21st December 2023 > > Warren (boo!) & the EU (hurrah!).

tl;dr

I might not like it, but cryptos are becoming a political dividing line. To the surprise of some, and delight to the rest of us, the EU reinforces its mantle as the global leader in fighting for liberty and freedom.

Market Snap

Market Wrap

Open interest and perpetual futures funding rates continue to climb in response to a report by Fox News that the “SEC is holding ‘rare’ conference call today with ALL spot Bitcoin ETF applicants” followed by reports in response to this meeting that all applicants have been told to remove references to “in-kind redemptions” replace them with “Cash creates only”. If that doesn’t make sense to you, it’s a technical issue that means that the ETFs will be less efficient in tracking BTC and increase transaction costs for investors. Well done the SEC.

In the round this is good news and confirms that spot BTC ETFs are very close now. But that approval will not be today.

Make no mistake, this funding rate is way out of whack. The natural volatility of cryptos raises a strong possibility that a small sell-off will lead to a cascade of liquidations. A sub-40k price would not be a surprise in the next few days. If you are long BTC on a leveraged basis, be more careful than usual.

Curious Cryptos’ Commentary – Warrens’ anti-crypto army

It is unfortunate that in the US support for, and antagonism towards, cryptos is split along party pollical lines, as graphically demonstrated below when looking at the key members and supporters of Warren’s anti-crypto army:

This illiberal bias amongst much of the Democratic Party is very sad to behold. It is a dereliction of its original aims and purposes.

On the upside, US citizens have a ballot box choice as to whether to support liberalism or not if that is an issue of concern to you. Here in the UK – with the notable exceptions of Natalie Elphicke and Lisa Cameron – most of our lawmakers show at best antipathy towards cryptos, or at worst downright disdain of cryptos. I guess this is because our MPs reflect a public mood that survey after survey suggests that most people were not only happy with lockdown, but want it reintroduced, not in response to a pandemic, but because they liked being paid to sit at home and not work. This is Sunak’s legacy, and future historians will not look kindly on him.

The good fight for freedom and liberty is never over.

Curious Cryptos’ Commentary – The EU’s pro-crypto army

First up is COIN (Coinbase) the world’s leading centralised cryptocurrency exchange which – though listed in the US – has made no secret of its plans to embrace the EU in the wake of the EU’s world-beating crypto regulations, namely MiCA.

COIN has received approval as a VASP (Virtual Asset Service Provider) from the spiritual home of bureaucracy, France, allowing it to offer a "full suite of retail, institutional, and ecosystem products and services" in the country.

Stablecoin issuer Circle has received conditional registration from the French regulator as a DASP (Digital Asset Service Provider). Circle’s chief strategy office, Dante Disparte, explains with a gallic shrug and a Gitane hanging from his lower lip:

"The selection of France as our European regulatory base builds on the country's clear rules for responsible innovation in FinTech and digital assets, while leveraging France's dynamic entrepreneurial, technological, banking and financial services ecosystem."

Dynamic entrepreneurialism in France? My word. The power of cryptos to transform the world for the better never ceases to amaze. Perhaps one day I may even be able to access my Credit Agricole current account online on a regular basis.

Finally, we have Ripple whose subsidiary Ripple Markets Ireland has also been granted approval as a VASP. Ripple has chosen Ireland partly due to its status as one of the two largest tax havens in the world, but this is not the only reason for this move. Senior Vice President Eric van Miltenburg is as gushing about MiCA as I am:

“By providing regulatory clarity for the industry, Ireland — and the EU more broadly — are boosting confidence in the digital assets, payments and fintech ecosystem and demonstrating their commitment to the long-term development of these industries.”

Go the EU!