House fails to override veto of SEC crypto guidance, and probe into Stacks ends: CNBC Crypto World

House fails to override veto of SEC crypto guidance, and probe into Stacks ends: CNBC Crypto World

today Bitcoin stretches back above the $58,000 mark As we close out the week the house fails to override President Biden’s veto of a bill that would end controversial SEC guidance and Bill bar height of digital Asset Services firm Aubra lays out what he thinks is keeping Bitcoin stuck below 60k welcome to cnbc’s crypto world I’m Jordan Smith crypto prices slightly in the green to cap off the week filled with the release of economic data and testimony from Fred Cher J on Capitol Hill as of newon Eastern Bitcoin reclaimed the $58,000 level ether climbed just under half a per holding steady above $3,100 and salana maintained the $138 level for the week Bitcoin is up more than 2.2% and ether is up 4.5% outpacing the S&P 500 as of noon Eastern all right let’s talk about the top stories the House of Representatives failed to override President Biden’s veto of a bill that would end the sec’s controversial staff accounting bulletin 121 as a quick refresher when he vetoed the bill back in May President Biden said his administration would not support any measures that would quote jeopardize the well-being of consumers and investors well weeks after President Biden vetoed the bill passed by both chambers of Congress the legislation was back on Capitol Hill this week where lawmakers needed a veto proof majority a 2third vote for to pass once again but the House vote on whether to override the bill failed on Thursday with 27 Republicans and 21 Democrats voting yes that failure means the accounting policy remains in effect given the turnout fell well short of the 2/3 vote needed next the Securities and Exchange Commission ended its three-year investigation into Bitcoin layer 2 Stax and the development platform hero the SEC began its investigation into the two entities a couple of years ago after sta launched its first token offering when a new version of the layer 2 hit the main net and that’s according to Stack’s co-creator manuali in this 2021 SEC filing the company said it was no longer providing essential managerial services to the stacks blockchain and therefore it was no longer necess necessary to treat the tokens as Securities now today’s filing announcing the investigation’s end includes an email attachment from the SEC from earlier this week saying the agency has concluded the investigation as to the stacks blockchain and that it does not intend to recommend an enforcement action against hero hero said in a blog post today that quote for the past three plus years we’ve diligently complied with the requests for information and worked to explain how the sax network works and what Hero’s role in it is Hero’s post also argued the importance of creating a clear regulatory framework in the US and the closing of the stacks investigation gives hope for a bright future for Bitcoin and the next generation of the internet last chainalysis just published its first money laundering report exploring Trends and behaviors in crypto AML the 30-page report shows that since 2019 nearly $100 billion in funds have been sent from known illicit wallets to conversion Services the blockchain data platform says the value of elicit flows to Bridges has increased steadily over time with a pronounced surge in listed value starting in late 2023 with close to $234 million in illegal inflows recorded in January of this year that’s the highest value to date which chain analysis says is largely driven by funds flowing from crypto mixer tornado cash to Bridges the report also highlights the role of technology and innovation in moneya laundering prevention noting that data analysis quote plays a crucial role in identifying and neutralizing the most pressing threats in the crypto ecosystem where a single wallet address can illuminate a vast net work of criminal abuse the report goes on to say that by leveraging advanced technology managing compliance and investing in education the crypto ecosystem can achieve a sustainable and secure framework that protects against illicit activities all right let’s jump back to markets for our main story despite this week’s gains both Bitcoin and ether are in the red for the month of July so far to find out more on why I spoke with Bill barhight of Aubra a global platform for digital asset Prime services and wealth management all right Bill thank you for being here I I to start with just your reaction to where we are with prices you know a lot of people we spoke to on crypto world have said that after the having investors should be prepared for a few lagging months before we see new highs and you know Bitcoin is down six and a half percent so far this month ether’s down about 8% um just walk me through how you’re looking at the crypto market right now sure as it relates to to bitcoin and macro uh I think there’s three things that matter right now the first is is that uh coming into uh 200 23 we really saw bottoming in global liquidity and it’s really what happens at the margins that matters if you understand macro and so that trough really led to a great year in 23 uh as liquidity increased as there was growing excitement for uh potentially at the end of the year the ETFs um and you know just general excitement for what happens you know in the having cycle so so that all played out right and then coming into 23 we probably had I’m sorry coming into 24 I think we had kind of a temporary Peak uh given interest rates in in global liquidity uh combined with uh an offset on the ETF uh which um I think was more successful even than people had imagined and people underestimated the tax implications for people withdrawing from grayscale and so uh the fact that that those redemptions didn’t happen and the inflows were there kind of offset the kind of peak in in liquidity and then the third part the third part is is the traditional having cycle and there the most important point and this is still playing out because you know we’ve such short-term memories in crypto but the having just happened and traditionally what happens