Score One For the Degens
The SEC is on the ropes. Turns out the rULe oF LaW so often touted by our grifter elite in power isn't as clear as they might want us to all believe. What a shame...
Wednesday on Heretic Speculator:
I don’t own MARA 0.00%↑ shares but I was a net seller of some of my other BTC mining shares in the Roth this morning. Given the current setups and recent performances of both, I think rotation out of BTC miners and into Gold/Silver miners does make a bit of sense. We’ll see.
Thursday in the market:
All of the Bitcoin miners decided to rally between 10-20% in a single session…. Live look at Faybomb:
Just kidding. I don’t wear neckties. But I do sport a Christopher Meloni-like hairline. Anyway. Certainly there is some justification for this explosion in Bitcoin-adjacent equities, right? Turns out, yes. Yesterday, U.S. District Judge Analisa Torres decided it was time for the SEC to take an “L” in its war against the crypto industry. And a Big L it was…
on Thursday after a U.S. District Court judge ruled that XRP isn't a security in terms of Programmatic Sales, meaning sales to the general public.
This is a big deal because of what it says and because of the precedent that it sets. In her ruling, Torres has essentially determined direct private sales of coins to institutional investors are securities based on the Howey test framework. However, secondary sales to retail investors through programmatic purchases are not securities. So essentially, XRP tokens sold by Ripple Labs to a VC through a private funding round are securities. The XRP tokens that I bought and sold through a DEX are not securities. This is a massive win for the entire crypto industry. And it’s amazing news for Coinbase COIN 0.00%↑ specifically.
This thinking somewhat resembles what was previously proposed by a former (and now notorious) SEC Director, Bill Hinman. Hinman publicly stated Ethereum (ETH-USD) was not a security because it had attained some level of proper decentralization following the coin’s ICO in 2014. Turns out the rules actually weren’t all that clear after all. Whoops.
All of these coins and tokens are what many of us have always claimed them to be; digital assets. Some are currencies. Some are commodities. Some are securities. If it’s not clear to the regulators which ones qualify for which category, perhaps new guidelines are needed after all. To be perfectly clear, I lean anarcho-capitalist here. People can decide for themselves what they want to do with their time and their wealth. Some people like buying Coca Cola. Others like buying PEPE-USD. Do you, anon.
Regardless of how I personally believe society should proceed, I suspect we will see Congress step in and lay down some parameters soon. And then Gary Gensler can go back to MIT and teach a course about all of this and talk about how wonder Prometheum is or something. Whatever.
I want to make one more point on crypto before I get to stocks; I recently made the decision to sunset my BlockChain Reaction research service through Seeking Alpha. There were a variety of factors that led to it but the primary reason was because I couldn’t justify the time spent on it any longer given the return. Growth was slow. I don’t think the regulatory environment has been helpful. But I’m certainly not going to use that as a crutch. The timing of the launch was poor. That’s my fault.
The good news is, life after BCR is going to be a net positive for Heretic Speculator subscribers. I now have far more time to focus on this publication. Managing both services while also publishing for Seeking Alpha’s public site was a challenge. Despite ending BCR, my bullishness on crypto broadly has not wavered. I actually just made a fresh shitcoin altcoin purchase this week. I’m excited to share some of these ideas with you guys going forward. Of course, the good stuff will live behind the paywall. But there will be plenty of nuggets for everyone.
I hope you consider subscribing if you’re even remotely interested in some of these assets. When the CEO of BlackRock BLK 0.00%↑ is talking about tokenization on Fox Business, I think it’s an indication that this industry has a bright future.
Time For Some STONK Thoughts
So far, my broad market short is still underwater. The dollar melting down against other currencies was not something that I expected to happen as quickly as it has over the last week. And the rotation from equities to bonds has not played out… yet.
This week I made two moves in the HSEP, none were sales. At less than 8%, cash is now at the lowest level it has been at since I started this tiny little $1,000 stonk portfolio for the publication.
I have added to the only two positions that I’m now behind on and I feel very good about how this account is positioned.
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