Slow Monday this side and thought it'd be a nice time to deliver my less-and-less read crypto update.
Markets have recently seen roughly 20% correction since the bull run recommenced about two months back. September is historically a poor month for crypto and generally a good month to buy.
However, this market pullback has an interesting underlying story to it. I'll try to briefly elaborate.
Bitcoin officially became legal tender in El Salvador on the 7th of September 2021.
On the very same day, Bitcoin saw a large pullback of 15%.
The SEC's timing(exactly as Bitcoin became legal tender in El Salvador) of their threat to sue Coinbase is understood by the majority of the crypto community to have been specifically engineered to rain on the parade of what was, despite their best efforts, a historic day for cryptocurrencies.
A little on that - Coinbase had decided to offer a lending service, not something new to the crypto industry and also a practice already engaged in by a plethora of companies within the crypto space. For some reason, the SEC is unhappy about this and despite Coinbase privately, publically and upon countless occasions requesting clarity on the SEC's position...there has been zero said clarity offered to date. "We're gonna sue you," is about all the SEC are willing to say. Its fine to earn 4% a year from a bank but not when it has anything to do with crypto assets through Coinbase. Here is a tweet string from Coinbase's man-in-charge laying out the situation. I'd urge you to read it if this topic interests you.
Armstrong on the SEC and its ketchy moves
Perhaps that doesn't seem like a big deal but keep in mind that legislation through litigation is only ever supposed to be a final option and used once all other avenues have been exhaustively explored. The timing of the SEC's thinly veiled threat against the US's market-leading crypto exchange, being right on the eve of El Salvador making Bitcoin legal tender, doesn't require a bloodhound, or even a nose, to smell a rat.
There was one bit of recent news that sums up the situation very clearly. CBS, over the last few days ran a story that opined on how Western Union(an international money transferring service) was going to lose $400 million a year due to El Salvador so "irresponsibly" making Bitcoin legal tender. El Salvador, a country with a GDP that is largely imported from nationals working abroad and sending money home to relatives still within El Salvador, deciding to cut out Western Union from skimming 15% off the top of transfers, is apparently a bad thing.
According to CBS, that $400 million a year is better off being in the pockets of Western Union and its shareholders than in the hands of poor El Salvadorians doing their best to put food on the table. Funny game these guys are playing huh? They support socialism until a technology offers social benefits that political socialism can't. Suddenly the distribution of wealth is "irresponsible". Transparent scumbaggery is probably the most apt term.
Is it at all surprising then that the SEC would do their best to hold the status quo of the current financial system right where it is in the face of DeFi(Decentralised Finance built on top of Blockchain technology)? DeFi has barnstormed the financial system and is threatening to give users higher gains, more financial freedom and greater control over their assets with exponentially less reliance on the ever greedy middlemen of the baking cartels. One is hardpressed to find an avenue where legacy banking is able to compete...and the old system knows this.
Make no mistake, there will be politicians, media outlets and others coming out so very strongly against crypto technologies and platforms and it has nothing to do with it being bad for people. Rather, it has everything to do with it disrupting the archaic, mismanaged, and actually irresponsible financial practices that too long benefited the few to the detriment of the many.
Meanwhile...an unabated influx of institutional money keeps flowing into the crypto. To the point where it's becoming almost impossible to keep track of everyone getting involved. Retail involvement is also growing at unstoppable rates and these days everyone has either heard of crypto or is already involved.
I look forward to watching the possessed banking system squirm in the coming years as digital holy water is poured over it.