is there’s a reset among miners hash rate pulls back miners can’t afford to mine they they’re forced to sell remember they’re they’re earning explicitly half of what they used to earn for and sometimes more work given the Euphoria around the the ETFs which actually had more miners coming online that’s causing a pullback now in hash rate I think that the hash rate is about to trough if it hasn’t already which usually signals the bottom post having and and that’s great news because this is a smaller pullback than what we’ve seen on a relative basis in other post having Cycles so that’s combined with the fact that the macro picture says we’re seeing a significantly softening economy says liquidity has troughed hash rate has troughed liquidity is about to increase and I don’t think there’s going to be more miners coming offline and we’re still under the mining price meaning it costs 50 and change 50k and change to mine a block uh and they’re earning more than that so so that’s good news right so so all of this reports to a really interesting second half of the year to me where I I expect to see risk on assets uh appreciates uh significantly and Bitcoin has always been kind of a lever bet on risk on assets anyway in terms of sucking up that liquidity yeah I’m curious about that conversation around interest rates in the macro environment I mean in recent days we had the inflation data come out that lends Credence to this idea that the FED would start cutting rates later this year but um how much do you think that that conversation still plays into crypto if at all because I mean for for so long investors in the crypto space were watching the fed and then for for a while it felt like all eyes were off um you feel like that that actually matters again it it does but but at the end of the day you know crypto has created too many Couch Potato macro uh analysts that don’t really understand Cycles in detail right so you got to look at the PMI you got to look at interest rates you got to look at Global liquidity what’s China doing what’s Japan doing with their traditional year yield curve control uh you know activities and when you play all of that out we have to refinance you know hundreds of billions of dollars worth of debt at much higher rates and if we don’t get those rates down uh via something like yield curve control or something else we have a big structural problem so all that basically points to the fact that we’re going to have more liquidity in the system we’re going to have more money Printing and if we don’t it’s going to be a disaster and we’re not willing to take the pain that it would take for that not to happen which would be you know massive Cost Cuts across the board in the west and that’s not going to happen so so and unless there’s something structural that breaks we’re in for significant significant either quantitative easing or whatever they’re going to BS they’re going to call it the next cycle I want to shift gears to um something that happened earlier this month Abra launched a treasury service at the beginning of Ju aimed at companies wanting to hold Bitcoin on their balance sheets um we talked a lot on crypto world in the past about institutional adoption but I want to hear from you about where we are on that front and how the companies you’re speaking to feel about crypto right now yeah so so it’s really been an interesting cycle because we’re seeing kind of post what’s happened with micro strategy a whole bunch of particularly midcap companies um even nonprofits come to us and say hey look we saw your announcement about your new registered investment advisor separately managed accounts separately managed account basically in English means that you retain title to your assets so all the shenanigans that happened with the Celsius blockb voyagers whatever can happen because you’re not on my balance sheet and they love that model for holding crypto and so they said okay I’ve seen the stock appreciation for micro strategy because they’ve effectively you know put uh Bitcoin on their balance sheet and that cash is always discounted to zero right markets traditionally discount cash in your bance sheet to zero right because it’s a depreciating asset but if you replace that with an appreciating asset and and what happens to be the the apex predator as as Michael calls it of appreciating assets now all of a sudden they don’t get discounted to zero it gets a a a bump and a bonus uh for for being on your balance sheet and so we’ve seen several midcap public companies stock get a a huge bump overnight 20 30 40% by by replacing the cash with Bitcoin that’s point one point two is we’ve even seen nonprofits now we have a couple in our system that have started to convert treasury into Bitcoin and they intend to hold that forever if they can and actually borrow against the Bitcoin right so they can fund their operations by borrowing a depreciating asset against the value of an appreciating asset and I I foresee a lot of midcaps nonprofits uh doing this and you’re going to see significant increas increases in their stock value uh for those companies that have you know nine maybe low 10 figures in uh of dollars in their treasury that’s effectively being discounted either to zero or significantly is now going to see a significant increase in its value because they’re going to convert it to bitcoin all right that’s all for crypto world this week we’ll be back on Monday and we’ll see you then

CNBC Crypto World features the latest news and daily trading updates from the digital currency markets and provides viewers with a look at what’s ahead with high-profile interviews, explainers, and unique stories from the ever-changing crypto industry. On today’s show, Bill Barhydt, founder and CEO of Abra, a global platform for digital asset prime services and wealth management, weighs in on why the price of bitcoin has been stuck below $60,000.

Chapters:
00:00 – CNBC Crypto World, July 12, 2024
0:24 – Bitcoin rises
0:50 – The headlines
3:58 – Bill Barhydt of Abra

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House fails to override veto of SEC crypto guidance, and probe into Stacks ends: CNBC Crypto World