Daily: Upcoming SEC discussion / Huobi's $1B Fund

Boxmining avatar Boxmining
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Description

Upcoming SEC discussion with the CFTC will discuss if Ethereum (ETH) and Ripple (XRP) is a security or not - and uncertainty over the outcome is spreading a FUD on the market. Huobi announces a $1 Bil...

AI Analysis

This video dives into some major discussions impacting the crypto market, particularly the looming decision by the SEC and CFTC on whether Ethereum and Ripple are securities. This uncertainty is causing significant fear in the market, but there's also exciting news like Huobi's massive $1 billion blockchain fund, showcasing a bullish outlook despite regulatory concerns. It’s clear that cryptocurrency is becoming a global force, infiltrating popular culture and prompting countries worldwide to rethink their stance on this transformative technology.

Here's a closer look at the key points:

* Upcoming SEC and CFTC Hearing on Ethereum's Status: Today, May 7th, 2018, marks a crucial meeting where the SEC (Securities and Exchange Commission) and CFTC (Commodity Futures Trading Commission) are expected to discuss if Ethereum is a "security." This decision is incredibly significant and will play a major role in the future of cryptocurrency.
Market Impact and FUD: The anticipation of this hearing has led to a noticeable market downturn, especially for major cryptocurrencies like Ethereum, Ripple, and Bitcoin Cash. There's a lot of FUD (Fear, Uncertainty, and Doubt) spreading. Interestingly, it's observed that the fear* of upcoming news often affects the market more severely than the actual news itself, as seen previously with China's crypto ban where the market surprisingly turned positive after the ban was announced.
* The Ethereum Security Debate: The Wall Street Journal reported that regulators are re-examining Ethereum's status, which was somewhat unexpected. The core of the debate stems from Ethereum having had a public ICO (Initial Coin Offering) back in 2014. Despite it being four years later, the legal landscape for cryptocurrencies is still a murky, uncharted territory.
* Arguments For and Against Ethereum as a Security:
* Against: Joseph Lubin, an early supporter of Ethereum, confidently asserts that after extensive legal consultation, Ethereum is not and never was a security.
* For: Conversely, SEC Chairman Clayton has previously suggested that a public offering which engages the public could be a trait leading to a security classification. This is why many projects are now opting for "reverse ICOs," which are more private sales to avoid this classification.
* Proof-of-Stake (PoS) Concern: The upcoming transition of Ethereum to Proof-of-Stake, where users can "stake" their Ethereum to earn more, is another element that some argue could make it look more like an investment contract, hence a security.
* Bitcoin as a Precedent: Bitcoin, in contrast, is classified as a commodity and is traded under the CFTC, offering a benchmark for non-security classification.
* Behind Closed Doors Discussion: While the Wall Street Journal reported the meeting, it's not on the public schedule. It's likely that the SEC and CFTC will discuss this privately, with no clear timeline for an announcement.
* Potential Ramifications of Security Classification: If Ethereum were to be classified as a security, it would severely disrupt how Americans can access and trade it. It would likely need to be listed on a regulated securities exchange, making it much harder for general users to buy and sell.
* Huobi's $1 Billion Blockchain Fund: On a more bullish note, the Chinese exchange Huobi has announced a significant $1 billion fund dedicated to blockchain incubation. This highlights the immense interest and investment in blockchain technology within China, despite the country's bans on ICOs and cryptocurrency trading. It’s felt that this public fund signals strong confidence in the future of cryptocurrencies, and truly, the decentralized nature of crypto makes it incredibly hard to stop once it's out in the world.
Cryptocurrency in Pop Culture (Silicon Valley): The increasing appearance of cryptocurrency discussions in mainstream media, such as the HBO series Silicon Valley*, where characters are seen mining crypto and discussing decentralized networks, is a healthy development. It shows that crypto is infiltrating the public mindset beyond just talk of bubbles, focusing instead on its applications and the importance of decentralization.
* Global Shift in Attitude: Crypto is a global movement, with each country adopting different approaches. South Korea, for instance, is gradually easing its stance on cryptocurrencies, potentially allowing local ICOs in the future. This shift reflects a growing realization that crypto isn't just a scam, but a transformative technology that needs proper nurturing. It's felt that countries that are more open and nurturing to crypto development, like Malta (which welcomed Binance), will gain a significant advantage in becoming future blockchain hubs.

Transcript

Hey guys today is Monday May 7th 2018 and do you know what day that is? Today is the day that the SEC and the CFTC is going to meet up to discuss Ethereum the smart contract platform itself and security or not. So that's going to happen today and I want to say that this video is made before this hearing so we're going to discuss the kind of events leading up to this and what significance it has for the future of cryptocurrency in general because it's going to play a huge major role if decisions...