"It's Entirely Political"

From a younger candidate to an obvious pivot from the managerial underbosses, there has been a clear change over the last week. No amount of pandering can undo this damage.

It probably goes without saying, but the changes in the world of politics over the last several days have been monumental. No, I’m not going to get too into the news of President Biden withdrawing his candidacy for reelection. All I’ll say is this is the least shocking campaign-related development since the debate last month. I know what Biden had been saying publicly and how his camp was positioning up until late last week, but c’mon… we had to see this coming. Heretics certainly did…

Who Will Replace President Biden?

This is not to diminish that there are still some really interesting questions pertaining to how this all played out behind the scenes or to let the self-proclaimed ‘saviors of democracy’ off the hook for seemingly pushing a tired, old man beyond the primaries to take the party nominee out of voters’ hands. But I’ll simply leave those critiques to the writers and thinkers who do it better than I do.

To prove I’m not just picking on the team with the blue shirts, here’s the red shirt team going full Idiocracy last week:

So… exit tired, old man and enter younger woman:

Source: Election Betting Odds

We’re right back where we were before the debate; the remnants of a deeply unpopular administration losing badly in the prediction markets to 45 with less than 4 months remaining before the election. Today, we’re going to explore some of the crypto-related angles to the coming election. Yes, sh!tcoins are playing a role in why Trump is polling better than expected with young voters.

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The Big Pivot

I have made my feelings about the current administration’s stance on digital asset regulation no mystery. Emboldened by the criminal actions of a conman who simply utilized new financial infrastructure to do things that were already against the law, the United States Securities and Exchange Commission decided to shoot the baby in the bath.

'Goldman Gary' Must Go

It’s rare to find something where seemingly the entire political spectrum of those within a community appear to be in agreement on the inadequacy of a self-anointed King; but Gensler has pulled it off. - Ya boi

If Kim Cheatle’s performance yesterday was eye-opening for you, check out some of Gary Gensler’s lowlights over the last several years:

One could conceivably argue the native asset of the Ethereum (ETH-USD) blockchain is a security. Just as someone else could conceivably argue ETH is a commodity or a currency. Each classification would garner a different set of regulatory oversight. Those in the industry have been lamenting for several years the lack of clarity regarding how many of these assets should be categorized.

It got so bad, Gensler’s SEC even went the dubious route of attempting to argue that a stablecoin is a security. Total nonsense. Pure and simple. Beneath the pretense of “consumer protection,” the underlying issue has always been the same. It’s the technology that the establishment finds so problematic rather than the assets themselves. There’s no clearer indication of that than the conclusion of Ritchie Torres’ masterful five minutes last September:

Gensler said he’d leave it to the “very fine attorneys at the SEC in front of courts.”

Well, be careful what you wish for, Gary.

• The SEC lost to Grayscale in court.

• The SEC lost on key elements to Ripple in court.

Time after time, the agency has regulated by enforcement, acted in an arbitrary and capricious manner, failed to answer basic questions in front of congress, acted in poor faith, beat dead horses, and attacked the good actors in the industry.

And it has backfired badly.

Why? Turns out crypto is quite the voting block. And the Biden/Harris administration is desperate to get some of those voters back.

“It is a completely unprecedented situation, which means it's entirely political.” - Source, The Block

Even after spot Bitcoin (BTC-USD) ETFs were approved by the SEC essentially via court order, it did not look like the spot Ethereum ETFs were going to be approved anytime soon.

Prior to this week, it had seemed like the SEC was not going to approve the Ethereum ETFs. This was based on the lack of engagement between the SEC and issuers. However, that changed earlier this week when the SEC suddenly started talking to issuers, asking for 19b-4 forms to be turned around and sent back in. - Tim Copeland & Sarah Wynn, The Block

And now seemingly out of nowhere, the ETFs are here.

Some sources speculate that the SEC's change of heart could be politically motivated as elections are approaching quickly. Former President Donald Trump has appeared to be pro-crypto over the past month. - Sarah Wynn, The Block

It would be very easy to point to Trump’s reported presence at a Bitcoin conference in Nashville and his high praise for crypto recently as a similar brand of pandering to what Democratic candidates may embark on between now and November. But the reality is Trump’s team has been using crypto since 2022…

The Unintentional Brilliance Of Trump Trading Cards

Now here’s the not so secret little secret… Bitcoin, Ethereum, and seemingly all blockchain-based assets are politically driven. It’s just not a left/right paradigm. It’s an authoritarian vs freedom paradigm. This is why the these things are championed by Democrats like Ritchie Torres, Republicans like Tom Emmer, and independents as well. In the land of the control freak, the permissionless network might as well be a bomb.

Thus, crypto is and always has been political as an instrument for personal freedom. How one chooses to express that freedom is entirely up to the individual.

It Is Whatever You Want It To Be

I’ve been working with this theory that Bitcoin is essentially just an idea. So far BTC is the most popular expression of that idea. Is it currency? Only if you have enough of it and can pay the toll. Others say it’s digital gold. Meh, PAXG is digital gold. Ben Hunt calls it “art.” Maybe. There’s actually art stored on the Bitcoin block space after all. With the emergence of Ordinals, one could perhaps argue Bitcoin is also a decentralized storage network.

The point is, we’re 15 years into the existence of this network and I don’t think we’re close to a definitive consensus on what Bitcoin actually is. Maybe where we can agree is here; Bitcoin is a globally distributed ledger system that can’t be tampered with by state regimes or individual actors. This system has a native unit of account that doesn’t require collateral backing. - Ya boi

How does one express the idea of Bitcoin? Long BTC? Long alts? Long everything? Or is it just long ideas? Maybe it’s all the above. Here’s an idea that has been quite a bit of fun lately…

Zcash Is Not Dead?

I don’t think I’ve written a full Zcash ($ZEC-USD) post since early January. Probably not a real shocker here, I’m still a big proponent of this network and I am rooting for it to succeed bigly. Quietly, ZEC is actually having a very good month:

After exploding over 100% in less than 3 weeks, ZEC is now outperforming privacy coin competitors Monero ($XMR-USD) and Dash ($DASH-USD) year to date. Technically, we may have to back-test some MAs, but I’m liking the action in price:

I’m also liking the action in the fundamentals:

Shielded ZEC has surged over the last few weeks. This certainly may not last. But with the changing attitude in the political realm, it’s definitely nice to see one of the more principled projects in the entire ecosystem catching a bid.

🤫

Don’t tell anyone…

Disclaimer: I’m not an investment advisor. I’m long BTC, ETH, ZEC, and a variety of other digital assets that will probably go to zero.