Bits + Bips: Who Wins If the GENIUS Act Passes, and Is Bitcoin’s Rally Over? - Ep. 869
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🎯 Summary
Bits + Bips: Who Wins If the GENIUS Act Passes, and Is Bitcoin’s Rally Over? - Ep. 869: Comprehensive Summary
This episode of Bits + Bips, featuring host Steve Erlich and guests Ram Alavalia and Austin Campbell (High Scholar of Zero Knowledge Consulting), provided a deep dive into the current explosive Bitcoin rally, the underlying macro environment, and the potential impact of significant pending US crypto legislation, particularly the Clarity Act (often referred to in the context of stablecoins).
1. Focus Area
The discussion centered on the collision of cryptocurrency markets (specifically Bitcoin and stablecoins) and macroeconomics/policy. Key themes included the drivers of Bitcoin’s recent price surge, the decoupling from traditional risk assets, the implications of proposed US legislation, and the evolving role of Bitcoin as a global, liquid asset in a volatile macro landscape.
2. Key Technical Insights
- Bitcoin’s Skewed Return Profile: Bitcoin is highlighted as a high positive skew asset, meaning the majority of its significant gains occur on a very small number of trading days per year. This suggests that for most participants, the optimal strategy is “buy and forget” rather than attempting to time the market.
- CPI Data Reliability: Austin Campbell noted that current CPI figures might be less reliable due to staffing shortages in government estimation, suggesting traders should focus on longer-term (three to six-month) moving averages for meaningful economic signals.
- Comparative Valuation: To truly understand Bitcoin’s strength, participants should look at its price relative to other assets (like gold) and in non-USD terms (e.g., BTC/EUR), rather than just USD price action alone.
3. Market/Investment Angle
- Rally Driver: The current Bitcoin rally is attributed less to immediate fundamentals and more to a short squeeze (targeting figures like Jim Chanos), positive seasonality, and Bitcoin’s unique dual role as both a risk asset and a safe haven.
- Macro Decoupling: The market appears to be experiencing a decoupling where Bitcoin is acting as a haven against macro craziness (e.g., potential tariff impacts, uncertain CPI prints) rather than strictly correlating with traditional risk assets.
- Trading vs. Holding: There was a slight divergence on strategy, with one host suggesting Bitcoin is better “traded” due to its volatility, while others strongly advocated for a “buy and hold” strategy given the high probability of missing the few crucial up-days.
4. Notable Companies/People
- Jim Chanos: Mentioned as a prominent short-seller of Bitcoin and MicroStrategy, currently being squeezed by the rally.
- Katie Stockton (Fairfield): Provided a long-term price estimate for Bitcoin ($168k by end of next year).
- Central Banks/IMF: Discussed the slow but steady rotation out of US Dollar reserves, which provides a long-term tailwind for assets like gold, potentially dragging Bitcoin along.
- Bitcoin Miners (Marathon, Bit Digital): Noted as an under-followed sector that has struggled economically but is seeing renewed interest due to the price surge. Innovation in mining (e.g., using stranded natural gas via companies like Limit) was mentioned.
5. Regulatory/Policy Discussion
The discussion focused heavily on “Crypto Week” in Washington D.C. and three key bills:
- Clarity Act (Stablecoins): Considered the most likely to pass. Austin Campbell argued its passage would create significant winners and losers.
- Losers: Non-financial companies (Meta, Amazon) attempting to launch stablecoins, as the bill restricts issuance to entities primarily engaged in financial business (akin to the inverse of the Bank Holding Company Act). Small, bundled banks may also lose out as stablecoins offer superior deposit products.
- Winners: Consumers (getting better deposit yields), and large banks (which have the scale to manage stablecoin assets and Treasury collateral).
- Digital Asset Market Clarity Act: Ranked as having a lower probability of passing than the Clarity Act.
- Anti-CBDC Surveillance State Act: Considered unlikely to pass due to definitional issues and lack of clear purpose.
6. Future Implications
The conversation suggests a future where:
- Stablecoin regulation will solidify the role of established financial players in the digital dollar ecosystem, potentially limiting Big Tech’s entry.
- Bitcoin’s role as a global, tariff-immune, liquid safe haven will continue to attract long-term accumulation, even if short-term price action remains speculative and volatile.
- The market will continue to be driven by liquidity profiles and long-term demand rather than short-term economic data theater (like CPI).
7. Target Audience
This episode is highly valuable for Crypto/Web3 Professionals, Institutional Investors, and Macro Strategists who need to understand the interplay between regulatory developments, global macro trends, and digital asset valuation.
🏢 Companies Mentioned
Coin Center
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organization
NASDAQ
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exchange
A-Coin
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project
BMI
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institution
Base
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layer_1
BNY Mellon
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institution
Wells Fargo
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institution
BofA
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institution
Fairfield
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Investment/Research
Grayscale
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Institution/Asset Manager
Coin
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Exchange
Galaxy
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Investment/Financial Services
Jack Henry
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unknown
Because I
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unknown
Apple Pay
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unknown
💬 Key Insights
"Is the brand strong now, just given all the issues they had around Genesis and the discounting of fees and the allegations of self-dealing, and the New York Attorney General accused them, the parent company, of coming fraught?"
"It's almost, in a way, kind of funny because they're sort of like the sacrificial lamb for all of crypto. They made all this possible by suing the SEC so they can convert GBTC into an ETF."
"Going into public markets for Grayscale seems to be a recipe to IPO, have the IPO pop because we're in crypto, sort of, you know, high phase, have it tank after that, and then end up getting acquired by somebody very cheaply, and that person will be the ultimate winner here because they'll just be adding a diversified thing to a larger platform."
"If you got a disclosure of conflicts of interest, you know, what are the vesting schedules? How do you know insiders aren't selling or dumping, or VCs? How do you know you're not providing liquidity to parties that are checking out? So, those are all areas that need to get worked out."
"If you believe Pump.fun is the future, crypto will fail, and token prices should be way, way lower than they currently are, right? I just want to be clear with people about that."
"The big innovation here, the real innovation is in on-chain equity issuance, and that's going to be interesting to see, assuming we can keep our heads on our shoulders and insist on certain amounts of disclosures."
📊 Topics
#artificialintelligence
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#investment
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🎯 Action Items
generically
investigation