Monday Markets Wrap-up: New U.S. SEC head and Its Global Crypto Implications

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Good morning. Today, apart from last week’s most important news, we bring you some information about the incoming chairman of the U.S. Securities and Exchange Commission. Why does it matter? Read on.

Welcome to Monday Markets Wrap-up, part of our new series: BitPinas Daily. We will look back at all the major news and updates that happened this week. Crypto is global, but sometimes news that matters happens while we sleep. So we bring to you what’s happening in our space here and abroad. We highlight three to four important news of the past week and list down the rest. 

Market Price as of January 18, 2021:

Bitcoin$35,745.06-1.41%
Ethereum$1,229.38-0.43%
Tether$0.98-1.01%
Polkadot$16.94-7.33%
XRP$0.277046-1.13%
SLP$0.012-0.0%


Bitcoin closed January 17, 2021, at $35,745.06 per BTC. We’re down 6.8% in the last 7 days and up 23% since the year began. This is 14% below the previous all-time high of $41,940, which was hit on Jan. 8, 2021.

Bitcoin’s market capitalization stands today at $664,348,651,666 which is 65.27% of the entire cryptocurrency market. The entire crypto market, by the way, now has a market cap of $1,021,718,245,214 (-0.2%).

On the table above, there’s the cryptocurrency SLP. If you wonder what that is, check out this article: Playing Axie Infinity vs Minimum Basic Salary in the Philippines.

U.S. SEC

A blockchain expert might be the new U.S SEC head

A new U.S. administration, a new U.S. SEC chairman. A report from Reuters says MIT professor Gary Gensler will chair the powerful commission left vacated by Jay Clayton (who by the way left with a parting gift — a charge against Ripple).

Wall Street, according to Reuters, would be concerned by Gensler’s appointment. As the former chair of the Commodity Futures Trading Commission (CFTC), he had the reputation of advocating tougher regulation.

The Defiant looked at Professor Gensler’s faculty profile at MIT, and it is certain that he’s someone very knowledgeable about blockchain and digital currencies. His research and teachings center on blockchain technology, digital currencies, financial technology, and public policy. He even teaches an online course on cryptocurrency. 

Bloomberg noted that previous talks and editorials of Gensler suggests he’s an advocate for a more nationwide way to register and monitor cryptocurrency exchanges, instead of leaving this oversight to the states. In a 2018 interview, Gensler said cryptocurrencies like Bitcoin needs to be “protected” if we really think it’s going to be part of our future. “That means we need to guard against illicit activity. And yes, we need to protect investors. The crypto exchanges, big exchanges like Coinbase, need to come within the SEC or the CFTC,” he said.

Whether Gensler’s appointment is good for the industry or not is anyone’s guess for now.

You might say that this is just a U.S. thing. But we should remember that our local securities laws are heavily patterned afterU.S. securities laws. So any re-interpretation over there could have some effects here. 

About Face

Goldman Sachs to enter crypto market ‘soon’ via custody play: source

A source inside Goldman Sachs has told Ian Allison of Coindesk that it will soon explore digital asset custody and that this plan would be “evident soon.”

The source said this is part of Goldman’s underlying strategy citing the recent missives from the U.S. Office of the Comptroller of the Currency (more of this below). Goldman, apparently, is talking to JPMorgan, Goldman, and Citi regarding crypto custody.

Why not crypto prime brokerage? The Goldman source said it’s because Anchorage, BitGo, and Coinbase already have big plans in that space so they are not looking to duplicate those.

This is significant, considering that in May 2020, just after the Bitcoin halving, Goldman’s analysts said cryptocurrencies are not an asset class, saying “We believe that a security whose appreciation is primarily dependent on whether someone else is willing to pay a higher price for it is not a suitable investment for our clients.”

At that time, Bitcoin was around $10,000. The dominant cryptocurrency almost reached $42,000 last week.

Opinions change.

Cities and Bitcoin

Miami mayor wants to put some of the city’s treasury reserves into bitcoin

“If I would have done it last year, I would have made 200% plus return. So I would have looked like a genius,” Miami mayor Francis Suarez told Fox Business.

Mayor Suarez said Miami is creating a regulatory framework to make it the easiest place in the U.S. to do crypto business.

The mayor also thinks bitcoin’s price is only going into one direction. “It’s only going up,” he said, while acknowledging that it is volatile.

Andre’s Rant

Yearn Finance founder continued his rant about why building in DeFi sucks. According to him:

  • “Your value is only as good as your token, token go up? You built an amazing protocol, it’s the future of finance, blah blah. Token goes down? You are a scammer, fake project, bad coder, blah blah,”
  • “Your success belongs to your “community”, but your failure is 100% your own. Token goes up in value? No one is going to be giving profits to you or thanking you for their profits. Some exploit occurs? You are 100% to blame and need to refund or figure out ways to make them whole again. You have 0% of the reward, 100% of the risk.”
  • “When I decided to distribute YFI 100% it was because I believed it would allow me to exit to the community. However, I am still blamed if the price goes down, I am still constantly plagued by “when next release”, “when update”, etc messages. I still have all the responsibility and expectation, except I have 0 of the reward or upside. Don’t do this, I was an idiot.”

Check Andre’s post here.

Owen Fernau from The Defiant wrote about other DeFi founders sympathizing with Andre and or offering possible solutions or alternatives.

  • Kain Warwick, Synthetix: “You are always going to have pressure from stakeholders. It’s important to filter it though. And one of the best ways is establishing good community norms early.”
  • Stani Kulechov, Aave on funding alternatives: “DeFi community should look more into DAICOs, a model that Vitalik Buterin proposed where the governance goes directly to the community without unfair advantage where whales are receiving free tokens.”

