Bitcoin price spike
- Bitcoin is not a security (confirmed)
- Ethereum is not a security (new)
- it is an investment of money
- in a common enterprise
- with a reasonable expectation of profit
- based on the efforts of others
There are also some strange comments in there, for example airdrops could be considered securities. Even though by definition people do not invest money in airdrops. The SEC is hedging its bets here in case one of these airdrop tokens really takes off and starts making money.
In any event, we can take from this that the SEC isn’t leaving this alone and must be investing significant resources in this space. Long term it has to be a positive sign, even so, if you are considering launching an ICO – don’t do it in America.
Andreessen Horowitz, the 10-year-old venture capital firm is morphing into a registered investment advisor, renouncing its status as a VC firm. This will mean the full horror of compliance audits and expensive training for about 150 staff. Why would anyone do such a thing?
Well, one reason might be they are currently restricted as a VC to hold no more than 20% of their money in assets that are liquid securities, such as cryptocurrencies. The SEC, quite correctly, considers them high risk investments.
a16z is one of the biggest investors in crypto, for example they were an early investor in Coinbase. Their announcement did not say this, so this is simple speculation, but it wouldn’t surprise at all if they were making this change so they can double down in this sector.
These organisations are typically interested in transacting in highly controlled, centralised enterprise blockchains (also known as databases), adoption of individual central bank digital currencies (CBDCs) won’t necessarily drive growth in cryptocurrency. More importantly though, this is a key indicator of the awareness that Central Banks have of these nascent currencies. Readers of Saifedean Ammous’s “The Bitcoin Standard” will know that only one of these CBs has to recognise the virtues of Bitcoin as a reserve asset for the rest to follow.
“Should one of these countries announce the replacement of even a small amount of reserve assets with bitcoin, the impact on Bitcoin’s price would likely be massive and that small portion would grow into a not-so-small portion. Other countries could follow suit in an attempt to replicate the first country’s success; the likely effect would be a significant drop in the value of national currencies used as international reserve assets, as each central bank scrambles to sell some of its international reserve currencies for the quickly appreciating bitcoin to back their own currencies and preserve their value.”
The fact of the matter is, why would anyone want the Fed’s crypto-dollar anymore than they would a paper dollar?