Last week, I shared a meme on Instagram that featured an “NPC” being incredibly thankful for the government’s plan to roll out a CBDC. However, the meme also featured a number of ways in which CBDCs could be harmful to their users.
To my utter surprise, this meme was “fact-checked” by the overlords at Instagram. They claimed that the information was “partly false.”
They then linked to an AFP fact-check website that referred to “misleading claims about US digital currency.” I found this quite amusing, given that everything that was in the meme was actually true.
That’s why I decided to do a video that fact-checked the fact-checkers. I took a look at some of the statements in the meme and analysed their veracity. Who knows, maybe someone from the AFP will watch the video and learn a thing or two.
You can watch that video here.
📊 My Personal Portfolio 📊
ETH 37.48% | BTC 34.12% | SOL 7.84% | ATOM 6.53% | USDC 5.62% | DOT 2.33% | MATIC 1.81% | ADA 1.21% | RUNE 1.20% | NEAR 1.03% | INJ 0.84%
📈US Midterms: The Macro 📈
A few weeks back, I was listening to an episode of Blockworks Macro and the guest made a very good point. It’s no longer enough for investors to keep track of the supply and demand dynamics of an economy, or the effects of a country’s monetary or fiscal policy. Investors must also keep track of developments in politics and geopolitics. This is why investors are watching the upcoming midterm elections in the United States so closely.
In case you missed the memo, those midterms are in about 48 hours, and they’re expected to be the most contentious yet. That’s because voters and politicians from both political parties are convinced that the other side will basically cheat, be it through voter suppression or social media censorship. As such, it’s almost guaranteed that half of the population will be angry, regardless of the outcome. Billionaire Bill Gates is convinced that this will result in a civil war.
Naturally, this has led to lots of uncertainty in the markets. This is because it’s unclear how the US population will react to any particular outcome, and because it’s unclear how much of an effect the outcome will have on the US government’s policies going forward.
Right now, polls suggest Republicans are on track to win both the Senate and the House. This would give them the power to pass whatever policies they want (for the most part). However, history has shown that these polls aren’t always that accurate.
Even so, it’s clear that the average American is very unhappy with the status quo. So, let’s assume we do see the ‘red wave’ the Republicans have been raving about. If you’ve watched any of our videos about the crypto hearings in Congress, you’ll know that Republican politicians seem to be significantly more pro-crypto than Democrat politicians (on average). This means that a Republican victory could be very bullish for crypto. I’ll explain why in detail a little later.
Now, the catch is that a Republican majority is likely to result in a change to America’s energy policy, which could have very negative effects in the short term. If you’ve been keeping up with the channel, you’ll know the current administration has been emptying the country’s Strategic Petroleum Reserve or SPR into the domestic and global economy to keep inflation low. It’s believed that one of the first things Republicans will do is stop emptying the SPR and start refilling it. This could lead to a spike in oil prices and inflation by extension.
In the long term though, a Republican majority will likely lead to an increase in oil and gas production in the United States. As far as I understand, it takes around 1-2 years to bring a new oil or gas operation online once reserves have been identified – much less if the infrastructure has already been sitting idle. This means that energy-driven inflation could finally start to come down in 2024 or 2025, especially if other countries start expediting their own domestic energy production. This is certainly what investors are expecting.
Another significant macro factor a Republican majority could affect is the ongoing war in Ukraine. Some polls suggest that most Americans want the United States to stop sending so much aid to the war-torn country. This is especially true of Republican voters, and many Republican politicians have already come out to say that they will immediately cease funding the war effort if they win. Given that Ukraine owes a great deal of its success to the support of the United States, this could mean Russia starts to regain the ground it has lost.
The silver lining to such an outcome is that it would increase the likelihood of a resolution to the conflict, which would in turn resolve much of the uncertainty and inflationary pressures plaguing the world.
Whether such a resolution is right is up for debate, but as winter approaches, Europe starts to freeze and more populist leaders are elected, Ukraine could soon find itself with a lot less support from Western powers. I dare not imagine what Russia would do in that scenario.
