Analysis: Cryptocurrency is absolutely flying, simply put. Bitcoin touched $20,000 CAD for the first time since early 2018 and is up 10% on the week. Most major coins are up across the board, but the conversation and volume seems to be behind Bitcoin first and foremost. Bitcoin dominance is over 65%, it’s highest level in months.
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The US Presidential Election Has Not Produced A Clear Winner Yet- We Provide An Overview Of Each Candidate’s Known Crypto Stance
President Trump is alleged to have told Treasury Secretary Steven Mnuchin to ‘[g]o after Bitcoin [for fraud].’ The President tweeted in July 2019 that he is ‘not a fan of Bitcoin and other Cryptocurrencies…’ and added that ‘[w]e have only one real currency in the USA, and it is stronger than ever…’ Since then, the Trump Administration has made a number of concrete regulatory steps regarding crypto. Most notable is the Department of Justice’s (DoJ) cryptocurrency enforcement framework published in October.
That report affirmed the DoJ’s broad assumptions of jurisdiction and readiness to prosecute offshore crypto businesses.
Also notable are the Office of the Comptroller of the Currency’s (OCC) issuing two interpretive letters that sought to clarify how banks can interact with crypto. The letters, which gave banks the green light to custody crypto and hold stablecoin reserves, were described as ‘trying to demystify crypto’ by the OCC’s head, Brian Brooks (Coinbase’s Chief Legal Officer from 2018 to 2020). On the other hand, candidate Joe Biden’s stance on cryptocurrency has not been articulated.
Crypto did not emerge as a Democratic primary topic, except for candidate Mike Bloomberg’s financial reform plan which called for ‘a clear regulatory framework for cryptocurrencies’ and candidate Andrew Yang’s calls for ‘clear and transparent rules.’
However, Democratic politicians were some of the most ardent critics of Facebook’s Libra project with calls for Facebook to be ‘broken up’ at Congressional hearings with Mark Zuckerberg.
What will the price do if Trump or Biden wins? One expert thinks he knows the answer: “Bitcoin will rise in value no matter who wins the US election”, said Jeff Dorman, chief investment officer at cryptocurrency hedge fund Arca.
He went on to point to the “lowering fear factor” happening on Wall Street as more and more institutions move corporate treasury funds or investment dollars into Bitcoin. Trump or Biden, he expects this trend to continue.
Takeaway: The Trump Administration has maintained an assertive approach towards crypto regulation and law enforcement over the past 4 years. This has translated into high-profile actions against BitMEX, Bitfinex/Tether, Telegram, Kik, and others. On the other hand, Biden’s approach on crypto is uncertain.
Beyond the distaste shown by Democrats during hearings on Libra, one might next make estimates on approaches to crypto based on broader policy positions, such as Biden’s support for Dodd Frank. In either case, the election is just one factor in a mix of tectonic plates pushing crypto around right now.
Other Weekly Headlines 📰
The Ethereum 2.0 deposit contract, considered a key technical milestone ahead of the network’s proof-of-stake launch, has gone live. The contract is where prospective stakers will deposit ETH. The contract must collect 16384 deposits of 32 ETH each in order to trigger the launch of the Beacon chain, which is slated for December 1. The Beacon Chain acts as a bridge between ETH staked on the current mainnet and the transactions that coin is meant to process. – link – @EthereumFoundation
The New York Department of Financial Services sent a letter to regulated entities in the state, including crypto firms, urging them to consider environmental externalities of their business. Linda Lacewell, the department’s Superintendent, tweeted ‘New York’s Financial Regulator Wants Firms, Including Crypto Miners, to Look Closer at Climate Change Risks.’ – link – @CoinDesk
Fidelity Digital Assets has partnered with Singapore-based Stack Funds to offer custody solutions to the latter firm’s Asian clients. Stack Funds offers exposure to crypto via indexes. – link – @Bloomberg
A proposal to airdrop 400 of decentralized exchange UniSwap’s UNI tokens to users who used the exchange via third party interfaces, proposed through the venue’s governance mechanism, was rejected due to a failure to reach adequate support. Distribution of UNI tokens to users who directly used the exchange began in September and is planned to last 4 years. The proposal was submitted by Dharma, which offers interfacing with DeFi venues. Dharma’s proposal would have seen 400 UNI tokens distributed to 12,619 Ethereum addresses that interacted with the exchange via third party interfaces, such as Dharma. – link – @CoinDesk
The Reserve Bank of Australia has announced that it is exploring the ‘potential use and implications’ of a central bank digital currency using distributed ledger technology. The project will see collaboration between a number of banks and Ethereum development firm ConsenSys. – link – @RBA