#34 Expressing a View
Coinbase CEO, Brian Armstrong, expresses his view on Twitter and alternate ways you can express your view in crypto markets.
Cardano
Take a look at this chart and you’ll notice that even after the wild pull back this week Cardano’s price has managed to stay above the high it made it mid-May. Holding an old resistance as support is a show of strength. If the Cardano rally was over, the $2.5 level would have become resistance instead of a new support level. But, why is it holding support? Many believe it is in anticipation of Cardano’s smart contracts that will go live on 09/12/2021, but why do they believe this? Cardano’s smart contracts promise low fees and high through put. There are already existing, working products that fulfill this promise, Solana, Fantom, and Algorand to name a few. Then why is $95billion in marketcap sitting in ADA waiting for day one of these new smart contracts. Do investors expect all of DeFi to flood to the Cardano ecosystem when the smart contracts go live?
There is an interesting way to play this. If you go to Polymarket.com you’ll find an unique market you can buy into.
At the time of writing these market participants think there is a 95% chance that Cardano will have working smart contracts on Mainnet by October 1st.
This market will resolve to "Yes" if it is possible to create and execute functional smart contracts on the Cardano network on a “Mainnet” by the resolution date. This does not include staking functionality or consensus mechanisms. In the event of ambiguity in terms of the market outcome, the market will be resolved in good faith at the sole discretion of the Markets Integrity Committee (MIC).
Even though this market is small it gives you a more direct way to express your view than longing or shorting Cardano. You may have heard of buy the rumor sell the fact. Even if Cardano’s smart contracts launch successfully the price could go down (way down). The price may even go up if you smart contracts are not ready and working by Oct 1. If they are working by October 1st this pool gives you an easy 5% gain, and if you are certain that the contracts wont be live then this is a huge opportunity to express and capitalize on that view.
Gary Gensler and the SEC
If you want to engage in childish and sophomoric arguments about how government is bad and regulations are bad, go read pomp or something. Distrust and disdain for government scrutiny is strong among the dark-Jedi Bitcoin Maxis.
We are going to provide context around the SEC Wells Notice to Coinbase. Let’s look at who is currently running the SEC. Gary Gensler, a Goldman partner and Head of the CFTC (commodities regulation) under the Obama administration. His current position as head of the SEC will likely be the highest office Mr. Gensler holds. From a certain perspective that makes him dangerous. The elites who come and go from academia, to principal investing, to government--particularly the ones who come back to government twice, are typically focused on legacy. The risk is that in order to leave his stamp on history, he must make a bold move.
Let’s take a closer look at Gensler. Here is a screenshot of him teaching a class, a class he taught for 3 years at MIT on…blockchain technology.
Two notable things about him:
1) He describes himself as a Bitcoin maxi-centrist.
2) His number one concern is the 1.7bn unbanked citizens of the world.
It is worth taking a moment to note our global financial system is so flawed that 1,700,000,000 people across the global don’t have a reliable store of value, cannot access credit, etc. Gensler wants to improve that. Does that sound like a guy who wants to bring down crypto?
Coinbase Throws a Fit
Let’s look at Coinbase, which gives off an image of the kind of bad faith payday lender of last resort. US citizens use or used Coinbase because any decent exchange has blocked US customers. The fees on Coinbase are insane, even at an institutional level. In their recent direct listing of $COIN, they were incenting management to do nothing at all let alone improve the user experience. They then had the gall to respond to the Wells Notice on Twitter accusing the government of “sketchy behavior.” What amateur CEO goes on Twitter to trash talk the US government? Maybe the guy who has cashed out on all of his stock options at the direct listing of his company?
Moreover, those public statements, because COIN is public, have materiality. “They are refusing to offer any opinion in writing (Are they offering opinions not in writing? If so, do tell.) to the industry (Note - This CEO is not some kind of hero to crypto. He’s the guy charging abhorrent trading fees that go directly to him and Coinbase not developers working on revolutionary Crypto project.), and instead are engaging in intimidation tactics behind closed doors,” he wrote. “Whatever their theory is here, it feels like a reach/land grab vs other regulators.”
Yeah, Okay…
Gensler who could be making $5-10mm on Wall Street, but instead is working for six figures as SEC chairman. Doesn’t sound like a guy interested in a land grab. The only grabbing here is the money Coinbase takes from their customers with abnormally high fees. The other Elephant in the room is that Brian Armstrong is not a good CEO. Coinbase can just register and then launch the product “lend” which is abso-f**king-lutely a promissory note, therefore a security. Lets be clear about this, the SEC is not forcing Coinbase to remove this product. They merely want it to registered as a security.
Blockfi’s inept leadership is shilling the same narrative as well, “registering a security will kill the industry.” Crypto popped up in timeframe that feels like yesterday, and already they are shilling the language of big tobacco and big pharma? Register get over it, or shut up.
Amateurs like Blockfi and this clown Armstrong are playing office while we wait for the one guy who gets it. Sam Bankman-Fried (SBF), who, instead of shitposting about the US government on Twitter, is out buying Ledgerx, which will give crypto traders access to a whole host of legal, registered derivative products. Until such time, tune this garbage out, and if you are a shareholder of COIN you might want fire the CEO.
Exciting times are ahead, and they are coming via FTX. And you will be able to participate, if Coinbase doesn’t take all of your money in pay-day loan sized fees between now and then.
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good stuff man, thanks for sharing. refreshing to read some thoughts on SEC/regulation that go a bit deeper than the usual "gubmint bad".