21st February 2024 > > The UK & Massachusetts.

tl;dr

The UK government lets us down once more. Massachusetts may prove to be an interesting battle ground for the political divide in cryptos.

Market Snap

Market Wrap

For a brief period yesterday, it looked possible that BTC could breach $50k to the downside. ETF inflows remain strong, so perhaps sellers are being enticed by the common narrative that we will see a material correction of the order of 20% or more before the halving due in April. Here is one example of a graph supposedly supporting such a correction of an even greater magnitude – down to sub $20k:

Make of it what you will, but 2024 doesn’t look remotely like 2020.

Curious Cryptos’ Commentary – UK

Amongst many other broken promises. UK Prime Minister Rishi Sunak once stated:

“It’s my ambition to make the U.K. a global hub for crypto-asset technology.”

Of course, he meant nothing of the sort. Sunak, and his sidekick Jeremy “not my real surname but you cannot use it in a friendly family publication” Hunt, are both technocrats. Liberating technologies that reinforce democracy are an anathema to these types of politicians.

But we do know that not everyone in the government agrees with Sunak. He has far too many other promises that he is failing to fulfil that take up far too much of his time. Progress towards a stable regulatory environment in the UK may not be as impossible as Sunak wishes it to be.

Economic Secretary to the Treasury (larger and rather more bespoke business cards are required for the length of that job title) Bim Afolami has an ambition to provide a legislative framework for stablecoins, and also for crypto staking:

“We’re very clear that we want to get these things done as soon as possible. And I think over the next six months, those things are doable.”

That is a classic quote from a politician that probably means nothing is going to happen, ever. But enough of the cynicism, let’s assume he is being honest with us.

When asked specifically what “these things” that are “doable” might be, he replied:

‘“Short answer is, I don’t know ... there’s just a huge amount going on, so I don’t want to commit to

that now.”

OK, perhaps cynicism is the right way to go.

…

There appears to be a common (mis)perception that after the huge landslide handed to Labour in the general election later this year, the incoming government will be less crypto-friendly than the current shower.

I suspect that uninformed commentators peddling this lazy view of the world are simply copying and pasting the partisan split around cryptos evident in the US onto the UK. But there is more to it than that.

The global legislative leader for encouraging crypto adoption and development, attracting all those attendant tax dollars, is MiCA. The EU bureaucracy has many faults, but they got this one (largely) right. There is no reason why the UK cannot simply import MiCA into our regulatory framework, given how closely we remain aligned.

As PM, Sir Keir Starmer will jump at the chance of doing so – for reasons that have absolutely nothing to do with cryptos – but this one act of his will be a boon to us all.

Curious Cryptos’ Commentary – The anti-crypto army

Self-proclaimed general of the anti-crypto army, Senator Elizabeth Warren has a challenger for her Massachusetts’ seat.

Massachusetts is famed for hosting the landing place of the Mayflower in the early seventeenth century. The Puritans who decamped from England in protest at Popish policies under the Stuart King James the First had what might be described as an austere view of life, and the way we should live it. They took particular exception to an old English folk custom, the Skimmington. This was not because they did not share the same disapproval of the subjects of the Skimmington, but they disliked the rowdiness and the bawdiness of the parade. Adultery was bad, but disclaiming it with drums, effigies, and dancing, was a step too far. It is likely that the liberal reputation of cities like Boston would not meet with the approval of the Puritans, though I suspect they would be on Warren’s side when it comes to cryptos.

John Deaton, a former Marine who runs a law firm, has an upbringing that is somewhat at odds with Warren’s. The gory details are easy to find elsewhere. He is a Republican, but dig a little deeper than usual and you will find he describes himself as “the antithesis of Donald Trump”.

The important point is that he is a crypto supporter. He has been instrumental in the fightback against the SEC and its tendency towards decisions that are “arbitrary and capricious”. He describes cryptos as:

“… a story of survival and evolution, not just for the few but for the many.”

Warren will keep her seat, but I wonder if any vulnerability is shown up by John targeting her illiberal stance towards cryptos.