By the way, there’s a proposal to mint 1000 more YFI tokens. The current max supply of YFI is 30,000 tokens. This new proposal and the ensuing community discussion appears to be the motivation for the “rant”

DeFi

OCC Chief on DeFi: Get ready for self-driving banks

In an op-ed for The Financial Times, Brian Brooks, the acting (and outgoing) chief of the U.S. Office of the Comptroller of the Currency (OCC), the country’s currency regulator, has warm words about how DeFi could change how banks work in the future, attributing to its greater efficiency.

Comparing it to self-driving cars, Brooks said DeFi is paving the way for self driving banks (Banks without bankers). Still, he doesn’t think there are regulations currently in place that can be interpreted to work for DeFi. After all, bank regulation is more about regulating bankers actually. 

Here are some of his thoughts:

  • Federal regulators could ensure fair treatment of customers by self-driving banks. 
  • Regulators could properly examine a bank that exists only as software. (“It may be easier than supervising banks today,” he said.)
  • Regulators could ensure self-driving banks properly serve their communities. (“Their greater efficiency would free significant amounts of capital that is lost to operating costs today or slowed by decisions dependent on human grey matter.”)

But can self-driving banks — banks without officers and directors — become banks under current regulations? Brook’s said not yet. Bank charters, for now, can only be issued to human beings. “But those antiquated rules should be revisited just as regulations that still mandate the use of fax machines should be,” he concluded. 

Bitcoin Core

New improvements and changes to the Bitcoin Core

Not headlines grabbing, but Colin Harper of Coindesk detailed out some of the improvements to the Bitcoin Network in his latest article. 

First, Taproot, which will allow for more complex smart contracts, is now fully live on Bitcoin’s signet, a sandbox for testing before they get pushed to the mainnet.

Users can also now set manual fees denominated in satoshis. “Before, Bitcoin Core relied on a fee estimator for transactions, and these fees were set by specifying a bitcoin amount (say, 0.00001 BTC) instead of satoshis (1000 sats),” Harper explained.

Other changes or improvements include:

  • Support for privacy browser Tor’s V3 address
  • New block-filtering system for “light clients” — wallets that do not keep a full history of Bitcoin’s transaction ledger, only those that are needed.
  • Signet – the new testing network

Read more here.

#CryptoPH

Colin Goltra’s Year in Review

“Overall, I think I am just more excited about the home grown PH crypto scene really coming into its own this cycle and having a much more collaborative tone than in prior bull market years.  It’s a great community and I think it can do a great job spreading the word about crypto throughout the Philippines.” 

Check out Colin’s Year in Review here.

Spotlight on KooKoo

KooKoo, who provided his expertise in our “How to Trade SLP/AXS to PHP” article, is one of the most popular Axie YouTubers and one of the leaders in Yield Guild Games  who has helped onboard many new players to Axie Infinity and to the “Play to Earn” ecosystem. KooKoo’s interview, now live on Axie Infinity’s “The Lunacian” talks about his life story, why education is important and the true benefit of play-to-earn. 

“It’s time for players to get rewarded by playing blockchain games that they can have ownership and enjoy the benefits of blockchain technology. Turning gamers into investors.” 

YGG x NFT

To commemorate reaching 1000 members on the Yield Guild Games Discord server, did a free NFT giveaway. The YGG Founders’ Coin is a limited edition NFT meant to reward the earliest backers of our guild.

What else is happening

Bitcoin

  • The planets can predict the price of Bitcoin according to this astrologer
  • Bitcoin miners saw 33% revenue increase in December
  • Famed value investor Bill Miller says bitcoin becomes less risky the higher the price goes
  • ‘Bitcoin is Amazon’ in early 2000s, says former Trump advisor
  • Hold your horses! $9K Bitcoin price drop not a trend change, data says
  • Top 100 Bitcoin addresses accumulated $11B more BTC in the past 30 days

Ethereum

  • Exchanges are running out of ETH
  • Institutions are coming to Ether – but for real this time
  • Ethereum feels cheap during a bull run – Tyler Winklevoss
  • Beyond the Beacon Chain: what’s next for Eth2?

DeFi

  • Maker’s daily transfers hit all-time high as price surges by 50%
  • Sushiswap reveals ambitious 2021 roadmap
  • $300M Whale spotted in DeFi’s turbulent seas

Corporate

  • Eye-popping projection for $3T crypto market underpins Bakkt deal
  • MicroStrategy plans to get more corporations buying Bitcoin
  • Mark Cuban is more into crypto than he’s previously let on
  • Coinbase implied IPO valuation is now $75 billion
  • EToro warns users it’s running out of crypto to trade due to ‘unprecedented demand’
  • 8 public companies with the biggest Bitcoin portfolios
  • Ledger owners report chilling threats after 20K more records leaked

Institutions

  • Profit taking? Institutional crypto fund inflows drop 97% in three weeks
  • Grayscale to dissolve XRP Trust due to U.S. SEC’s Ripple lawsuit
  • Institutions buy while Bitcoin dipped this weekend

Regulation

  • Bitcoin must be regulated globally, says European Central Bank President
  • Japan’s top securities regulator says XRP is not a security 
  • OCC to unveil bank charter for crypto financial services
  • (U.S.) Anchorage becomes the first federally-chartered Bitcoin bank

This article is published on BitPinas: Monday Markets Wrap-up: New U.S. SEC head and Its Global Crypto Implications

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A business ad graduate from the Pamantasan ng Lungsod ng Maynila, Mike is the website manager of Bitpinas.com. He is responsible for almost every content you see on the site, from topic/news selection to editing of articles. Mike believes correct information about blockchain and cryptocurrency can empower people to make accurate decisions about the industry, which, in turn, should deter bad actors from taking advantage of crypto & blockchain. [Telegram @mikemislos]