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SEC was the only regulator not willing to meet with Coinbase: Brian Armstrong:

SEC was the only regulator not willing to meet with Coinbase: Brian Armstrong:

Coinbase CEO Brian Armstrong has stated that SEC won’t meet with the firm, while asserting the 50% of Washington officials are concerned over the risks of crypto.

Coinbase CEO Brian Armstrong claims that the U.S. Securities and Exchange Commission (SEC) is the only government branch that is not willing to meet with the firm.

Speaking on Anthony Pompliano’s Best Business Show on Sept. 24, Armstrong said that during his visit to Washington after Coinbase went public in April, the SEC was the “only regulator” that refused to meet with him:

“I reached out to the SEC. I tried to get a meeting with them. They told me that they weren't meeting with any crypto companies.”

“I was kind of surprised by that because there are so many different regulators out there. Every single one has been willing to meet with us and every other branch of government,” he added.

Armstrong highlighted his firm’s issues with the SEC’s approach earlier this month, when he revealed the enforcement body had threatened to sue the firm if it launched a USD coin (USDC) lending program that offered 4% annual yields. Despite other firms already offering similar services, he said the SEC refused to give the green light as they deemed the program to be a security but provided no explanation on how it came to that conclusion.

During the interview with Pomp, the Coinbase CEO noted that the SEC has not changed its tune since then, and said they hadn’t even placed a phone call to the firm. Armstrong asked:

“How are they protecting consumers in this case? I think a lot of consumers demonstrably have wanted to earn higher yields on their savings accounts. They're not really getting those products from the existing financial services.”

“So that was one open question. And then the second one was how are they creating a level playing field?” he added.

Armstrong said Coinbase had considered taking the SEC to court but decided that it was not worth a lengthy legal battle, not least because “there's a lot of deference given to regulators in the court system.”

The firm has now walked back its plans to launch the program, and will instead sit on the sidelines until the regulatory landscape around crypto lending services become more transparent:

“We're going to wait and see what the SEC does in terms of the other products that are out there already in the market where it's not a level playing field today.”

“I think we want to also just focus our efforts on maybe even more important things happening in crypto, like the questions around which of these tokens are securities and how is DeFi going to be used?” he added.

Crypto goes to Washington

On the subject of how policy makers view crypto, Armstrong said there’s a 50/50 split in Washington between people who think it’s risky and people who see the opportunity the sector provides:

“You know, 50% of the people I talked to in DC, roughly, they're still thinking of crypto as a risk. They think this is scary. This is dangerous. They have all kinds of misconceptions in their head about the percentage of activity that's for illicit activity.”

“So that's probably half the people I meet in D.C. and the other half, they realize that this is actually a huge opportunity,” he added.

Armstrong also appeared at TechCrunch Disrupt conference on Sept. 22 and revealed that Coinbase is preparing a draft regulatory framework that it will put forward to U.S. lawmakers next month. The firm is hoping to be an “advisor” that can advocate for “sensible regulation”, with Armstrong noting that regulators have asked the firm multiple times for a crypto proposal.



via cointelgraph.com
Bitcoin Will Truly Drain The Swamp

Bitcoin Will Truly Drain The Swamp

The often-quoted phrase could actually mean something if the incentives behind politics change.

“Same Same, But Different Same”

While Trump recently popularized the “drain the swamp” phrase, his execution and point-of-view were flawed.

Politicians in the United States have been viewed in a negative lens for at least the last few decades. The problem is that our people have become so desensitized to this way of thought that nothing gets done to rectify the situation. Nihilism has been co-opted all the way up to the legislative level.

How common is it in your discussions with family, friends and peers to refer to our political leaders as liars willing to do or say whatever it takes to get your vote? It’s common amongst my peers; I would imagine it’s no different for you. Why is this?

Consider for a moment the incentives for an individual to run for a political office. What are the perks? Well there’s the glaringly obvious: you get to choose what happens with legislation that you deem is required or justified, with some input from your constituents (if you want to consider their points of view). But there are also second-order perks, like the pensions that are guaranteed after completion of their term. Or my personal favorite: voting on policy (like the most recent infrastructure bill) and specifically how The State (referring to the whole of the U.S. federal government) spends and allocates funds acquired by either tax revenue or money printing.

M1 Money Stock

Since 2008 we’ve seen a butt-load of money printing. This is documented here by the Fed as the M1 money supply. The Fed itself explains that the definition of what M1 consists of can be arbitrarily changed. This is all to fund activities ranging from bailing out bankers in 2008 (and then not prosecuting a single individual that was actually responsible) to printing nearly 40% of the circulating supply of dollars ever created in order to fund an economic shutdown in a (futile) attempt to prevent the spread of the virus. This is without taking into consideration the plethora of systemic issues within our infrastructure including, but not limited to: civil rights, public health, healthcare, student loans, Social Security, pensions and then there’s the funding of what many are calling America’s “Forever War” state that we’ve been in since our victory over Nazi Germany (and, really, for the entire life of our country).

It is for these reasons that I propose; politics and government have inextricably become married to the Federal Reserve. The Fed has slowly become the lender of only resort to the U.S. and to support the Petrodollar. And what’s worse is that this bank account can manifest dollars out of thin air with zero effort.

