WARNING: Lawmakers are KILLING CRYPTO 🗡🗡
Description
Cryptocurrency markets are falling due to extremely bearish sentiment and US Lawmakers. Lawmakers are bent on trying to kill crypto- The SEC is calling everything a security (apart from Bitcoin). Pres...
AI Analysis
The crypto market is currently experiencing a severe downturn, with Bitcoin, Ethereum, and altcoins all bleeding out, largely due to aggressive actions by the US government and broader economic instability. Lawmakers seem intent on stifling the crypto industry through new taxes and regulations, which is creating extreme bearish sentiment. Despite this onslaught of negative news, Bitcoin has surprisingly held above the $20,000 mark, which is a key level to watch.
Here’s a breakdown of the key factors impacting the market:
* Current Market Conditions:
* Cryptocurrency prices are plummeting, with major assets like Bitcoin and Ethereum seeing drops of 5-6% or more, and altcoins following suit.
* Market sentiment is extremely negative, and there's a strong sense of fear and bearishness among investors.
* Interestingly, even with all the bad news, Bitcoin has managed to hold above $20,000, which is considered a significant support level, indicating some resilience despite the overwhelming negativity.
* Despite the widespread panic and "crypto crash" headlines, the presenter personally feels that now might actually be a good time to dollar-cost average (DCA) into the market, buying small amounts regularly.
* The Stock Market's Influence:
* The crypto market is highly intertwined with the traditional stock market, meaning what happens in stocks directly affects crypto.
* Currently, stock markets like the Dow Jones and NASDAQ are in "fear mode" and falling.
* This decline is paradoxically linked to positive recent labor data, such as historically low jobless claims. While seemingly good, this data leads to concerns that the Federal Reserve will accelerate interest rate hikes, which generally dampens investor enthusiasm and hurts markets.
* Banking Sector Troubles:
* The collapse of Silvergate, a major crypto-friendly bank, has sent shockwaves through the financial system, creating widespread fear.
* This fear isn't confined to crypto-focused institutions; it's spreading to larger, established banks like Silicon Valley Bank and Credit Suisse, which have experienced massive single-day sell-offs and "bank runs."
* The worry is that if specialized banks like Silvergate can collapse, bigger banks might also be vulnerable, causing investors to pull their money out.
* Banks are responding by selling off assets, which the presenter views as a worrying sign that underlying financial conditions might not be as stable as they appear.
* Biden Administration's Policies Targeting Crypto:
* Proposed Capital Gains Tax Hike: The Biden administration is proposing to double the capital gains tax in the US to 40%. The presenter finds this idea completely nonsensical, arguing that such a high tax rate discourages investment and economic growth. They compare it to Hong Kong's zero capital gains tax, which actively encourages people to invest their money, acknowledging that investors should be rewarded for taking risks. Forcing a 40% tax on investment gains makes no logical sense if the goal is to foster investment.
* New Crypto Mining Tax: There's a proposal for a 30% tax on electricity used for crypto mining. The presenter sees this as a direct attempt to drive crypto miners out of the US. They argue that mining is a global activity that can be done anywhere, so imposing such a high tax simply incentivizes miners to relocate to more favorable jurisdictions. This policy is seen as incredibly shortsighted and damaging to the US's competitiveness in the crypto space.
* The presenter believes the administration is targeting the crypto industry because "crypto bros" are seen as easy targets who have recently gained wealth and lack the strong lobbying power of other major industries.
* SEC's Aggressive Stance and Regulatory Chaos:
* Gary Gensler, the SEC Chairman, is perceived as being "hell-bent on completely destroying crypto," asserting that "everything but Bitcoin is a security."
* Ethereum as a Security? Following the SEC's narrative, the New York Attorney General is now suing KuCoin, explicitly listing Ethereum as an unregistered security being offered on their platform. This is a significant development, as Ethereum is the second-largest cryptocurrency.
* Regulatory Turf War: The presenter highlights the massive confusion and conflict between the SEC, which labels most cryptocurrencies as securities, and the CFTC (Commodity Futures Trading Commission), which often considers them commodities. They describe this as a "big mess of really just egos," where different government departments are vying for jurisdiction over crypto. The underlying motivation is the potential for huge future revenue gains through issuing and selling licenses once a regulatory framework is established.
* Challenging the SEC: A surprising moment occurred when a judge cleared Binance US's acquisition of Voyager accounts, effectively ignoring the SEC's argument that Voyager was selling unregistered securities. The presenter views this as a positive sign, with the judge essentially telling the SEC to stop overreaching and "waving that stick," suggesting their arguments aren't always compelling.
* Ultimately, the presenter expects this regulatory chaos to continue for a long time. Every country will have to decide whether cryptocurrencies are a currency, a commodity, or a security, leading to ongoing battles and potentially hindering crypto's progress.
In summary, the crypto market is facing a difficult period due to a confluence of factors: a bearish sentiment, broader economic instability affecting traditional financial markets, and particularly the aggressive actions of the US government through proposed taxes and a confusing, often hostile, regulatory environment led by the SEC.
Transcript
Good morning everyone. Welcome back to Box Mining. And today is an amazing day in Hong Kong. But it's a terrible day in crypto. So I woke up today and just saw all the prices of the major currencies, Bitcoin, Ethereum. They're all plummeting. More than 5%, it's actually 6% right now as we speak. And yeah, the markets are just bleeding out with altcoins also dumping. Market sentiment is extremely bad. People are extremely bearish right now. Especially when there's almost like multiple punches of...