11th December 2024 > > Strategic reserves, quantum computers, & authoritarianism.

tl;dr

More US states are about to get in on the BTC action, as is Russia it seems. Quantum computers may be a threat, but not in the way you might think. Operation Choke Point 2.0 is being put to the sword, but won’t give up without one last fight.

Market Snap

Market Wrap

In the last twenty-four hours we have round-tripped from $97.5k to $94.5k and back to $97.5k triggered by quantum computer fears (see below) and in the process initially killing a lot of leveraged longs, and then back up again to kill the leveraged shorts. Some people will never learn.

Alts took a real kicking, and have not yet recovered with some notable exceptions such as RAY which is the native token for the largest DEX facilitating the trading of Solana meme coins. Volatility is picking up, which will give investors many opportunities to sell into strength and buy from other’s weakness.

Curious Cryptos’ Commentary – US Strategic Reserve of BTC

On the 18th November 2024, the CCC reported on Pennsylvania’s Strategic Bitcoin Reserve Act (https://www.curiouscryptos.com/post/17th-november-2024-btc-adoption-where-ever-you-look) which might result in an allocation of 10% of the state’s treasury coffers into BTC. Go Penny!

Florida’s state pension fund is already in the process of assessing BTC as an investment (https://www.curiouscryptos.com/post/30th-october-2024-so-close-to-a-new-ath) but the pace has cranked up somewhat. The laudable aim is to get involved in Q1 2025, with discussions taking place about using the state’s treasury funds too. Go Florida!

Michigan and Wisconsin pension funds are already invested to the tune of $11mm and $220mm respectively.

We are now potentially just weeks away from a major announcement about a strategic reserve of BTC for the US government. If we do, expect many more states to follow in the footsteps of the trailblazers above.

…

h/t Milk Road.

This morning, I read that Russia has announced that it is investigating creating a strategic BTC reserve:

As this concept of a strategic BTC reserve gains in credence and popularity, then first mover advantage becomes paramount, for obvious reasons. Once the cash rich Gulf states get involved, the demand from sovereigns will likely overwhelm the markets.

Curious Cryptos’ Commentary – Quantum computers

The news that Google has made great strides in the development of quantum computers is very good news. Quantum computers can potentially be used to solve all sorts of problems that are currently intractable.

But I see that there is a fear that they are a risk to the decentralised world, offering the potential to crack the strongest of our current encryption science.

And that may be true, but it is a trivial concern if so.

If a malicious actor can crack cryptos’ encryption, then that actor can drain every bank account of all its fiat, it can transfer out every security from every custodian globally, it can change the operating system of nuclear reactors to replicate the incompetence of Chernobyl, it can wipe the database of every health system in the world, it can turn off GPS, it can reroute internet traffic to where it should not go, it can turn off the lights, it can down every plane that finds itself in the air at the time of attack, and every weapon system is just a freebie to cause mayhem, death, and destruction.

And you are worried about maintaining the immutability of the blockchain?

Curious Cryptos’ Commentary – Operation Choke Point 2.0

And you thought that Operation Choke Point 2.0 was now consigned to the dustbin of history? Well, it's close to that, but this illiberal and illegal mindset amongst some lawmakers is making one last attempt to cling on.

The outgoing administration had previously proposed to re-appoint SEC Commissioner Caroline Crenshaw, who is a Gensler ally and a low-ranking lieutenant in Warren’s anti-freedom and anti-liberty army. Crenshaw dissented in the vote to approve spot BTC ETFs making this claim:

"Among the reasons that crypto markets – including bitcoin spot markets – appear to be Petri dishes of fraudulent conduct is because there is little to no systemic oversight of these markets."

If that were true – which it isn’t – that would be all the more reason to support spot BTC ETFs. Crenshaw’s reasoning is blinded by her innate support for authoritarianism. If you are not convinced, then once you learn that Better Markets is a supporter of hers, you will no longer have any doubt as to her total lack of suitability to be employed in any role associated with financial markets.

Today a vote will be taken on her future as an SEC commissioner or not. Let us hope liberty and freedom win the day, but I suspect they won’t.