Crypto News: SVB Collapse, USDC, ETH, SEC, Fed & MORE!

Foreign Bureau Weekly News Roundup here are the Top stories in crypto this week Crypto Market crisis usdc loses its Peg Over the weekend after Circle confirms That some of the assets backing the Stablecoin are stuck at Silicon Valley Bank where is the safest place to keep Your dried powder Ethereum uncertainty increases New York Regulators claim eth is a Security while the cftc and SEC argue Over crypto classifications will Gary Gensler do the unthinkable and go after Eth What now fed now the Crackdown on crypto And the collapse of the silvergate Exchange Network lead to speculation That the FED is preparing for its new Payment system everything you need to Know Tax the rich the Biden administration's 2024 budget includes a massive tax on Crypto mining closes a crypto tax Loophole and doubles capital gains for Rich investors how will this affect the Crypto Market Not done yet Fed chairman Jerome Powell tells U.S Politicians that the Central Bank plans On raising interest rates more Aggressively as the banking sector Implodes why the FED might not pivot Just yet

And we'll get Ben Cowan's words of Wisdom to close out the show all this And More in just a moment Good morning afternoon or evening thank You for tuning in my name is Guy this is Educational content not Financial advice And here is the news Now I'll start by saying that some of The information in this video may not be Accurate or up to date things are Changing very quickly so it's likely Something has changed by the time this Video goes live I strongly recommend joining my telegram Channel for the latest updates and the Link to that will be down in the Description So over the weekend the usdc stablecoin Lost its Peg after Circle confirmed that 3.3 billion dollars of the assets Backing usdc were stuck with Silicon Valley Bank or svb which went under last Friday this amounts to around 8 percent Of usdc's total Supply Cue Panic as holders of usdc wondered Whether the coin was still fully backed If Circle had indeed lost eight percent Of its reserves an svb depositors had to Take a haircut it would mean that it was Not fully backed as a result usdc fell To as low as 89 cents if you're Wondering why svb collapsed the short Answer is that it didn't have enough Money on hand to honor customer

Withdrawals This happened because svb had invested Most of its clients money in U.S Government debt which had lost some of Its value due to the fed's ongoing rate Hikes what's scary is that many other American banks are in a similar position To svb many of them invested their Clients Assets in otherwise safe assets But the value of these safe assets fell Significantly last year I'll be doing a deep dive into what Happened to svb later this week so be Sure to stay tuned for that Now thankfully U.S Regulators finally Got their finger out and on Sunday Evening in a joint statement by the Treasury FDIC and the FED they agreed That all depositors at svb would be made Whole they would have access to their Money on Monday morning even if their Deposits were above the 250k FDIC Insurance limit given that circle is one Of those depositors that means it will Have access to its 3.3 billion dollars Therefore usdc is again fully backed As a result usdc recovered considerably And at the time of shooting this video Is almost completely back to its Peg it Remains to be seen what exactly will Happen when U.S banks open on Monday so Be prepared for markets to potentially Be volatile And there was some other news buried in

That announcement from the treasury fed And FDIC that was that signature was Also closing its doors on the orders of Its state chartering Authority signature Was one of the last remaining banks in The U.S that served the crypto industry This is on the heels of the collapse of Silvergate just a week before more about That in our recent video on silvergate So what that effectively means is that In the space of less than a week the U.S Crypto sector has effectively been Unbanked which will have immense Consequences for the industry That's because part of the reason why Usdc was able to depeg so severely was Because Circle didn't have the ability To process stablecoin redemptions over The weekend the reason why they were no Longer able to do this was thanks to the Shutdown of the silvergate exchange Network this basically allowed crypto Companies to instantly transfer cash and Crypto 24 7 365. so this begs the Question of where the safest place is to Keep your dry powder that is your cash Well as I've mentioned many times before The only safe place to keep your money In crypto under these conditions is BTC This obviously isn't ideal because btc's Price is evidently very volatile Especially at times like this Unfortunately keeping your cash in your Bank account may not be the best idea

