US Lawmaker Likes Bitcoin — Urges Policymakers to Embrace Innovation in Regulation
U.S. Representative Patrick McHenry is pro-bitcoin. He is now hosting the Bitcoin whitepaper on his official congressional website and has called on other lawmakers to embrace innovation like Bitcoin. He believes that the cryptocurrency is unstoppable and governments cannot kill it.
Pro-Bitcoin US Lawmakers
A growing number of U.S. lawmakers have recently spoken in support of Bitcoin. Among them is Congressman Patrick McHenry from the state of North Carolina. On Friday, he talked on CNBC’s Squawk Box about how to approach regulation after last week’s market swings. “You can’t put technology back in the box. Innovation is here. We have to embrace. We have to broaden access to our markets, we have to broaden access to our financial products,” he said.
McHenry has long been a Bitcoin advocate. Last week, when the lawyer of the self-proclaimed Satoshi Nakamoto, Craig Wright, threatened to sue a few website owners for hosting the open-source Bitcoin whitepaper on their websites, McHenry uploaded the document onto his official congressional website. He then tweeted:
Policymakers should be on the side of innovation and ingenuity, which are vital to American competitiveness. I hope others in US govt join me. #Bitcoin
Another pro-Bitcoin U.S. politician is Miami Mayor Francis Suarez. He uploaded the Bitcoin whitepaper onto the Miami city website following the Craig Wright lawsuit threat. “The city of Miami believes in Bitcoin and I’m working day and night to turn Miami into a hub for crypto innovation. Proud to say Miami is the first municipal government to host Satoshi’s White Paper on government site,” Suarez wrote Wednesday.
Praising Suarez’s efforts in promoting Bitcoin and innovation, McHenry replied: “Impressed by what you are doing in Miami, Mayor Francis Suarez. I hope more policymakers will join us to support American innovation.”
Earlier this month, Suarez discussed putting some of Miami city’s treasury reserves in BTC and said he is working to allow payments of city services in the cryptocurrency.
McHenry has said that bitcoin is unstoppable and governments should not attempt to ban it. “The world that Satoshi Nakamoto, author of the Bitcoin whitepaper, envisioned and others are building is an unstoppable force,” he said during a hearing of the Committee on Financial Services in July 2019. “We should not attempt to deter this innovation, and governments cannot stop this innovation and those that have tried have already failed.” McHenry additionally emphasized: “Due to the nature of the technology of Bitcoin, governments cannot kill it, nor should they.”
Last week, McHenry commented on Joe Biden’s pick for the new chairman of the U.S. Securities and Exchange Commission (SEC), Gary Gensler. He believes that the MIT blockchain professor’s receptiveness to new financial technologies and cryptocurrency is positive.
The U.S. Senate also has a vocal bitcoin advocate. Sen. Cynthia Lummis from Wyoming has vowed to help her colleagues in Congress understand that bitcoin is a great store of value.
What do you think of pro-bitcoin U.S. politicians? Let us know in the comments section below.
Goldman and Interactive Brokers Execs Claim Wallstreetbets Trend Could ‘Take Down the System’
The heavy hitters in traditional finance have been concerned about the recent stock market action fueled by Redditors and a colossal number of retail investors. This week a Goldman Sachs executive warned that if these short squeezes continue it could “snowball through the market.” Moreover, Interactive Brokers founder Thomas Peterffy made similar comments this week saying these types of systemic risk can “take down the entire system, theoretically.”
Wallstreetbets Trend Could ‘Snowball Through the Market’
2021 has been an interesting year so far and this week a Reddit forum called r/wallstreetbets sparked a whole new hot topic. Four days ago, news.Bitcoin.com reported on the stock market fiasco that started with short squeezing Gamestop (GME) shares. But GME shares were not the only stocks that felt the push as the wallstreetbets (WSB) trend started leaking into a number of other types of shares.
For instance, stocks from the Russell 3000 Index (RUA) were targeted including tickers like NOK, GOGO, AMCX, and FIZZ. The social media craze even leaked into the cryptocurrency world pushing up coins like dogecoin and XRP as well. Estimates assume that short-sellers have lost “$70.87 billion from their short positions,” according to statistics from the financial data analytics firm Ortex.
An analysis from Zerohedge discloses that Melvin Capital lost a whopping $7 billion during the month of 2021. “Melvin Capital lost 53% in January, as Gabe Plotkin (a former SAC Portfolio Manager), lost over $5.3 billion in one month,” the report noted.
The financial newsdesk has also been reporting on another WSB trend taking place during the last week as short squeezers want to squeeze the silver market. One thread on r/wallstreetbets suggested that the power of the masses could squeeze the price of silver from $25 to $1,000. Zerohedge has been reporting on trends that show Redditors and social media users have managed to invoke demand for silver.
