SEC against the world🛡️
SEC gets serious in 2023, doubling enforcement actions and fines. Microsoft hits $3 trillion. Coinbase execs bullish. Gold could outshine Bitcoin? Tesla's Bitcoin stash remains untouched.
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The SEC has really stepped up its game in going after crypto firms in 2023.
Number of enforcement actions - 46 in total
Double what they did back in 2021.
A 10 year high.
Led to $281 million in fines and tripled the number of cases they took to court compared to last year.
Last year's actions are over 50% more than in 2022.
Gensler's Influence: Ever since Gary Gensler took the helm at the SEC in 2021, there's been a noticeable uptick in actions against crypto companies. Things ramped up by 50% in 2022 and even more in 2023.
Big Name Battles: The SEC have taken on everyone from Binance and Coinbase to Ripple and Kraken.
Sorting Out Cases: About half of the SEC's crypto cases since 2013 have been wrapped up in court.
It's clear the SEC is zeroing in on crypto. "Regulation by enforcement"? that's Gensler's thing.
What is Gensler saying?
"As I said two weeks ago, that which we did with regard to bitcoin exchange traded products is cabined to this one commodity non-security and shouldn't be read to be anything other than that."
Questioning The SEC
Earlier this week, a federal judge asked SEC why there's no unified regulation in crypto.
This query arose during cases against Coinbase and Binance.
Judge Amy Berman Jackson recently questioned the SEC's approach, asking why there's no regulation covering crypto, and why they're addressing this through litigation on a case-by-case basis.
Judges like Jackson and Katherine Polk Failla are highlighting a gap: neither Congress nor courts have definitively classified certain cryptos as securities or commodities.
SEC's Viewpoint: They've maintained a consistent view since 2017 - most cryptos seem like securities. But the industry begs to differ, leading to numerous lawsuits.
Delayed BlackRock ETH ETF
The SEC has delayed its decision on BlackRock's proposed spot Ethereum exchange-traded fund (ETF) to March.
Why? It needs more time to consider the proposed rule change and the issues raised.
Microsoft's new milestone - a valuation of $3 trillion!
We became the second company (after Apple) to reach this level.
Microsoft's stock went up by 1.7% to $405.63 during trading hours, nudging its market cap over $3 trillion.
What's Driving This?
AI Investments Paying Off: Microsoft's big bucks in AI, especially its $13 billion investment in OpenAI and the ChatGPT craze, are a major factor behind this valuation spike.
Apple vs. Microsoft: It's a close race with Apple for the title of 'world's most valuable company.' Right now, Apple's slightly ahead with a $3.03 trillion valuation.
Despite the success, there's some scrutiny. Regulators in the US, UK, and Europe are eyeing the Microsoft-OpenAI partnership, possibly as a merger.
But Microsoft's no stranger to regulatory challenges, having recently wrapped up its Activision-Blizzard-King acquisition.
Nine spot Bitcoin ETFs bought over 100,000 BTC in the first seven days after their trading launches👇
"crypto can go mainstream."
The Coinbase execs believe that the launch of spot bitcoin ETFs is a pivotal moment for crypto's mainstream adoption.
"I think the most interesting bit that's getting a little bit drowned out by some desire to have headlines is it's the first time crypto can go mainstream" - Tejpaul.
"And in all the years that Greg and I have been here trying to build the institutional business, this is like the very moment we've been waiting for. So, for us, it's the next chapter of this asset class" - Tejpaul.
11 ETFs launched with $20 billion in trading volume.
Eight use Coinbase as a custodian, and big financial names are involved.
Tusar notes the launch went off without issues.
"Despite all of that [operational challenges], I feel like, operationally, this all came off on the first day without a hitch."
He expects this growth to be gradual over months or years, not instant.
TTD Bitcoin 🅱️
Mike McGlone, Bloomberg's senior commodity strategist, thinks gold will outshine Bitcoin this year.
💡Why? Three reasons
Macro Factors: The wider economic scene might not be too kind to Bitcoin despite the positive buzz around ETF approvals and Bitcoin halving.
Fed's Role: McGlone is sceptical about the Fed cutting interest rates significantly. Less easing means less boost for 'risk-on' assets like Bitcoin.
Recession Looming: US recession could hit in 2024, potentially dragging down the stock market. And if stocks go down, Bitcoin might follow suit but even more sharply.
Amidst all this economic uncertainty, McGlone bets on gold and long Treasury bonds to be the safe bets that come out on top.
Arthur Hayes Predicts a Drop
Arthur Hayes, ex-CEO of BitMEX, has made a bleak short-term forecast for Bitcoin (BTC).
Hayes mentions the possibility of Bitcoin forming support between $30,000 to $35,000, considering the potential 30% correction from the ETF approval high of $48,000.
💡What are his reasons?
Global Conflicts and Inflation: The conflict between the US and the Houthis could increase shipping costs = higher inflation.
Federal Reserve Policies: The market anticipates the Federal Reserve to lower interest rates = inflationary pressures.
US Banking Sector Concerns: The expiration of the Bank Term Funding Program (BTFP) might lead to financial instability, as some banks could fail if the program is not renewed.
TTD Tesla 🏎️
Tesla's Bitcoin stash remains untouched in Q4 2023.
Current Value: As of now, Tesla's Bitcoin is valued at around $387 million.
The company made a significant Bitcoin investment of $ 1.5 billion in February 2021. Then, amid the COVID-19 pandemic uncertainties, Tesla sold about 75% of its Bitcoin in Q2 2022 to boost its cash reserves.
Tesla briefly accepted Bitcoin as payment following its initial investment.
Rank: Tesla ranks third in public Bitcoin holdings, trailing behind MicroStrategy and Marathon.
Total BTC: Tesla currently holds over 9,720 BTC, per Bitcoin Treasuries data.
The stock has seen a nearly 16% drop in January.
On January 2, Tesla announced surpassing Wall Street's vehicle delivery predictions for Q4 2023.
The company sold a record 484,507 vehicles in Q4.
TTD Surfer 🏄
Due to changing business conditions, south Korean telecom giant KT Corporation is shutting down its non-fungible token (NFT) platform, MINCL.
Blackberry has warned Mexican cryptocurrency exchanges and banks about a cyberthreat targeting high-net-worth individuals.
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The Token Dispatch is a daily newsletter that takes you on a 4-5 minute drive through the wild west of the Crypto World. Daily in your email inbox @13:00 GMT. Almost always.