Either given the conditions in the Banking sector to be blunt it seems that The only truly safe haven is cash any Crypto you're not actively trading Should be kept in your Hardware Wallet Not Financial advice of course Now one component of usdc's deepegging That's been overlooked is the effects it Has on ethereum's ecosystem usdc is used In almost every single D5 protocol on Ethereum and is also held by most Dows If usdc was to go to zero or any other Stablecoin for that matter then eth's Price would suffer this fact has only Added to the already increasing Uncertainty around ethereum over the Last few weeks first it was uncertainty Around the impacts that the Shanghai Upgrade would have on eth and now There's also uncertainty that eth could Be labeled a security by U.S regulators As far as the New York attorney general Is concerned eth is a Security even Though it doesn't meet the definition Set out by the Howie test for context The Howie test states that an asset is a Security if the expectation of profit You get from investing in it is coming From an identifiable third party in each Case there is no identifiable third Party you can point to which is driving An expectation of profit this hasn't Stopped the nyag from arguing that quote Eth just like Luna and UST is a

Speculative asset that relies on the Efforts of third-party developers in Order to provide profit to the holders Of eth this comment was made in the Nyag's lawsuit against the kucoin Cryptocurrency exchange which the Regulator alleges was selling Unregistered Securities eth's price Collapsed by eight percent shortly after The press release because an official Designation as a security would mean eth Gets delisted from U.S exchanges this Would be truly unprecedented and yet It's something that the SEC has not so Subtly been pushing for for reference SEC chairman Gary Gensler said proof of Stake cryptocurrencies might be Securities on the same day as the merge He also recently stated that Bitcoin is The only crypto that's not a security Now if you watched our video about the Recent crypto crash hearing you'll know That many anti-crypto regulators and Politicians are pushing for every single Crypto to be classified as a security Including BTC this would effectively Kill the crypto industry in the USA Since every crypto would have to be Delisted Now the crypto industry has been Fighting back against this by trying to Put the commodity Futures Trading Commission or cftc in charge of crypto Trading in the country in contrast to

The SEC the cftc uses a principles-based Approach meaning it's much easier for Crypto companies and projects to comply Last week cftc chair Rustin Benham Stated that ethereum is a commodity and That the cftc therefore has jurisdiction Over eth for those who don't know the Cftc has basically been fighting with The SEC over who gets to regulate the Crypto industry on that note rostin Recently specified that stable coins Also fall within the cftc's jurisdiction Until reasonable crypto regulations are Introduced this is the polar opposite to Gary's opinion and it's clear that the SEC isn't listening recall that we're Still waiting for the SEC to officially Sue paxos over busd this begs the Question of whether the SEC will go After eth Now my gut tells me that this won't Happen unless the SEC wins its case Against Ripple That's because the SEC needs a legal Precedent if it wants to take down eth Say did you know the SEC hasn't yet lost A single case against a crypto company Now it's quite possible that ethereum Has been facing unwarranted regulatory Scrutiny because of its ability to be Used as a de facto payment Network when You combine stable coins with layer twos On ethereum what you get is a safe Secure and efficient payment system with

Near instant settlement as it so happens Using ethereum scaling Solutions with Stable coins for payments is something Ethereum Creator Vitale buteran was Talking a lot about last summer Circle was also in the process of Pivoting to payments and was developing A whole host of products to help with That such as a digital identity if you Watched our aforementioned video about Silvergate's collapse you'll know it was Also planning on launching its own Payment stablecoin it was planning on Using its powerful exchange Network to Provide 24 7 payments and had even Purchased Facebook's failed digital Currency project to that end These facts have led to lots of Speculation that the crypto Crackdown We're seeing is happening because all These payment systems are direct Competitors to the federal reserve's Upcoming fed now fast payment system FYI Fednow is expected to be released Between May and July this year If you watched yesterday's video about Central Bank digital currencies or Cbdc's you'll know that fed now is very Close to being a cbdc system all you Need to make it an actual cbdc system is To connect everyone to a digital ID and It just so happens that almost every Country is working on a digital ID Including the United States what's

