Crypto has made a loud entry into American politics.
President Joe Biden’s surrogates and the US left wing, led by Senator Elizabeth Warren, want to take down the industry with crippling reporting standards.
Then, in typical style, Donald Trump has taken a diametrical stance, accepting cryptocurrency donations and declaring that Biden and the SEC are “very much against it.”
The battle lines are drawn, and the President’s party is getting nervous.
So much so that, against all odds, the SEC suddenly approved applications for an Ethereum ETF.
Expectations of this news pumped Ethereum’s price by 25%, the largest single-day increase in the asset’s history.
Alt Macro readers have been ahead of this narrative since the January 15th publication. You’re sitting on a 44% gain today if you acted on it.
That’s some sweet alpha, and here’s some more for you.
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Separation of money and state?
We have two visions for the future of money.
Just like the church and state became separate authorities, some envision decoupling money and government.
Others see a broader role for central banks by creating Central Bank Digital Currencies, abbreviated to “CBDC.”
The former are typically Bitcoiners who want a currency with a deflationary supply that allows independent self-custody. They believe that excessive money printing by central banks and the government's power to freeze bank accounts erode sovereignty and freedom.
Then there’s the idea of creating a fully electronic cash system that is programmable, traceable, and easy for central governments to manipulate. This is the direction that most countries are headed.
Whether or not we are handing over too much power with CBDCs is a deep subject. Research and decide for yourself.
Crypto is now political
This week was monumental for crypto.
Trump vocalized his support, and the US House passed a Republican-led bill by 216-192, preventing Biden from creating a CBDC.
The CBDC Anti-Surveillance State Act got the backing of only THREE democrats.
Then, in a sudden and unpredictable turn of events, the SEC approved a set of applications for Ethereum ETFs, effectively confirming that it’s a political arm of the ruling Democratic party.
With anywhere between 62% and 94% of Gen Z and Millenials owning crypto, the parties need to appease a growing voter bloc, and the SEC’s swift action confirmed their growing clout.
A budding narrative
Four months ago, we discussed the possibility of Ethereum being the greatest beneficiary of Bitcoin’s ETF approval.
Then, based on the SEC’s actions (or lack thereof), the odds of its approval dropped.
Their swift U-turn this week revealed their political motivations, and it’s now evident that crypto will be a central issue in the US presidential election.
More than ever, bitcoin and crypto prices will correlate with political and legislative dynamics.
So here’s the one-line takeaway: If Trump wins, crypto moons.
Do you think crypto will win regardless of this Presidential election? Leave me a comment or hit reply if you’re reading this from your inbox—I would love to hear from you!
Disclaimers:
The author owns the digital assets or cryptocurrencies mentioned in this article.
All material on the Alt Macro web/server and newsletter is not investment advice, but is for general information only. You are solely responsible for making your own investment and financial decisions. Owners of this newsletter, its representatives, its principals, its moderators, and its members, are NOT registered as securities broker-dealers or investment advisors either with the U.S. Securities and Exchange Commission or with any securities regulatory authority.