tl;dr
My initial take on the dramatic shift in US political power as it relates to cryptos, just briefly for now. I know we will come back to this topic later.
Market Snap
Market Wrap
The initial response to the midterms was a minor sell-off in BTC down to $75k or so. A rebound is clearly in progress, though perhaps hampered a touch by a stronger-than-expected US job openings for September, which complicate a simple monetary-easing narrative.
I see that the EU, lauded for its world-beating crypto regulation MiCA (Markets in Crypto-Assets), will today publish its “Enlargement Package”. Ooh-er missus.
Curious Cryptos’ Commentary – US midterms
After those results, Trump looks like being the lamest of lame-duck Presidents, a situation common to many Presidents in the second half of the final term of their maximum two terms, a constitutional limit that repeatedly proves its worth.
Historically stocks tend to do well after midterms. A repeat of that pattern would be welcomed by everyone. Early signs are encouraging on that front.
As for cryptos, the picture is a little mixed. The CCC has long railed against the partisan nature of US crypto politics. We wish it were not so. It is not of our making, but in general it is a thing, and we must deal with it.
Much earlier this year, the CCC declared the CLARITY Act was dead long before anyone else came to that conclusion. There is no chance of it returning to the Senate now, though I note that outgoing Senator Thom Tillis, who is a Republican and voted against CLARITY, will be replaced by Democrat Roy Cooper, who has publicly supported “clear, stable regulations” for cryptos. Perhaps our call for a bipartisan approach is being heard in Washington.
Trump will come under increasing pressure regarding his family’s somewhat suspect private crypto activities, which the CCC called out before, here and here, two short commentaries I thoroughly recommend you read if you have not done so already.
The incoming Chair of the House Oversight Committee, Robert Garcia, is on a personal mission to address “Trump family corruption”. We can expect some collateral damage to the reputation of cryptos as Garcia gets stuck in, an outcome the CCC has warned of in the past in relation to the Trump family.
All eyes will also be on Senator Elizabeth Warren and her anti-freedom, anti-liberty, and anti-privacy army, which has been bolstered by the unwelcome return of Sherrod Brown, who was unseated just two years ago. Warren is in line to chair the Senate Banking Committee. Her long-held ambition to maintain the big banks’ hegemony over TradFi activities, at a financial cost to the rest of us but allegedly helpful to her campaign coffers, will no doubt now be prosecuted with greater enthusiasm.
Why does this matter?
We don’t know yet for sure. Now that the regulatory agencies in the US are staffed by crypto enthusiasts, let us hope that over the next two years the crypto revolution will be so deeply embedded in TradFi that not even liberty deniers such as Warren can do much damage.