Interesting about fed now is that it Will increase the risk of the kind of Bank runs we saw with svb according to Custodia bank CEO Caitlin Long the Ability to move money 24 7 means that Banks will have to hold significantly More assets on hand to make sure they Can always meet withdrawal requests this Means that smaller banks will have to be A lot more careful with who they provide Banking services to and where they Invest customer deposits in Practical Terms this means that smaller banks will Only be able to do business with wealthy Individuals and institutions and invest Only in U.S government debt in banking Terms this means that small banks will Go out of business because bigger banks Will always be able to provide better Deals in crypto terms this means that It's going to be difficult for new and Possibly even existing crypto companies And projects to get banking services in The United States But wait there's more research by the Federal Reserve and other central banks Suggests that it will be hard for Commercial Banks to stay profitable once Actual cbdcs are rolled out One way that big Banks could stay Profitable in such an environment is to Completely take over all remaining small Banks we could be at the beginning of This banking sector consolidation

Process which likely ends with all Commercial Banks going under and central Banks taking over before that happens Though the U.S government will try and Take control of crypto and get rid of Any elements that can't be controlled One of the people behind this master Plan appears to be Michael Barr the vice Chair for banking supervision at the FED Fun fact Michael wrote the law which Created the position that he now holds Michael also did a speech about crypto Last week which I'll be analyzing later This week stay tuned Now if you watched our video about Cryptocurrency and ESG you'll know that ESG investors aren't actually all that Concerned about bitcoin's environmental Impact because they know it's negligible What ESG investors are concerned about Is bitcoin's governance Bitcoin cannot Be controlled by them trying to take Down Bitcoin on governance grounds Obviously wouldn't work which is why ESG Investors and their allies continue to Focus on the next to non-existent Environmental impacts of Bitcoin mining This Focus can clearly be seen in the Biden administration's proposed budget For 2024. this budget includes a Staggering 30 percent tax on electricity Costs associated with Bitcoin mining Including off-grid electricity This means that if a Bitcoin mining

Company sets up its own electricity Source for its mining operations it will Still be charged 30 percent on the Estimated cost of the electricity let That sink in Not surprisingly the budget explicitly States that quote an excise tax on Electricity usage by digital asset Miners could reduce mining activity Along with its Associated environmental Impacts and other harms note that Literally nobody is being harmed when a Bitcoin miner uses its own wind or solar Farm The budget also includes a second Anti-crypto provision which is to Eliminate crypto tax loss harvesting tax Loss harvesting involves selling a Crypto that's at a significant loss at The end of the year declaring that loss And then buying it back at the start of The next year this lowers your overall Tax for the previous year The elimination of crypto tax loss Harvesting is expected to raise a measly 24 billion dollars to put things into Perspective the total value of the 2024 Budget is nearly seven trillion dollars The estimated tax gains from crypto tax Loss harvesting are a drop in the bucket And underscores its true anti-crypto Purpose The other controversial Provisions in The budget relate to tax changes for

Other activities namely capital gains a Capital gain is what you get when you Sell a crypto or a stock at a profit The budget proposes doubling the capital Gains tax from 20 to 40 for those making More than a million dollars per year It's worth pointing out that this tax Rate is consistent with the 40 tax rate Already levied on those making a million Dollars per year in regular income as Such it should be taken as a sign that U.S politicians are starting to become Aware that the average person is upset With the upper class Other taxes include raising corporate Taxes from 21 to 28 and raising taxes on Stock BuyBacks from one percent to four Percent in my opinion the tax on stock BuyBacks should be much higher and it Would be ideal if they were made illegal Altogether buying back stocks doesn't Help anyone but Rich investors my two SATs in any case we're likely to see Similar taxes proposed and passed in Many countries governments went Overboard with spending during the Pandemic and they are desperate to Recoup some of those losses they also Want to save face in front of the Unwashed masses who saw where most of That money went now central banks lie at The epicenter of all the pandemic Stimulus as well as most of the Concentration of wealth we've seen over

The last half century These same central banks have been Sucking money out of the system with Higher interest rates since last spring And are showing no signs of slowing down Last week fed chairman Jerome Powell Made it clear that the central bank will Continue raising interest rates for the Foreseeable future and plans on keeping Them higher for longer he also Highlighted the fact that the FED Continues to sell assets from its Balance sheet mostly U.S government debt This is significant because the selling Of U.S government debt causes its price To fall and interest rates to rise as I Mentioned earlier small banks are being Squeezed by the fact that U.S government Debt is falling in price and this effect Will be Amplified once the treasury is Allowed to issue government debt again This will only happen once the debt Ceiling has been raised which may not Happen until the summer if the debt Ceiling is not raised before the June Deadline given by the treasury the U.S Government could risk default This would cause the markets to crash And result in a downgrade of U.S Government debt more about that in the Description regardless it's likely that Banks will continue to experience Unrealized losses as long as the FED is Selling assets off its balance sheet and

