📌 MUST READS

Last week, on the back of the Fed pausing interest rate hikes, we asked you, our readers, for your prediction on where BTC would be priced by year’s end.

Well, hundreds of you have spoken and the results are quite hopeful. 👇

Turns out not only do most of you think BTC will be $30k or higher by year end, but absolutely NONE of you think it will be below $15k.

Wisdom of the crowds? We hope so. But let’s play Devil’s Advocate for a second.

While we’ve been pounding the table on all the positive momentum occurring in crypto, including game changing accounting rules, major funds raising huge amounts of capital, and crypto scoring major wins against the SEC, we need to be intellectually honest and take a look at the risks.

Let’s start with the elephant in the room: Binance. According to a recent writeup from the WSJ, Binance is teetering on the edge of failure. The Journal pointed to the fact that the world’s largest crypto exchange (in just the last three months) has lost more than a dozen senior executives, laid off 1,500 employees, and seen revenues fall more than 70%.

To be fair, every exchange has run into difficulties in the past year on the back of reduced trading volumes, but Binance is also being sued by the SEC for operating an illegal exchange and mishandling user funds and is facing billions of dollars in fines.

There’s no other way to put it, a collapse of Binance would be FTX level catastrophic.

And that’s just in crypto.

On the other hand, we also got a drifting bond market, roughly $1.75 trillion of outstanding student loans accruing interest again, credit card & auto loan balances at all time highs, and the American debt load skyrocketing. And we don’t even have to get started on the corrupt and inept leadership in government.

While these fiat/macroeconomic factors might seem like they would bode well for crypto, so far that simply hasn’t been the case. In reality, it seems like crypto prices have simply followed money flows… and consumer spending is drifting away in the face of higher-for-longer interest rates.

Remember, in 2020, both equities and BTC fell in tandem as the Fed began raising rates. Right now it looks like the two assets are pretty correlated. So if there is a black swan event, crypto may just surprise you.

Now, we have no doubt in the future of BTC or crypto over the long run. But don’t be surprised if ineptitude, corruption, or targeted attacks don’t hurt prices in the short run.

So while most of you don’t think that the price of BTC will drop below $25,000 this year, you need to ask yourself, what if it does?

Will you hold on tight, or sell with fear? Let us know.

🏛️ REGULATORY FRONT

Not to sound like a broken record, but the US continues to push off an approval of a spot bitcoin ETF.

Over the past several months, funds have been scrambling to apply, hoping to be the first to approval and win the crown.

But, like clockwork, SEC Chair Gary Gensler continues to reject and/or delay all applications. This approach has left many investors, including ourselves, in a state of perplexity, frustration, and resentment.

In relatively good news, however, it now seems like Congress shares the same sentiment.

Just yesterday, a bipartisan group of lawmakers comprising of Mike Flood (R-Neb), Tom Emmer (R-Minn), Ritchie Torres (D-NY), and Wiley Nickel (D-NC), penned a letter to Gensler calling for an "immediate" approval of the listings.

The lawmakers pointedly conveyed to Gensler that there was “no reason to continue to deny” spot crypto ETF applications following the Grayscale court decision. From there, they made a case that a regulated spot bitcoin ETF would amplify investor safeguards by offering more transparent and secure avenues to access bitcoin.

So, to sum it up, the pressure is on… but the letter was probably the least of Gensler’s worries this week.

Today’s Hearing
In related news, Sir Gensler headed over to the Capitol today to testify before the House Financial Services Committee where he got absolutely grilled on his bullying tactics and lack of regulatory clarity.

To up the ante, 40+ crypto founders are in DC this week as well to talk with Congress about the outrageous overreach of the SEC and the need for common sense crypto legislation.

Here were the highlights from the hearing:

For the record, today’s hearing was another case of the Great American Musical, where politicians act like they’re on Broadway and say harsh things to gain recognition, clicks, and so forth. In other words, despite all the “warnings” and “threats” to Gensler, these hearings, unfortunately, don’t hold much weight.

However, when considered alongside yesterday’s letter, a pattern is emerging: Support for Gensler within Congressional ranks is drastically waning.

TWEET OF THE WEEK

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