Bitcoin's Sweet 16!

Oct 31, 2024

Happy Halloween and happy 16th birthday to Bitcoin! Today marks 16 years since the Bitcoin white paper was released in 2008. On January 3rd, 2009, the Bitcoin blockchain officially went live, with the first transaction following on January 12th, 2009. If you haven’t read the white paper, today is a great day to check it out. It’s a quick read, around 2,000 words, but it’s packed with insights that laid the groundwork for the entire crypto revolution. Now, let’s get into today’s news.

Coinbase’s $25 Million PAC Push and What It Means for Crypto

Coinbase announced it’s committing $25 million to its political action committee, Fair Shake PAC. This super PAC is focused on backing pro-crypto policies in the United States and is backed by Coinbase’s CEO, Brian Armstrong, alongside other industry giants like Ripple Labs and Andreessen Horowitz. With funds now preparing to target the 2026 midterms, the PAC aims to support candidates favorable to crypto, ensuring the industry’s interests are represented in the regulatory arena. Armstrong emphasized the urgent need for regulatory progress and voiced optimism that Congress will become more open to crypto-friendly legislation.

This raises an interesting question about super PACs and their role in shaping policy. On one hand, this effort is about survival for crypto businesses: it’s well-documented that money in politics heavily influences legislation. In fact, 95% of all congressional seats go to the candidate with the most funding. Without contributions, industries like crypto risk having their concerns ignored or actively opposed by regulators. However, this also shines a light on the downside of political influence in the U.S., where industries effectively need to “pay to play” to secure favorable treatment.

It’s noteworthy that other industries have been playing this game for a long time. For example, PACs supporting sectors like finance, healthcare, and energy pour billions into campaigns, with PACs like Senate Leadership Fund and Make America Great Again Action spending hundreds of millions each. So, if crypto wants to survive—and thrive—playing the PAC game is almost a requirement.

Canary Capital’s Bid for a Spot Solana ETF

Canary Capital is entering the race to offer a Spot Solana ETF, submitting a registration with the SEC. The ETF aims to provide investors direct exposure to Solana, following the model of recent Bitcoin and Ethereum ETFs. However, the SEC has historically referred to Solana as a security, adding layers of complexity to this application. Canary Capital argues that Solana functions similarly to Bitcoin and Ethereum, so it should be treated accordingly.

The question is, will this application succeed? With the SEC’s reputation for scrutiny over anything related to crypto and its classification as a security, the odds are uncertain. However, if approved, a Spot Solana ETF would be a milestone, indicating that crypto assets beyond Bitcoin and Ethereum can achieve a level of regulatory acceptance. This would expand investment opportunities and bring more traditional investors into the crypto space, which could be bullish for Solana in the long term.

FTX Exec Nishad Singh Receives Time Served

Former FTX engineering head Nishad Singh was sentenced to time served for his involvement in the FTX fraud case, despite revelations that he knew about the misuse of customer funds. Singh’s limited role and cooperation with prosecutors helped him avoid further time behind bars, unlike Caroline Ellison, who received a two-year sentence. Singh was reportedly disturbed by Sam Bankman-Fried’s extravagant spending but stayed at FTX, fearing that leaving might trigger the company’s collapse.

While Judge Lewis Kaplan acknowledged Singh’s cooperation and lesser role compared to others, the outcome feels like a slap on the wrist for someone who was part of a multi-billion-dollar fraud operation. The fact that Singh, who joined Alameda in 2017 and only recently left crypto, was unaware of the issues seems hard to believe. The real question is whether Singh’s leniency is warranted or if it’s just another example of selective justice, especially when regular individuals face prison time for far less.

It’s frustrating to see key players avoid significant repercussions while the face of FTX, Sam Bankman-Fried, gets 25 years. This uneven sentencing adds to a growing list of cases where corporate insiders face minimal consequences, leaving victims and investors with little closure.

MicroStrategy’s Ambitious 21-21 Plan for Bitcoin

MicroStrategy unveiled its new 21-21 Plan to raise $42 billion over three years, aiming to fund additional Bitcoin purchases. The plan involves $21 billion each in equity and fixed-income securities, continuing the company’s strategy of using Bitcoin as its primary reserve asset. MicroStrategy currently holds 252,220 Bitcoin, valued at approximately $16 billion. However, while Bitcoin performance is strong, MicroStrategy’s third-quarter financials showed $116 million in revenue, missing projections by about 5% and reporting an operating loss of $432.6 million.

MicroStrategy’s 21-21 plan shows how deeply committed the company is to Bitcoin, but it’s not without risks. The company’s shares dipped 8% in after-hours trading, highlighting concerns over its dependency on Bitcoin’s performance. For investors, the plan is a double-edged sword: Bitcoin’s value must continue to rise for this strategy to succeed. While the plan reflects confidence in Bitcoin’s future, it also serves as a reminder that MicroStrategy’s fate is increasingly tied to Bitcoin’s market volatility.

Bitcoin ETF Inflows Surge

Yesterday, Bitcoin ETFs saw $870 million in net inflows, bringing year-to-date totals to a staggering $23 billion. This spike is believed to be election-related, with investors anticipating a pro-crypto shift in policy if Donald Trump wins. Platforms like Polymarket show Trump leading in betting markets, with many speculating his stance on crypto could positively impact Bitcoin prices.

Expect massive volatility in the crypto market come election night. The real-time nature of crypto means that as polling results come in, we could see 10-20% price swings. With both candidates, Trump and Harris, indicating they would be favorable to the industry, the market is poised for a shake-up regardless of who wins. This election could set the tone for crypto regulation and adoption in the next few years, making it one of the most anticipated events for crypto markets.

Bitcoin Prices

Bitcoin: $71,612, down slightly but still riding high.
Ethereum: $2,612, down 2.5%.
Binance: $585, down 1.6%.
Solana: $173, down 1%.
XRP: $0.516, down 0.7%.
Dogecoin: $0.167, down 0.5%.
Tron: $0.169, up 0.8%.

Total Market Cap: $2.41 trillion, with Bitcoin accounting for $1.41 trillion and Ethereum $314.2 billion.

Remember, I’ll be off on Monday through Wednesday next week. Until next time, happy hodling!