These unrealized losses will again be Increased by the treasury once it's able To issue more U.S government debt this Is likely putting pressure on the FED to Hit the brakes however it's unlikely That the FED will stop raising interest Rates lower interest rates or cease Selling assets from its balance sheet Anytime soon this is simply because Inflation is still too high doing any of Those three now would result in Long-term inflation expectations going Up risking hyperinflation at the same Time unemployment is still low meaning The FED still has room to raise interest Rates before its Mandate of keeping Inflation at two percent comes into Conflict with its Mandate of keeping Unemployment at around four percent if Inflation figures for February come in Hot they will stick to their guns if You're subscribed to My Weekly Newsletter you'll know that two Inflation figures will be released this Week just in case you thought things Couldn't get any more volatile Higher than expected inflation prints Could cause the markets to crash further In anticipation of the FED pushing ahead With rate hikes whether the FED can Handle the political and social pressure That comes with pushing ahead is Anyone's guess but so long as the market For U.S government debt continues to

Function the FED doesn't care about Anything else it wants to get inflation Down to two percent come hell or high Water and it is going to hurt So with all that said let's turn to Ben Karen and see what's on his mind at the Start of what is doubtless going to be An interesting and eventful week Ben the Floor is yours Hey guy thanks for having me pleasure to Be here as always today I want to talk About Bitcoin and discuss time-based Capitulation now everyone of course is Familiar with price based capitulation It's very difficult to navigate Price-based capitulation but arguably The more difficult aspect of of crypto Is time based capitulation and we've Actually seen this play out on more than One occasion if you think about what Happened in 2014 the year following 2014 You can see that the market just sort of Chops both to the upside and the Downside and what it does when this Happens is you essentially get both Sides wrecked right you get the Bulls Wrecked and you get the Bears wrecked And and both sides feel very convinced That they're right but in reality both Sides Um just sort of get chewed up and and Spit out for an entire year we also saw A very similar thing in 2019 as well so If you sort of look at this from a sort

Of 30 000 fit view you see price based Capitulation and then time base Capitulation and then again here in 2018 Right price base capitulation and then Time base capitulation And then so arguably that's what we're Experiencing now as well we had the Price based capitulation and then time Where you don't really go anywhere you Know there's certainly battles uh by Both the Bulls and the bears but rather Than making any real Headway in either Direction you just sort of end up Chopping around for a while and of Course there was more volatility in 2019 Than there was in 2015 but at the end of The day the market did not really go Anywhere until you know after after Bitcoin's having so this was out in in 2020 is when we actually had a Relatively sustained bull run to new All-time highs and then you could say The same thing of course over here as Well in in 2016 and so you know I would Argue that right now we are still in This time based capitulation component And it's likely going to last for a Majority of this year and and this is Probably the hardest part because this Is where people get the most pathetic And and stop caring about crypto but as History shows us Bitcoin does eventually Come back Um stronger than it was before so you

Know we'll see if that of course plays Out again but I I do want people to to Be aware that the time-based Capitulation component where we you know Where we just go up and down for a year Is a is a fairly common occurrence in Crypto and I think and I will continue To think that that is what we are Experiencing right now and will continue To experience for essentially the rest Of this year but anyways guy thanks for Having me pleasure to be your as always And I'll see you again next time Thank you Ben now on Thursday Ben and I Will be hosted by Rob on digital asset News for our weekly live stream and you Can bet there is going to be a lot for Us to chew over So that'll be starting at 9 00 a.m Eastern Time 2 p.m GMT 6 PM golf time Please do stop by if you can make it And that is all for today's coin Bureau Weekly crypto review if you enjoyed it You know what to do hit that like button Subscribe button and Bell icon too If you're looking to maximize your gains During the bear Market the coin viewer Deals page is where you should go you Can find the link to that resource and Many others in the description below Thank you so much for watching and I'll See you in next week's episode