understand, the Senators nor the regulators were not going to come out and openly embrace Bitcoin nor any other cryptocurrency. They were not going to openly announce that these things are wonderful and that it is their job to do everything in their power to make sure they succeed.
Anyone who thought support was coming from the hacks in Washington is sadly mistaken.
The reason why this was an incredible win was simply because they did not oppose cryptocurrency. From what I can gather, never was the word "ban" mentioned which would have sent prices plummeting. As long as the U.S position is to NOT ban cryptocurrencies, all is well. Even though I do not even believe it remotely possible, the U.S. government could have hindered progress if that is the position it took.
It is true the Chair for the SEC wasn't exactly glowing about cryptos. That is no surprise. It also makes sense that he would focus upon the ICO market and want to call everything a security. After many of the antics pulled in the ICO market, this is the one place we are going to have to live with a great deal of oversight. This made headlines, hence is on the radar of the regulators.
“I believe every ICO I’ve seen is a security… You can call it a coin but if it functions as a security, it is a security…,” Clayton said. “Those who engage in semantic gymnastics or elaborate re-structuring exercises in an effort to avoid having a coin be a security are squarely in the crosshairs of our enforcement provision.”
The Chair of the CFTC was more optimistic which also comes as no surprise. Many believe the futures market is the ultimate "truth" teller since people can both long and short. They feel no price action is true without people being able to short. Then you have a true market.
For Bitcoin, at least, that market exists. Hence I can see the CFTC taking the stance that they are establishing the "true value" for this asset. It also carries the belief that any gaming of the system will be shown here.
“The CFTC can now obtain trading data and analyze it for fraud and manipulation,” Giancarlo said.
“…With Bitcoin futures we’re now having visibility into underlying markets and spot markets that we would not otherwise have.”
What this all means is that, for now, nothing is going to happen. Senator Warner wants more coordination among the regulatory bodies. To me, this means we are going to see a pissing contest for a while which is a good thing. Let the Feds play their games while the industry forges ahead.
Ultimately, there will be more regulation coming. Hopefully, the snail's pace of Washington gives the industry time to grow to the point where it cannot be pushed around. As more money enters this arena, the players get bigger. This means there will be some big entities seeking to get in. Warner, showing who is padding his pockets, mentioned the fact that regulators didn't approve ETF (which would allow institutions to get into crypto) while allows futures to take place.
For full write up about the hearing:
https://techcrunch.com/2018/02/06/virtual-currencies-oversight-hearing-sec-cftc-bitcoin/
In general, I believe the blockchain/cryptocurrency horse is already out of the barn. There is no way for the governments of the world to stop it. However, while still in its infancy, these entities could really hinder progress. For that reason, the fact that the U.S Government, for the moment, decided to stand down, is great news. To me, this was as good as we were going to get.
One other point I want to make: Cryptocurrencies greatest ally is the banksters.
Huh?
Yes you read that properly.
At present, the institutional money (read bankster) is mostly prohibited from the crypto world. While we are in this downturn, the attractiveness of cryptos dwindled. However, when things start to move upward again, which they will, the banksters phones will start ringing off the hook. And do you know what they are missing out on? Trading commissions.
Therefore, I believe the greed of the banksters will be the greatest ally for cryptos. They are going to get into this arena at some point. Senator Warner, who I am sure is paid by the banksters, is already showing their hand. They want in. As the trading action heats up, outfits like Vanguard, T Rowe Price, and TDAmeritrade want their cut.
Blockchain and crypto will eventually destroy most of the banksters. However, that is down the road. Trading commission helps this quarter's numbers which is what Wall Street is most concerned about. Even though they are threatened by it, massive trading fees outweigh any long-term problems. They operate on 90 day cycles to the exclusion of almost everything else.
So relax, take a breath, and watch the crypto world explode once again. In spite of the price action, the blockchain are progressing along at a rapid pace.
