27th November 2024 > > Sellers & the UK.

tl;dr

Long-term holders are feeding the greed of the spot BTC ETFs, for now at least. The UK makes an astonishing about turn, completely out of the blue.

Market Snap

Market Wrap

Want to know why we have sold off this week? Jim Cramer of CNBC has pivoted in favour of cryptos once again. He is a masterclass in flip-flopping and has made a good living out of being wrong with almost all his calls.

Best for us all if his losing streak has been properly broken this time.

Curious Cryptos’ Commentary – Who are the sellers?

Glassnode has published this interesting graphic:

The spot BTC ETFs are buying coins from long-term holders in the OTC market, bypassing the retail focussed centralised cryptocurrency exchanges, though no doubt Coinbase acts as a broker to many of these trades.

And that does make sense – anyone who bought BTC in the early part of the last decade would undoubtedly have a “just shy of $100k” target for part of their stash. Indeed, the first time I ever came across BTC was when a work colleague bought just one BTC when it was priced at less than $1k. His target was $100k and I have no doubt he has stuck to that target.

Both of us are likely to be in agreement that we should have been a touch more aggressive when building such an early stash.

Curious Cryptos’ Commentary – The UK

The antagonism shown by the UK towards cryptos was very much inspired by Rishi Free Money Sunak, the Gary Gensler of the UK. He frequently lied about cryptos whilst Chancellor, and doubled down on the pretence whilst PM. There are few in the crypto world who mourn his self-imposed and dramatic fall from grace.

The landslide victory in the general election earlier this year was not particularly cheering for crypto enthusiasts either, given that Sir Keir Free Gear Farmer Harmer Starmer is a self-proclaimed and proud socialist. Socialism and cryptos are not bed-fellows, they are not friends, nor are they even vaguely acquainted with one another. The freedom and liberty espoused by cryptos is anathema to any true socialist who believes in the principle of the common ownership of production, a coercive, controlling, and fundamentally flawed political philosophy.

The UK regular, the Financial Conduct Authority (FCA), is still struggling with trying to overcome the bureaucratic burden imposed upon itself by Andrew Bailey, currently the Governor of the Bank of England, whilst he was head of the FCA. Bailey never once attempted to improve customer protection, he was merely interested in building a bigger empire for himself, which he did on a grand scale. He is good at looking good whilst evading responsibility. He is very bad at actually achieving anything of note.

In contrast, it seems the new management at the FCA might have some cojones.

Despite the FCA previously railing against spot BTC ETFS in the US, Europe, Hong Kong, and other centres of financial excellence (“ill-suited” for retail buyers) a crypto road map has surfaced with some interesting and challenging milestones attached:

First up will be two discussion papers (I know, I know, but that is how the bureaucracy works) by the end of this year. Yep, you heard that right. 2024, not 2028. I am as surprised as you are. These papers will address the issues of market abuse and disclosure standards, subjects that are close to all regulators’ hearts.

Draft legislation including cryptos, stablecoins, and staking is planned for early 2025. We wish, but at least there is some ambition on display here. The whole shebang should be ready to go in the middle of 2026.

Disappointingly, the FCA’s director of payments and digital assets, Matthew Long, is well-versed in the dark art of speaking platitudes:

“We’re committed to working closely with the Government, international partners, industry, and consumers to help us get the future rules right.”

Let us hope with that fake attitude he is kept as far away from this project as possible.

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You have to hand it to the EU and its world class crypto regulation, MiCA, forcing the hand of the FCA. If only we could simply adopt MiCA right now then the world would be a much better place for all UK citizens.