5th February 2025 > > Regulatory revolution & El Salvador.

tl;dr

A regulatory revolution is in full swing in the US. El Salvador cocks a snook at the IMF.

Market Snap

Market Wrap

BTC has regained the magical $100k and lost it again several times since the Trump Tariff wars exploded on Friday. Stocks are mostly unaffected. I cannot explain crypto’s relative underperformance, though I note that altcoins are faring stronger than BTC since yesterday.

Curious Cryptos’ Commentary – US regulation

The flurry of crypto-related activity in the US continues apace.

So far, we have had the establishment of a committee to investigate the feasibility or otherwise of a BTC strategic reserve fund (spoiler alert: it is going ahead) which will report by July 23rd. We also have a committee looking at the possibility of a US sovereign wealth fund (spoiler alert: it is going ahead) which will report by April 5th. The combination of the two appears to be the direction of travel.

Yesterday saw the formation of a working group “… tasked with drafting a comprehensive regulatory framework for digital assets and stablecoins.” The single biggest barrier to full-scale institutional adoption is the lack of regulatory clarity, which is also an impediment to regulated banks providing custodial services. The stampede into BTC once this issue is out of the way is going to be mightily impressive.

The House Oversight Committee is investigating the malpractices behind Operation Choke Point 2.0 amidst claims that FDIC and the SEC have been surreptitiously putting pressure on banks to steer clear of providing crypto-related services to clients. On Thursday there will be a hearing at the Financial Committee titled “Operation Choke Point 2.0: The Biden’s Administration’s Efforts to Put Crypto in the Crosshairs”. Putting to one side the partisan nature of the title, it is hoped that one of the outcomes of this hearing will be explicit instructions to banks that they can provide crypto services to their clients, pending the regulatory clarity referred to above.

Senator Bill Haggerty yesterday introduced a new bill known as Genius (Guiding and Establishing National Innovation for US Stablecoins) which will require monthly reports of the assets backing stablecoins, and requiring those assets to be cash or cash-like instruments such as short-dated treasuries. This has long been a demand of the CCC’s, so it is nice to finally have some recognition on this important point. Bill explains:

“My legislation establishes a safe and pro-growth regulatory framework that will unleash innovation and advance the President’s mission to make America the world capital of crypto.”

You can’t argue with that.

…

There is a regulatory revolution underway in the US, which will be extremely positive for the crypto industry.

Curious Cryptos’ Commentary – El Salvador

Following the IMF’s recent slap-down of El Salvador (https://www.curiouscryptos.com/post/2nd-february-2025-tariffs-el-salvador-deepfake) the second tranche of loan money now totalling $3.4bn has been paid.

To his credit, President Nayib Bukele immediately went out and bought an additional 11 BTC over and above the daily purchase of 1 BTC with some of that cash.

Have some of that, IMF!astonishment at the lack of savviness on display.