Fix The Incentive Mechanism

Drain the swamp. Via Yves Moret on Unsplash

Trump had the right idea: “drain the swamp.” You have no idea how much it pains me to say this because, as a human being, I find him deplorable. But that shouldn’t prevent anyone from agreeing with the point-of-view of any individual. Unfortunately he didn’t have the foresight or clarity of mind to see one important fact: if we don’t change the incentive structure, it does not matter who we replace the current leadership with.

Furthermore: if we don’t fix the money, today’s problems will simply manifest again in the future.

This problem needs to be faced today. We need a better currency today. No revolution, whether cultural or confrontational, in today’s environment will accomplish anything if we don’t alleviate the incentive problem.

This problem isn’t just within the Federal Reserve, it’s also due to the lobbying relationships in Washington that I touched on in my previous article. This relationship is allowing for external parties to prod, probe and press politicians to affect legislation that can benefit particular entities or industries (maybe for a modest fee or kickback, we can infer).

Our world continues to show how much we need bitcoin the asset and Bitcoin the network.

Our leaders continue to show how much we need a money that is not under their purview.

Furthermore, our leaders and those closest to the money printer continue to show not only their incompetence with regards to money management, but also their stubbornness to admit that the music is slowing down and the number of chairs to claim are growing sparse.

If the United States of America does not make significant moves to: 1.) accept humility and admit that there is a need to learn about this world-changing asset, 2.) take action on the efforts to learn from reputable and knowledgeable members of the Bitcoin community, and, last but not least, 3.) consider that maybe our world could actually be better with a monetary asset and policy that does not fall prey to human greed or fallibility.

It’s not that bitcoin is a fantastic risk-return investment, it’s that Bitcoin is a fundamental necessity.

This is a guest post by Mike Hobart. Opinions expressed are entirely their own and do not necessarily reflect those of BTC, Inc. or Bitcoin Magazine.


via bitcoinmagazine.com
Derivatives data favors Ethereum bulls even with this week's crash below $3K

Derivatives data favors Ethereum bulls even with this week's crash below $3K

Losing the $3,000 mark just days before Friday's $1.55 billion ETH options expiry nearly doomed Ether longs, but derivatives data shows bulls are still in favor.

Ether (ETH) has been in a bearish trend since early September, and this week's Evergrande-led market crash drove the price below $2,700 on Sept.20, its lowest level in 47 days. Curiously, just three weeks ago, Ether was testing the $4,000 psychological barrier, but this changed after mounting crypto regulatory concerns and the fear of China's debt markets triggering a global sell-off intensified.

This week U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler spoke to the Washington Post about renewed plans to regulate the crypto sector and the growing stablecoin market.

Ether's negative price trend reversed on Sept. 22 after U.S. Federal Reserve Chairman Jerome Powell confirmed the continuation of the central bank's monthly bond purchasing program. Powell also made clear that no interest rate hike should be expected in 2021.

Ether price at Bitstamp in USD. Source: TradingView

Even though the current $3,000 level represents a 25% retraction from the recent $4,000 peak, Ether price still reflects a 215% gain in 2021 and the network's adjusted total value locked (TVL) jumped from $13 billion in 2020 to $60 billion, signaling strong adoption despite surging gas fees.

Bitcoin options aggregate open interest for Sept. 24. Source: Bybt.com

As shown above, bulls got caught by surprise because 72% of call (buy) instruments were placed at $3,200 or higher. Consequently, if Ether remains below that price on Friday, only $260 million worth of neutral-to-bullish call options will be activated on the expiry.

A call option is a right to sell Bitcoin at a predetermined price on the set expiry date. Thus, a $3,200 cut option becomes worthless if Ether remains below that price at 8:00 am UTC on Sept. 24.

Bulls still have an advantage in Friday's $1.55 billion expiry

The 1.48 call-to-put ratio represents the difference between the $920 million worth of call (buy) options versus the $620 million put (sell) options. This bird's eye view begs a more detailed analysis because some bets are far-fetched considering the current $3,000 level.

Below are the four most likely scenarios considering the current Ether price. The imbalance favoring either side represents the theoretical profit from the expiry. The data below shows how many contracts will be activated on Friday, depending on the ETH price:

  • Between $2,700 and $2,900: 61,900 calls vs. 72,000 puts. The net result is $27 million favoring the protective put (bear) instruments.
  • Between $2,900 and $3,000: 79,900 calls vs. 52,200 puts. The net result is $80 million favoring the call (bull) options.
  • Between $3,000 and $3,200: 82,500 calls vs. 37,300 puts. The net result is $136 million favoring the call (bull) options.
  • Above $3,200: 99,600 calls vs. 20,200 puts. The net result favors the call options by $255 million.

This raw estimate considers call options being exclusively used in bullish strategies and put options in neutral-to-bearish trades. However, investors typically use more complex strategies that involve different expiry dates. Moreover, there is no way to know if the arbitrage desks are fully hedged.

To win, bears need to keep Ether below $2,900

These two competing forces will show their strength, and the bears will try to minimize the damage. On the other hand, the bulls have decent control over the situation if the Ether price remains above $3,000.

The most important test will be the $2,900 level because bears have significant incentives to suppress the price at this level, even if momentarily. Although there's still room for additional volatility ahead of the expiry, the bulls seem to be better positioned.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.



via cointelgraph.com