“In the 24 hours proceeding Friday market close, SD Bullion sold nearly 10x the number of silver ounces that we normally would sell in an entire weekend leading to Sunday market open,” the finance reporter disclosed. “In a normal market, we normally can find at least one supplier/source willing to sell some ounces over the weekend if we exceed our long position (the number of ounces we predict we will sell over the weekend).”
Additionally, polygon.com contributor Owen S. Good reported this week on how the meme-driven stock’ rally rescued AMC theaters from $600 million in debt. Meme lords and Redditors saved this business, not the U.S. federal government, not the bankers. Those groups were actively shorting AMC down the toilet. “Theater chain gets unexpected lifeline when private equity trades a corporate IOU for stock,” the author’s report explains.
r/wallstreetbets is now the largest hedge fund in the world.
Excepts it’s completely decentralized and entirely democratic.
Furthermore, the infamous Tyler Durden from Zerohedge wrote about an investors report published by Goldman Sachs executive David Kostin. Durden writes that the latest Goldman report warns “if the short squeeze continues, the entire market could crash.”
“The most heavily-shorted stocks have risen by 98% in the past three months, outstripping major short squeezes in 2000 and 2009,” Kostin’s study details. “This week demonstrated that unsustainable excess in one small part of the market has the potential to tip a row of dominoes and create broader turmoil,” the Goldman analyst added.
According to Durden from Zerohedge, Goldman’s Hedge Fund VIP list declined by 4% this week during the WSB fiasco. “In recent years elevated crowding, low turnover, and high concentration have been consistent patterns, boosting the risk that one fund’s unwind could snowball through the market,” Goldman’s David Kostin concluded. Durden interpreted Kostin’s final conclusion in a different way.
The author writes:
Translation: if WSB continues to push the most shorted stocks higher, the entire market could crash.
Interactive Brokers Chairman: ‘It Can Take Down the Entire System, Theoretically’
Goldman Sachs executives are not the only financial heavyweights weighing in on the stock market craziness and the possible aftermath. The founder and chairman of Interactive Brokers Group Inc., Thomas Peterffy, discussed his thoughts about the stock market madness in an interview with Marketwatch financial author Mark DeCambre.
On Thursday, DeCambre said that Peterffy explained that the short squeeze action could go on for a very long time unless it was stopped. DeCambre also wrote that Peterffy was worried about systemic risk and “the potential” for this trend “to ripple throughout the market.”
“It can take down the entire system, theoretically,” Peterffy stressed in his interview with DeCambre. “There is no reason why a short squeeze cannot go on indefinitely,” the Interactive Brokers founder detailed.
i'll be on @business at 4:20 pm ET to talk memestocks, gamestonk, robinhood, bitcoin, dogecoin, papa musk, and where we go from here
Meanwhile, a number of cryptocurrency enthusiasts have been cheering the WSB trend on as the virality of WSB vs Wall Street has encapsulated nearly all the social media conversations in the U.S. Meltem Demirors, the CSO of Coinshares, Europe’s largest digital asset manager with $3 billion in assets under management (AUM), gave her interpretation of the recent stock market events rattling the status quo.
“At its core, the events of this week are about free speech, censorship, and power. We are witnessing the fastest roll-up of power in human history,” Demirors said.
“As our lives become increasingly dependent on digital mediums,” Demirors continued. “So does the ability of powerful entities like governments and corporations to censor our right to free speech, our right to gather, our right to protest, and more. There is an unprecedented amount of power up for grabs, and what we see is a battle for control. It already played out on the political stage, and is now playing out in financial markets, financial media, Fintech platforms, and social media,” the Coinshares CSO added.
Furthermore, on January 29, the cryptocurrency trading platform Bittrex Global revealed that it was listing tokenized stocks for a number of the shares the WSB trend has been affecting. The exchange detailed that it made the decision because Bittrex wanted to “ensure retail investors have exposure to stocks they may wish to trade anytime during any day of the week.”
The crypto exchange also plans to list any other mainstream stocks that other finance trading platforms may censor in the future. The newly listed tokenized shares on Bittrex Global include Gamestop (GME), AMC Entertainment (AMC), Blackberry (BB), Nokia Corporation (NOK), and the Ishares Silver Trust (SLV). However, U.S. residents cannot participate, as Bittrex Global geo-blocks American citizens visiting the web portal.
“Bittrex is regulated in Lichtenstein and Bermuda and thus U.S. investors may be blocked from trading in these securities but other jurisdictions may be able to trade in these securities if they are interested,” the company details.
What do you think about the recent wallstreetbets (WSB) trend and Goldman and Interactive Brokers executives warning of systemic risk to the traditional finance system? Let us know what you think about this subject in the comments section below.
