The year 2023 began with a set of events that few were expecting. The SEC quickly came out and made crypto enemy number one.
They began by going after banks that were friendly with the cryptocurrency market. Targeting to block the on/off fiat ramps to the crypto market. This was enough to send shockwaves across the crypto market, but it didn’t stop there. The SEC would soon come out with lawsuits against both Kraken, Binance, and Coinbase. President Biden even began talking about how Bitcoin mining energy usage needs to be tasked at a higher rate than regular usage. While there may have been some doubt in the beginning, there was no longer any debate that both the SEC and Biden administration were completely against the cryptocurrency market.
While the cryptocurrency market may dislike the SEC for its recent harsh stance against the industry, if you look from their perspective it does make sense.
After all, last year was one of the darkest years in the history of cryptocurrency. The year of insolvencies and self-inflicted wounds. Ranging from Luna/UST de-pegging, to insolvencies from 3AC, Celsius, BlockFi, Voyager, Vauld, Hodlnaut, and the list goes on. With that said, the one event that sent everything over the edge was the FTX fraud. The reason for this is that they were one of the largest political donors to the democratic party. This meant that a lot of politicians were embarrassed and perhaps even to blame for the FTX situation.
This resulted in them wanting to get revenge against the industry and that is the direct result of all the regulations we have seen against the cryptocurrency industry. Many people have assumed that the SEC is a branch of the government and can do no wrong. In the world of finance, they are a god that doesn’t bleed and cannot be defeated.
That is all coming to an end. Over the last few weeks, we are beginning to learn that the SEC does in fact bleed, and can be defeated.
1. Bitcoin Spot ETF
The first event to send shockwaves across the market was the news of BlackRock applying for a spot Bitcoin ETF. While it hasn’t been approved yet, there is a general consensus that it will be. But there was even more discussion about why a company with the power and reputation of BlackRock would even apply for the ETF. What did they know that the rest of the market couldn’t see? This was the first sign that something monumental was about to happen.
2. SEC Loses to XRP/Ripple
The second monumental blow to the SEC was them losing their case against XRP and Ripple. The court officially declared that XRP is not a security. While I am not a fan of XRP. There is no denying that what the SEC was doing was wrong and would have dire consequences for the entire industry if they won.
This was a clear sign that the SEC doesn’t know what they are doing, and yet another sign that there were holes growing in their armor.
3. SEC Will Likely Lose to Grayscale
Finally, the last event that could prove to be a fatal blow to the SEC and its fight against crypto is the SEC possibly losing their lawsuit against Grayscale. If you’re unaware, Grayscale applied to transform their Bitcoin Trust into a spot Bitcoin ETF but was rejected.
Rumblings around Wall Street are that this lawsuit will be decided in Grayscale’s favor. Perhaps this is the secret that BlackRock was aware of, and motivated them to finally enter the Bitcoin market.
The real thing to pay attention to here is that this isn’t only one event. These are multiple events that are happening very close to each other. The SEC’s armor is getting weaker, and cannot hold the cryptocurrency market back much longer. The end result will be that the legendary Bitcoin spot ETF will be approved. BTC will soar to price levels that we had only dreamed about, and then the entire market will go into a bull market. Going up and above all predictions, making up for the last cycle that was cut short.
How about you? Do you think SEC is losing its control over crypto?
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