Huge News Week for Bitcoin
Joe Biden, Ted Cruz, Gemini, and more
Biden Veto a Blow to Crypto Self-custody
President Biden on Friday vetoed a bill that would have allowed banks to keep custody of cryptocurrencies. Banks, that are already highly regulated.
And it was a bipartisan bill. How refreshing.
It even passed both the House and the Senate. The House by 279 - 136. The Senate by 60 - 38.
The bill would have overturned an SEC guidance provision that essentially prohibits bank from keeping custody of crypto for its customers.
The Securities and Exchange Commission (SEC) had enacted the regulation, called SAB 121, and required that a reporting entity that performs crypto asset custodial activities record a liability with a corresponding asset. It also requires disclosure of the nature and amount of crypto assets the reporting entity is responsible for safeguarding for its customers.
In short, it was an anti-crypto ruling passed by Gary Gensler’s SEC in 2022.
There is hope in both houses of Congress that the veto could still be overridden.
Sen. Ted Cruz is Mining Bitcoin
US Sen. Ted Cruz (R-TX), a long-time proponent of cryptocurrency technology, has announced that he has taken the plunge into Bitcoin mining. Cruz announced on X that he had purchased three Bitcoin miners and fired them up on Friday, May 31.
Texas has been recognized as a potential hot spot for Bitcoin mining due to its abundant supply of renewable energy, mainly solar power. Cruz didn’t disclose if he was using renewable energy or not.
Cruz is bullish on Bitcoin mining’s ability to help stabilize the Texas energy grid, as described here in a Forbes article:
“Bitcoin miners are able to monetize the excess capacity that would go to waste on an average day, but that capacity can be curtailed in seconds, releasing the energy back to the grid when needed.” - Forbes.
“It's essentially an emergency reservoir of power. I think that's one of the tools we can utilize to enhance resiliency in the grid,” Cruz said in an interview.
NOTE - (from a CPA here) - Senator, the Bitcoin that you mine are taxable, when mined, not when you sell. Hire a crypto CPA!
Gemini Returns 97% of Crypto Assets; Breaks 18-month Uncertainty
The Winklevoss twins came through.
It was a long, hard fight, but Gemini Earn customers last week received 97% of their assets that had been frozen for the last year and a half. The assets had been tied up as part of the bankruptcy and reorganization proceedings of Genesis Capital and its related entities.
Gemini Earn customers had faced great uncertainty as to whether they would get back the cash value they had invested, the actual coins (in-kind) or perhaps nothing at all.
They received their coins in-kind. That was the best part.
When the assets were frozen, in November 2022, Bitcoin’s price was hovering around $16,000 per coin. With prices recently topping $70,000 customers would certainly prefer to get the actual coins back, not just the dollars they invested in 2022 and prior.
And that’s what they got back, 97% of their actual assets, so far, with the rest expected to be distributed soon. Cameron, Tyler and their legal team fought all along to get back the crypto assets that had been pledged as collateral in the Genesis matter. The assets totaled around $2 billion.
And they won. A big victory for Gemini, and even bigger for the customers.
Oh, and it’s believed that the twins kicked in around $50 million of their own funds as part off the settlement. Kudos.
Bitcoin Price is Up 152% in a year. How’s your portfolio?
“Strong, to quite strong,” - Greg Focker, in Meet the Parents.
Well, most people’s portfolios should be strong, at this time. Markets have performed well of late. The Dow Jones Industrials are up five thousand points in the last year, a double-digit percentage return. The more volatile NASDAQ index is up even more.
Investors, over the last four decades, have done very well indeed, even without Bitcoin. Going forward, who knows?
Investment giant Fidelity, which now offers a spot Bitcoin ETF to its clients, issued this statement, regarding the risk/reward ratio of a small Bitcoin allocation:
“Our analysis suggests portfolio allocations of 2%–5% could have an outsized positive impact in an optimistic adoption scenario, allowing annual retirement spending to increase 1%–4%, while limiting the loss to annual retirement income to less than 1% if bitcoin were to lose all its value.” - Fidelity Investments.
Bitcoin Tools, Platforms, Podcasts:
Twitter (X) - Follow The Bitcoin Files on Twitter at @BitcoinNewslet1 for all of my articles, commentary and links to my contributions to Bitcoin Magazine.
Medium - Check out my writings on Medium, including articles not featured in the newsletter. Join my over 700 other followers who read and write about crypto. medium.com/@rickmulvey
Podcasts - To hear the top names in Bitcoin, and learn more than you could imagine, check out The Pomp Podcast with Anthony Pompliano, What Bitcoin Did with Peter McCormack, and The Wolf of All Streets Podcast with Scott Melker.
Issue No. 137, June 3, 2024
Rick Mulvey is a CPA, crypto consultant, and frequent contributor to Bitcoin Magazine. He writes about all things Bitcoin, and yells at the Yankees and Giants. He also runs marathons and makes wine, neither professionally.