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HEALTH, WEALTH, AND HAPPINESS

July 7, 2022

"I have about concluded that wealth is a state of mind, and that anyone can acquire a wealthy state of mind by thinking rich thoughts."

- Andrew Young

Gary Gensler’s Bitcoin Regulation Grab (Wall Street Journal): A rare op-ed piece from the WSJ that argues investors are being shortchanged by the SEC's current stance on crypto.

The WSJ editorial board starts out the piece by proclaiming "we're agnostic on crypto," which would seem at odds with the regular drumbeat of bad-news stories they run around crypto, but then give a spirited defense of why the SEC should approve spot bitcoin exchange-traded products, otherwise known as ETPs.

The concept behind a bitcoin ETP is simple: you'd be able to buy and sell bitcoin on regular exchanges (like stocks) rather than through specialty crypto exchanges, which often have to create elaborate workarounds to serve U.S. customers.

The SEC says it's concerned about market manipulation, but the Wall Street Journal points out that more than 70 crypto ETPs are now available in Europe, and things seem to be working OK.

The editors even call on members of Congress to come down on the SEC: "Maybe they should call [Gensler] to explain why he’s undermining crypto innovation and investor protections—and remind him who controls the agency’s purse-strings."

Investor takeaway: You know the tide is turning when the Wall Street Journal starts arguing on behalf of crypto investors -- and encouraging Congress to do the same. This is a milestone.

If we ignore the summer period and consider that this market has come from basically zero just a few years ago, this is actually some outstanding rapid growth. Never measure from the top!!

Build a Snowman

What people still fail to realize is that decentralized finance is very much still in the experimental phase and should be treated as a very high-risk market. New business models are being tested in the hopes that a small percentage of them may succeed and go on to change the world of finance forever, but a large majority of these experiments will undoubtedly fail.

In my humble opinion, it was the market's failure to acknowledge this, along with copious money printing from Uncle Sam, that led to the dramatic explosion of Terra Luna and the resulting fallout.

As with any sort of construction, moving fast and breaking things is not always the healthiest attitude. Now that we're in the heart of winter and the easy money speculators have been completely rekt, it's easy to see the quality projects happily building more sustainable models.

Well EnDAOed

If every failure led to their creators declaring the idea dead and simply giving up, we'd never have the lightbulb.

In fact, the very first DAO, simply known as The DAO, ended in a miserable failure that literally split Ethereum in two. I know because I was one of the initial investors. Never mind that the coins I lost and eventually recovered actually represented a massive paper gain despite the project's catastrophic demise.

The invention of bitcoin and decentralized money has inadvertently set in motion the decentralization of many other things as well. Perhaps one day even governments will be run without centralized corruption-prone leadership. So I'd say that people are now learning some very valuable lessons about risk management in a new financial regime. But no. DeFi is definitely not dead. 

Best Regards,

Mati Greenspan,

Analysis, Advisory, Money Management

Bitcoin Market Journal is a daily newsletter that makes you a better crypto investor. It is created by Evamarie Augustine, Charles Bovaird, Mati Greenspan, John Hargrave, and Alexandre Lores.

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