Bitcoin Policy Summit Points to Positive Regulation in Pivotal Moment
Bitcoin Policy Summit in DC combines bipartisan legislators with community leaders. As the halving approaches, it’s crucial that regulatory efforts are well-organized.
As the ETF market rallies with the next halving days away, the Bitcoin Policy Summit in Washington, DC, has displayed clear plans to influence upcoming US regulations.
The world of Bitcoin is at a pivotal moment. The next halving is estimated to take place in one week, and the international community is waiting with bated breath to see how the markets will react. There have been two different philosophies among Bitcoiners, with one side claiming that the halving will follow historical trends and lead to price spikes in the near future, and the other claiming that the rallying ETF market has already “priced in” these kinds of bullish maneuvers. As far as the data from previous halvings goes, it’s quite clear: the revenue in actual Bitcoin mined may decrease rapidly, but the value of Bitcoin will spike to new all-time highs a few months later. In other words, the revenue in dollars continually increases as the BTC amounts decline.
Still, there are certainly dissenting views on the topic, and prominent ones at that. Fred Thiel, CEO of Marathon Digital Holdings, a prominent mining firm, claimed in an April interview that “I think the ETF approval, which has been a huge success, has attracted capital into the market and essentially brought forward what could have been the price appreciation we typically would have seen three to six months post halving”. He even went on to say that he believes this will give his company an advantage, stating “as miners we are very excited to go into a halving, where for once prices have not declined prior to the halving; rather prices have gone up”, adding that “everybody is obviously maximizing to that”. The ETF market in question has only been online for around 3 months, and already its total trading volume has surpassed a whopping $200 billion.
In any event, the stakes are high all around, and that’s only considering the internal logic of the markets themselves. It’s important to remember, however, that figures like Thiel are only betting against the time-tested trend lines in Bitcoin halvings because the new ETF market has been such a hit. However, this entire market exists because the SEC gave it a stamp of approval, and that fight took years. The market may have its own considerations and logic, but regulators can interfere in a variety of ways that completely change the playing field. How would billion-dollar mining enterprises like Marathon react, for example, if regulators decided to impose a 30% tax on all mining-related electricity costs, as President Biden has proposed?
Obviously, such an event could have truly catastrophic implications for the entire US mining sector. Thiel estimated in the same interview that Marathon will need to sell BTC at $46k to remain profitable post-halving, and the price was certainly lower than that at the start of this year. Increased electricity costs would likely take a deep bite into Bitcoin’s price, and this would come at a moment when the costs of operating a mining firm are higher than ever. And that’s not even the only potential threat from the world of regulation, as representatives from the US Treasury have also testified on their new proposals to crack down on possible illicit uses for Bitcoin. One can only imagine how many toes this plan may end up stepping on. All this is to say, it’s extremely important for Bitcoiners at this pivotal moment to keep an eye on the potential outcomes of regulators. Luckily, there are plenty of people rising to meet this challenge.
In Washington, DC, the Bitcoin Policy Summit has been meeting to discuss the legislative needs of this rising industry and make sure that American government policy will accommodate its continued success. Thiel is just one of several prominent CEOs from around the community that have signed on to this forum, and they’re joined not only by various Bitcoin experts and human rights advocates but also by a bipartisan group of elected officials. Officials from both houses of Congress and both parties have expressed their enthusiasm, with Democratic Senator Kristen Gillibrand looking forward to determining “how we can write smart policy that allows for responsible innovation, has robust consumer protections, and enables us to root out bad actors," echoed by Wiley Nickel, a Congressman from the same party who is “working to find common ground and advance common sense legislation on Bitcoin and crypto”.
This is not to say that the summit is only offering platitudes, however. A series of concrete policy initiatives have been expressed, for example, when Republican Congressman Patrick McHenry highlighted two bills he has proposed, both set to clarify the government’s official definition of digital assets of all sorts. “The way I view Bitcoin is — what Satoshi brought into this world has been unstoppable,” McHenry claimed, adding that he is “trying to convince policy makers on the hill to embrace and for the United States to be leaders in [Bitcoin], rather than fall behind." McHenry stated that bipartisan support for a basic and friendly regulatory framework would provide greater clarity and re-orient policy to support Bitcoin. McHenry and the aforementioned Democratic Congressman Nickel are both members of the House Financial Services Committee, highlighting McHenry’s efforts to bring both parties in on his new framework.
Other elected representatives have also been quite proactive in their approach to pro-Bitcoin politics. Republican Senator Cythia Lummis decried Biden’s proposed tax as “so punitive it is a de facto ban”, and went on to describe the efforts to elect new Bitcoin-friendly officials. “In this administration, there are a number of high-ranking policy positions that are held by people who are threatened by Bitcoin because they know they can't control it,” she claimed, and specifically identified the Senate Banking Committee as a particular hotspot for “trying to view it [crypto] as a negative and foresee how to should regulate the negative side of it”. She pointed to several Committee members whose seats are up for re-election, and claimed that she and others are reaching out to their challengers to educate them on Bitcoin. This one committee is an active target for flipping to pro-Bitcoin or Bitcoin-neutral candidates, but she went on to list several prominent committees that are already stacked with Bitcoiners. The strategy, in other words, is long-reaching.
If nothing else, the existence of such a Summit shows that there are concerted and carefully considered efforts to influence the direction of Bitcoin policy in the near future. And it truly couldn’t come at a better time, as our efforts need to be well-organized to take advantage of a moment like this. Increasing numbers of Wall Street firms have been pouring money into the ETF market, SEC filings revealed, with a combined $15B coming in from a handful of firms. And despite this massive capital inflow, ETF issuer VanEck nevertheless claimed that 90% of its trading volume goes to retail investors. The market is heating up, and the halving could change everything overnight. Yet, even though there are a variety of outcomes that could happen, Bitcoiners should still remain optimistic: as long as we can come together, consider our situation, and prepare to push for the best outcome, there’s no reason to doubt a bright future for us all.
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The undertone of your energy has been bearish lately, but I'm not complaining! In fact, I feel like it's good for balance. I was too bullish for too long last cycle and failed to realize when the run was over. We all know the current run is far from over though ;)