🇺🇸 US Midterms: The Crypto 🇺🇸
The momentum seems to be in the Republicans’ favour. I can’t say I’m surprised, considering it’s a trend we’ve seen happen for quite some time. But I don’t enjoy counting my chickens before they hatch, so take that with a pinch of salt. For all we know, the Democrats might actually beat the midterm curse.
Well, what do the midterm elections mean for crypto?
Quite a lot, as it happens.
A recent survey by Grayscale and The Harris Poll found that as much as 38% of potential voters said they would consider positions on crypto policy when voting in the midterms.
Here are some more interesting numbers from the survey:
- 60% of Americans believe the economy is on the wrong track
- 4 out of 5 Americans want clearer regulation of the crypto industry.
- 1 in 5 registered voters own crypto
- 52% of all Americans believe crypto is the future of finance
Since crypto is generally a bipartisan issue, it’s not surprising that candidates’ policies toward it might swing some votes. Speaking of policies and regulations, we’ve seen congress introduce quite a number of bills relating to crypto, blockchain and CBDC policy over this market cycle. The efforts behind most of them seem to have stalled, unfortunately. However, depending on how the midterms turn out, we might see the 118th Congress pick up some of these bills and help settle the arguments over them.
The first of which (I predict) would be the Lummis-Gillibrand bill, a landmark piece of crypto legislation that seeks to overhaul the industry’s relationship with regulators completely. Notably, it plans to clarify the division of crypto oversight between the SEC and the CFTC while granting the CFTC a larger hold over the asset class. It also covers taxes, custody, stablecoins and other key pressing points of the debate surrounding crypto. You need to keep an eye on this.
Some of the key candidates, aka crypto allies, that I hope are a part of the 118th Congress are Minnesota Congressional District 6’s incumbent Tom Emmer (R), incumbent Oregon Senate seat holder Ron Wyden (D), Ohio Senate seat candidates Tim Ryan (D) and J.D. Vance (R) and finally Ohio’s Congressional District 8 candidate Warren Davidson (R).
Emmer and Davidson, in particular, have been vocal pro-crypto advocates. Emmer has expressed discontent with the SEC’s regulation-by-enforcement approach. He even sent a letter which posed a series of questions to Treasury Secretary Janet Yellen, when the Treasury imposed sanctions on the crypto-mixer protocol Tornado Cash. Davidson, aka the “Crypto Congressman,” has been advocating for crypto since 2016 and is known for keeping track of developments in the space.
Wyden is a well-known advocate for the digital ecosystem as a whole and has been fighting for internet freedom since the 1990s. Recently, he was part of the group that filed a crypto-friendly amendment to 2021’s controversial bipartisan infrastructure bill.
Ohio Senate seat candidates and rivals Tim Ryan and J.D. Vance are both pro-crypto. Ryan is part of the group responsible for introducing the “Keep Innovation in America Act”, which provides the crypto industry with the necessary legislative leeway to keep growing in the United States. Vance, on the other hand, was previously backed by Bitcoin evangelist Peter Thiel and also holds between $100,000 and $250,000 worth of Bitcoin.
Speaking of crypto candidates, a recent CoinDesk article found that over $80 million in campaign donations have come from the crypto industry for this election cycle. We’ve even seen software solutions recently emerge that make this process easier. However, another report by Bloomberg noted that the volume of donations from the crypto industry has been decreasing as we get closer to the Nov 8 election date. The report notes that this is likely due to the general decline in the crypto market and token prices this year.
There is a lot riding in the long-term on the results of this election. I’ll be keeping my eyes peeled, and so should you.
🥊 Coming Soon: The SEC vs. Polkadot 🥊
Let me start by saying that neither Polkadot nor the SEC has officially announced that the DOT coin is facing scrutiny. That said, the Web3 Foundation’s statement that DOT is no longer a security is arguably proof that some eyeballing of DOT has been taking place.
The fact that the Web3 Foundation has been speaking with the SEC for 3 years could be additional evidence. The caveat there is that many crypto projects have tried working proactively with the SEC about their coins or tokens, most notably Stacks with its STX coin.
