MARKET UPDATE: The Crypto U.S Regulators Hearing Takes a 'Do No Harm' Approach on Crypto &am




★ SEC & CFTC Senate hearing on Cryptocurrencies took a net bullish tone on US Stance - Christopher Giancarlo, Chairman, U.S. CFTC said during the meeting that his own niece HODLs

★ SpaceX Flacon Heavy Launched beautifully

★ Market Update Below: SPY, QQQ & How The Stock Market May Be Poised for Larger Correction

ELON MUSK'S FALCON HEAVY LAUNCH

Today SpaceX's Falcon Heavy launched a legendary event with a near perfect outcome as 2 boosters landing a bulls eyes on their "land"ing pads - the middle booster unfortunately missed target on it's ocean drone ship by 300 ft


​This is the most cheer-inspiring launch I've ever seen. You can watch a replay of today's live stream here


Falcon Heavy is the most powerful operational rocket in the world by a factor of two. With the ability to lift into orbit nearly 64 metric tons (141,000 lb) – a mass greater than a 737 jetliner loaded with passengers, crew, luggage and fuel

The cherry on top was that the Falcon Heavy was dually the most expensive car commercial. The rocket carried a playful payload: Mr. Musk’s red Roadster, an electric sports car built by Tesla. Strapped inside the car is a mannequin wearing one of SpaceX’s spacesuits. They are expected to orbit the sun for hundreds of millions of years. You can view the live stream of SpaceMan in orbit here:


“It’s kind of silly and fun, but silly and fun things are important,” Mr. Musk said.

CRYPTOCURRENCY SENATE HEARING WITH THE SEC & CFTC WAS NET BULLISH

The 2 super heros in our government happen to be seated as the The Honorable Jay Clayton, Chairman, U.S. SEC (Securities and Exchange Commission); and The Honorable J. Christopher Giancarlo, Chairman, U.S. CFTC (Commodity Futures Trading Commission).

And this Tuesday morning was the Senate Cryptocurrency hearing was with the SEC, CFTC (Commodity Futures Trading Commission to discuss a very wide range of all things Bitcoin, cryptocurrency trading, & ICOs. I am very bullish on the entire tone of how the hearing & I think we can draw enough evidence from the meeting notes alone that America is in support of blockchain expression & growth. That's not to say with a carte blanche attitude...but overall the meeting was very bullish.


"We must crack down hard on those who abuse our young enthusiasm for bitcoin and blockchain technology"

"We owe it to this new generation, to respect their interest in this new technology with a thoughtful regulatory approach." - Christopher Giancarlo, Chairman, U.S. CFTC



The chairman of the U.S. Commodity Futures Trading Commission (CFTC) has spoken of the need for a balance and a "do no harm" approach when regulating cryptocurrencies. In a written testimony presented to the Senate Banking Committee today, J. Christopher Giancarlo said that in this "new digital era" for the financial markets, cryptocurrencies have brought "paradigm shift" in how the world views payments and financial processes, and that ignoring such innovation:

"will not make them go away, nor is it a responsible regulatory response." 'Do no harm' was unquestionably the right approach to development of the Internet. Similarly, I believe that 'do no harm' is the right overarching approach for distributed ledger technology. ... With the proper balance of sound policy, regulatory oversight and private sector innovation, new technologies will allow American markets to evolve in responsible ways and continue to grow our economy and increase prosperity."

I've watched the entire hearing from start to finish and in gist, the outcome is net bullish from what we can extrapolate. Nothing is set in stone on their official stance, but the comments from both Jay Clayton, Chairman of the SEC & Christopher Giancarlo, Chairman, U.S. CFTC (Commodity Futures Trading Commission) were equally supportive of cryptocurrencies and very diplomatically cautioned about taking a hard-line approach. Rather, the tone that was remarked spoke highly of the space, culture & the technology as revolutionary. You can watch the entire hearing in the clip below. It's lengthy & definitely worth the watch... but below are some of the highlighted cliff notes:


  1. SEC Chairman's referred to his kids ...that they were not interested in stocks but are hooked onto cryptocurrencies...made mention that the government ought to respect their children's generational interests & aspirations .... encouraged the Senate to develop a positive outlook.

  2. Acknowledged the issue that scams & fraudsters must be cracked down but in a way that allows for the general crypto space to be allowed to develop & flourish. A working group of SEC, FINCEN, CFTC and other group members are working on identifying scams in this space.

  3. When asked if Crypto has any "intrinsic value"? - There is an intrinsic value and relation of the value of bitcoin and the cost of mining it.

