TWR: Bitcoin Down — Our Take

What we saw on the desk

The good news is we did not see one single coin sold yesterday — instead, we saw a ton of action on the buy-side as investors with money on the sidelines piled in as they finally got the pullback they were waiting for. We also saw clients who chased BTC up (big time) to near all time highs this week not get phased by the correction and instead, BTFD (bought the fu**ing dip)! BTC led the way for buys but ETH was a close second, followed by a mixture of alts and some more exotic tokens.

Rumour has it

US Treasury Secretary Steven Mnuchin might have a parting gift for the crypto space…

“This proposed regulation would, we think, require financial institutions like Coinbase to verify the recipient/owner of the self-hosted wallet, collecting identifying information on that party, before a withdrawal could be sent to that self-hosted wallet”

Why is this a big deal? The essence of cryptocurrencies like Bitcoin is that they allow anyone who wishes to custody their own assets privacy and control of their transactions and assets overall. Users can create a wallet by downloading third-party software on their computers/smartphones or through hardware devices that store digital assets (creating their own bank, if you will). These types of self-custodial solutions come cheaper than traditional financial services.

Their ideas:

  1. Banning or denying platforms if they allow transactions with self-hosted wallets
  2. Introducing volume limits on peer-to-peer transactions
  3. Mandating that transactions occur with a financial institution
  1. The first countries to implement these regulations would put their status as a financial and innovation hub at risk. This would open the door for competitor countries to become even more friendly in order to attract business and induce a brain drain on the imposing country.
  2. We could see a bifurcated world where we have one world of these self-hosted wallets that can only interact with another but theres no way to get any interaction with hosted (or, custodial) wallets. Based on the premise behind Bitcoin and other cryptocurrencies, this could have a positive impact on price for cryptocurrencies held outside of this closed, highly regulated financial system.

In case you missed it…

Privacy. Security. Best Price Execution.

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