Funnily enough, Stacks also made the declaration that STX is not a security not long ago. STX subsequently listed on Coinbase, even though it seems the SEC never confirmed that STX was no longer a security. This is concerning, but it sheds some light on how crypto projects are handling their encounters with the SEC. It’s safe to say that making an official statement to the crypto community that a coin or token is not a security is a rallying cry, and it’s not the kind that’s made when going on the offensive.
But back to Polkadot. In case you haven’t noticed, I still hold DOT as part of my crypto portfolio. This is because I think Polkadot has serious long term potential, just like all the other coins and tokens I hold. I’ve been watching Polkadot very closely over the last couple of years as a result, and if you’ve been keeping up with my updates, you’d have seen the SEC’s scrutiny coming from a mile away. The giveaway was when founder Gavin Wood went MIA in early 2021. When he came back all he could talk about was crypto regulation.
The recent news that Gavin had stepped down as CEO of Parity Technologies also raised an eyebrow for me. I know that Gavin had been working hard on decentralising Polkadot as much as possible, presumably in response to the regulatory concerns he seemed to have when he reappeared last summer. It’s probably worth mentioning that SEC chairman Gary Gensler was sworn in last spring. It’s possible that one of the first things he did in relation to crypto was go after Polkadot, hence Gavin’s absence in the following months.
Speculation aside, it’s clear that the SEC’s criteria for what counts as a security in cryptocurrency are excessive. If you watched our video about the SEC’s insider trading case against that Coinbase employee, you’ll know that the regulator is extremely sensitive to anything that would suggest an expectation of profit from the team or company behind the crypto project. Like many crypto projects, Polkadot was built by a single company (Parity Technologies) and is overseen by a non-profit (the Web3 Foundation).
I suspect this popular set-up is meant to be regulatory-compliant in the United States, and that’s because it’s logically impossible to have an expectation of profit from a non-profit company. However, there can still be an expectation of profit from the company behind the crypto project, as well as the founders.
I reckon this is why the SEC apparently takes issue with any crypto projects where the company or founders received a significant share of the initial coin or token supply. This seems to be one of the reasons why it went after Ripple.
If I’m correct, then it means that Polkadot’s DOT could potentially be in the SEC’s crosshairs. It also means every other major crypto project with this kind of company + non-profit set-up is also facing scrutiny. At the same time though, it means that crypto projects with only a foundation and no company could be safe.
This includes Ethereum’s ETH, which has the Ethereum Foundation as the only primary entity behind it. Some would say that Consensys is an Ethereum company, but it’s one of many (hence why ETH is ‘sufficiently decentralised’).
The next few weeks will certainly be interesting…
🔥 Deal of The Week 🔥
If you hold a significant amount of crypto, then keeping it safe should be at the forefront of your mind. One of the best ways to do this is with a hardware wallet.
As you know, I am a fan of both Trezor & Ledger – but it would be great if there was another option.
Well, one of the new kids on the block is Ngrave. Their devices have been built with three core principles in mind:
1) Never compromising on security
2) Easy-to-use products for everyone
3) Protecting crypto users end-to-end. From private key generation to recovery keys.
We’ve been playing around with the Ngrave hardware wallet at Coin Bureau HQ and we share our thoughts in a dedicated Ngrave review.
👉 Want to upgrade your crypto security? Get an Ngrave & enjoy an exclusive 10% discount – just use the code COINBUREAU
🔮 Video Pipeline 🔮
- Demographic Decline: Elon’s Warning to us all!
- China’s Scramble For Africa
- Social media censorship: what you need to know!
- Saudi Arabia’s futuristic city: this is crazy!
- FED press conference analysis: how it could impact you
🏆 What’s New At CoinBureau.com This Week? 🏆
✅ Bisq Review 2022: The MOST Decentralized Exchange?
✅ FTX US vs Kraken Review 2022: Top Exchanges for Crypto Trading Compared!
That’s all for now. The whole Coin Bureau Team would like to thank you for your continuing support. If it wasn’t for you, then we wouldn’t be able to continue pursuing our passion of creating the best crypto content we can 🙏
Guy your crypto guy