  4. Bitcoin & cryptocurrencies growing market cap was discussed ...there was a tone of concern from one side of the senate that seemed threatened by how to wrangle in on the space with regulation if it gets too big.... referenced in comparison: global money supply is 7.6T....and since Bitcoin has been compared to digital gold, value of all gold in the world is 8T.

  5. Special moment of amusement & another win for Crypto, Christopher Giancarlo, Chairman, U.S. CFTC just mentioned that his niece "HODLs"


In the middle of all this Senator Brown was constantly bashing banks, a topic un-related to all the discussion. Apparently banks have had 80+ violations in the recent months.

  • # of times drug dealing mentioned in the proceedings: 0

  • # of times terrorism mentioned in the proceedings 4 - Venezuela, Petrocoin, and Russia Cryptorouble (and North Korea) were discussed - they were seen as ways these countries could use crypto assets to skirt US sanctions. Though the SEC chair addressed that there was not much they could do, but are working with Feds and the Treasury.

  • "Illegal transactions" was discussed, and the steps taken to combat misuse of crypto.

STOCK MARKET UPDATE - FEBRUARY 5, 2018

The root cause of recent market volatility lies somewhere between debt and Jay Powell. From a fundamental perspective, debt has become a market moving variable. By now you should be well versed in the specifics. China’s downgrade of United States paper combined with the launch of petroyuan has international investors worried about demand for the dollar at a time when Trump’s administration is attempting to increase issuance of debt. A weakening dollar acts as a hidden tax to global investors. Think about it from the perspective of the Swiss National Bank, why would they continue to hold overvalued U.S. stocks if both the dollar and stock market are dropping? It’s a double whammy loser. And why would they hold U.S. stocks knowing the Fed is unwinding its balance sheet of treasury securities and mortgage backed securities at a rate of $420 billion in 2018 and $600 billion in 2019? And why would any international investor buy U.S. real estate, stocks or bonds knowing that interest rates have to rise in order to counterbalance a dropping dollar? This is a similar environment that caused the panic of 1987 which led to the creation of the president’s plunge protection team in 1988. Not exactly a precedent of confidence.

All-of-a-sudden currency is of paramount importance. The dollar has actually been stable over the last week even as the stock market behaves violently. Since Thursday the UUP is up from $23.13 to $23.42. At this stage of the game, dollar stability should warrant a return to calm markets. Whereas dollar weakness could potentially cause a market crash. The same is true of the 10-year yield. If it can find stability between 2.8% and 2.9% then we should be able to return to calm markets. Such stability may be difficult if Congress fails to reach a debt ceiling deal by its deadline on Thursday night. This isn’t a good time to be sending a message of fiscal irresponsibility to the rest of the world. Could a prolonged government shutdown be the catalyst for correction? Absolutely. On CNBC Carl Icahn warned that this week’s stock action could just be a tremor before the big one. He’s worried about something on the scale of 1929 that jumpstarted the Great Depression. If the dollar keeps dropping and international demand for treasuries disappears, then Icahn’s dire warning will likely materialize. De-dollarization represents a disruptive tectonic shift for global financial markets.

Concerning Jay Powell, there’s a chance he is less prone to market manipulation than his predecessor Janet Yellen. If this is true, we could be in for a painful phase as manipulated markets adjust back to being free markets. Over the next few months it would be important for a market manipulator to stabilize the dollar and 10-year yield. What if Powell is unwilling to intervene with Fed helicopter money? Time will tell.

After yesterday’s Dow 1100 point drop, today’s 567 point bounce does little to assure us that the bull market is ready to resume. This is now day #7 of a new market environment that’s focused on the dollar and debt.

BONUS PERSPECTIVE:



Some of the greatest pearls shared by Jesse Livermore:

“Money is made by sitting, not trading.”

“The desire for constant action irrespective of underlying conditions is responsible for many losses in Wall Street even among the professionals, who feel that they must take home some money everyday, as though they were working for regular wages.”

“Buy right, sit tight.”

“Nobody can catch all the fluctuations.”

“There is a time for all things, but I didn’t know it. And that is precisely what beats so many men in Wall Street who are very far from being in the main sucker class. There is the plain fool, who does the wrong thing at all times everywhere, but there is the Wall Street fool, who thinks he must trade all the time. Not many can always have adequate reasons for buying and selling stocks daily – or sufficient knowledge to make his play an intelligent play.”

“It takes time to make money.”

“Don’t give me timing, give me time.”

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