Will The Market Dump? ( SPY QQQ )

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Market On Open, Wednesday 18 March

by Alex King, CEO, Cestrian Capital Research, Inc.

Whilst everyone is looking at oil, the SEC and CFTC published their positioning paper on digital assets. This is not yet law, but it is a clear signal of what the SEC intends to become law. The SEC’s positioning is, in my view, eminently sensible. It neither has its head in the sand, desirous of banning anything crypto-related, and nor has it drunk the Kool-Aid laced with OG crypto memes.

The SEC & CFTC Provide Clarity On Crypto

The SEC and CFTC’s position is extremely sensible in my view. In short:

• Digital Commodities - eg. Bitcoin, Ether - not securities but commodities..
• Digital Collectibles - eg. NFTs - neither securities nor commodities - unregulated.
• Stablecoins - will be governed by the GENIUS Act ie. they have their own regulatory environment.
• Digital Securities - eg. tokenized stocks - securities. Not all tokens are securities, but tokenized securities are all securities.

You can read their press release and associated documents here.

This is a very simple and clear framework which if passed into law by the Clarity Act ought to mean increased participation in crypto in all its forms. It’s a big deal which so far appears to be underappreciated. I think it’s bullish for Bitcoin, Ether and for tokenization in general - which itself is bullish for Ether since most tokenized systems run on the Ethereum database. And look for an explosion in alternative trading venues using tokenized securities.

Now let’s dig into the market at large.