Ripple Formally Responds to SEC Allegations — Claims SEC Picking Winners and Losers, Distorting Facts About XRP
Ripple Labs has officially responded to the complaint by the U.S. Securities and Exchange Commission (SEC). Besides explaining that the XRP cryptocurrency is not a security, Ripple accuses the securities regulator of being out of step, picking winners and losers, as well as distorting facts regarding the cryptocurrency.
In the court document filed on Jan. 29, Ripple claims that XRP is not an “investment contract,” insisting that the crypto “is a virtual currency and thus, outside the SEC’s jurisdiction.” Furthermore, the company stated that it never held an initial coin offering (ICO), never offered future tokens to raise money, and has no relationship with the vast majority of XRP holders.
The SEC, however, is “out of step domestically and globally,” claims Ripple. The company noted that no other regulators in the world have considered XRP to be a security. Ripple alleges that “Basically, on its way out, the Trump administration sought to undo the determination that XRP was a virtual currency made during the Obama administration.”
Among the regulators that have concluded that XRP is not a security include the U.S. Department of Justice and the Financial Crimes Enforcement Network (FinCEN), Ripple noted in its response. The two U.S. authorities determined in 2015 and 2020 that XRP is a virtual currency. Furthermore, the company added that the U.K. Financial Conduct Authority (FCA) and the regulators in Singapore and Japan have similarly concluded that XRP is a not a security.
Ripple also accuses the SEC of “picking winners and losers.” The company claims that “there is no principled distinction between XRP’s current function and that of BTC or ETH.” Yet, the SEC determines that the two cryptocurrencies are not securities. In addition, Ripple asserted that “XRP is a great deal more environmentally friendly than BTC and ETH, considering it avoids the mining process … That must matter from a policy perspective.”
Moreover, Ripple alleges that the SEC has “distorted the facts,” stating that “The complaint filed by the SEC is full of cherry-picked quotes taken out of context, and draws conclusions that are unsupported by both the facts and the law.”
The SEC filed a lawsuit against Ripple Labs, CEO Brad Garlinghouse, and co-founder Christian Larsen in December alleging that they sold over 14.6 billion units of XRP, which it considers unregistered security, for at least $1.38 billion. After the SEC’s lawsuit, several major cryptocurrency exchanges delisted XRP, including Coinbase, Binance, Okcoin, and Blockchain.com.
Ripple says it wants to resolve the dispute with the SEC as fast as possible, noting that since the securities watchdog brought the lawsuit against the company and its executives, XRP lost almost half of its market value. This has caused retail XRP investors with no connection to Ripple to suffer billions of dollars in losses.
What do you think about Ripple’s response to the SEC’s allegations? Let us know in the comments section below.
Visa CEO Says Payments Giant Set to Introduce Cryptocurrency Trading on Its Network
Payments giant Visa Inc’s CEO Alfred Kelly has revealed his firm’s plans to enable cryptocurrencies trading on its network. Kelly, who is also chairman of the firm, explains that there is no reason not to add cryptos when these are increasingly becoming “a recognized means of exchange.”
Digital Gold Segment
In an earnings call with analysts, Kelly opines that due to Visa’s “global presence, its partnership approach as well as its trusted brand”, the fintech giant is “uniquely positioned to help make cryptocurrencies more safe.” The CEO adds that Visa also wants to make cryptos “more useful and applicable for payments.”
However, to achieve this, Kelly says his organization will divide the crypto market into two segments, namely cryptocurrencies and digital currencies. Describing the assets that will be included in the cryptocurrency segment, the CEO says these will be viewed “as digital gold.” According to Kelly, such currencies are “predominantly held as assets that are not used as a form of payment in a significant way at this point.” The Visa boss then discusses the firm’s plan for such currencies saying:
Our strategy here is to work with wallets and exchanges to enable users to purchase these currencies using their Visa credentials or to cash out onto a Visa credential to make a fiat purchase at any of the 70 million merchants where Visa’s accepted globally.
According to Kelly, this strategy will be similar to Visa’s approach to “connect closed-loop wallets such as Line Pay and Paytm.”
Digital Currency Segment
Concerning digital currencies that will feature in the second segment, the Visa CEO says these will be consist of “fiat-backed digital currencies including stablecoins and central bank digital currencies.” He adds that these emerging payments innovations can potentially be “used for global commerce much like any other fiat currency.”
Meanwhile, the Visa CEO reveals some of the 35 organizations that have already chosen to issue Visa cards. These include leading digital currency platforms and wallets providers like “crypto.com, Blockfi, Fold, and Bitpanda.” According to Kelly, these wallet relationships “represent the potential for more than 50 million Visa credentials.”
What do you think of Visa’s plan to introduce crypto trading on its platform? You can share views in the comments section below.