🔔 Coining the future of crypto

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Right, a different format today, focusing on one topic only...

What does the Coinbase IPO (that isn't an IPO even though people keep calling it an IPO) mean for the future of crypto?

For now, Cathie's loading up the ARKs 🚢

Exactly as you'd expect - it's innovative, disruptive and all of those things that Cathie loves...

But I wanted to dig deeper - starting with these headlines...

If it wasn't 'mainstream' already, it definitely is now...

Switzerland’s largest insurer AXA starts accepting Bitcoin as payment: All private AXA customers now have the option to pay insurance premiums for any non-life insurance products in Bitcoin

Now, I'm not calling a top in crypto/Bitcoin or anything like that - but it is time to review the narrative...

It's definitely moving, so we can probably rule out the subsidies...

Tax is reasonably clear - capital gains tax applies in most cases, exactly the same as any other asset (although plenty of grey areas remain...)

Which brings us to regulation...

Where would we be without a WEF blockchain expert?

Luckily the SEC have appointed just the guy for the job...

At his confirmation hearing, Gensler said he believes in Blockchain technology but stressed that the SEC must to be vigilant to protect investors in cryptocurrencies -  “it’s important to ensure that these markets are free of fraud and manipulation,”

Although he seemed far more concerned by the 'gamification' of trading apps and payment for order flow (no names 😐)

Full article 👇

Fair to say he's not your average regulator...

Worth reading up (and keeping an eye) on Gensler, and to a lesser extent Brainard who may become Fed Chair in February 2022 when Powell's term expires...

To be clear, banning crypto is not an option - that will only make it worse...

Regulation is coming: at some point but the timing is less clear...

Contrary to popular cryptopinions I don't think the Coinbase listing marks the top, in my view we are just getting started...

I tend to believe that central banks and governments will leave crypto alone for as long as possible...

Let everyone else do the creative work, innovate, make the mistakes, fix the flaws...

And then launch CBDC's to implement deeply negative rates like the evil supervillains they wish they were....

Yeah, I know it sounds a bit Alex Jones, but when they're literally publishing it on the ECB website you have to pay attention and at least consider the possibility...

OK, back to regulating... Government regulators tend to act ONLY when it is truly necessary...

Defining necessary is tricky but let's have a crack anyway...

Governments are not actively looking to take down Bitcoin so we need to find the triggers... What would make them take action?

• National security: e.g. 'it's a Chinese financial weapon' (Thiel), it's being used by Iran/Russia to get round U.S. sanctions etc.

• Tax Evasion: Ironically may come because the big guys send lobbyists to complain that they're being taxed while little guys are finding ways around it

• Market Crash: Simple - too many people lose too much money

• Green/ESG: We've all seen the 'energy of a small country' headlines - although it's a pretty flimsy justification for regulating Bitcoin directly

Relevant Thread 👇

As the market matures, the 'risk' of regulation increases alongside it... but don't expect regulators to step in while everyone's making money...

Nope - the day of reckoning will come when something triggers mass hysteria...

Remember, people don't want to be protected from risks, but they definitely want protection from the consequences...

Nothing happened in 2018 - why would it now?

2018 Bitcoin existed on the edge of the financial system, whereas 2021 Bitcoin is on company balance sheets...

The crypto marketcap is over $2 trillion

Another Bitcoin crash would see HUGE headline numbers, XXX billions wiped off the value of... etc.

Rubbernecking crowds will gather at the scene, trying to get a glimpse of the carnage...

dramatic pause

'SOMETHING MUST BE DONE'

Our hero arrives on the scene...

"Fear not fellow citizens, 'The Regulator' is here to protect you"

"Never again will people suffer this terrible fate"

Citizens:

And then what...?

Satoshi's vision & the sovereign libertarian story would need to be replaced...

Once Bitcoin comes under regulatory 'control', what happens to the value narratives that surround it?

Surely Bitcoin is too established to just disappear...

So what would it become...?

The digital gold that all 0ther cryptos are benchmarked against?

Or the myspace left behind by crypto innovation?