It’s been an interesting past few days in the crypto-world. The BitMex and BitMart exchanges have both recently announced they’re winding down. There are now reports of frozen withdrawals on BitMart—which is unfortunate—but a good reminder not to leave coins on exchanges. There aren’t very many of us who haven't been touched by similar catastrophes.
Exchange closures have, historically, been bottom (or close to bottom) signals in past market cycles but this time feels different. US lawmakers keep fumbling and punting the Clarity Act back and forth, making last minute changes/provisions and voicing concerns. It actually seems like it might pass this time but nothing is guaranteed. The owners of these exchanges might realize the bill is likely to pass too and this could be the reason for the abrupt closure announcements.
There are really only five centralized exchanges left that do business in the US—Coinbase, Kraken, BitStamp, Gemini, and Crypto.com. That’s crazy when you consider there were nearly four hundred exchanges open for business in 2018.
Not passing some clear crypto legislation at this point could be disastrous for the US as the rest of the world will be better positioned to reap the benefits of the next bull market. As usual, the hesitation to pass the bill seems to come from a place of fear/greed and desire for stricter control disguised as consumer protection. As with many aspects of the US government this is yet another shining example of why we so desperately need age and term limits in government. I’m not even convinced a lot of these lawmakers fully understand the details and impact of what they’re voting on—they’re merely taking the stance their constituents tell them to.
More and more large financial institutions are jumping on the bandwagon to back the Clarity Act. However, Jamie Dimon of Chase Bank is one of the most vocal opponents citing concerns over interest yielding stable coins threatening the traditional financial system. A handful of other big banks are withholding their support as well, just not as vocally.
Will the Clarity Act be good for individual investors? The version of the bill that finally passes probably won’t be, entirely. Surely there will be pros and cons. I’d argue the lack of clear regulation is equally as harmful. Stagnation and indecision is how the US gets left behind.
Everything in life changes. As much as I wish otherwise, it’s becoming increasingly apparent that the old idealistic, Wild West days of crypto are gone. The Cypherpunk narrative is fading with each year and Bitcoin now finds itself in the institutional asset class. I miss many aspects of the old days but I’m grateful I had the opportunity to experience them. I was later to the party than some, being first introduced to crypto in 2016, but the stories and experiences we had during those years will be what we think about as the late-autumn of our life approaches and we’re in our rocking chairs.
What I do know is we were part of something that was, and still is, pretty freaking amazing. We all believed we were going to change the world—and I guess in ways we did—if only for a while. I have to smile at the realization that there was a time when nerds (and I use that term lovingly) gave the titans of the financial world a run for their money.
What’s next for crypto? As we inch ever closer to the singularity, the answer to that question is probably things we can’t even imagine. I think the larger coins survive, stable coins will be utilized for payments and cross-border transfers, and a few alt coins (with real utility) will survive. Let’s make sure Hive is amongst them. Oh and no matter how this particular chapter unfolds, the future still belongs to the nerds. : )
(Gif sourced from Giphy.com)
All for now. Make this a wonderful day.
