The Breakdown

The conversation about whether bitcoin is a safe haven asset continues in the wake of Iranian missile strikes, which saw the price of BTC both surge and retrace in parallel with crude and gold. To help explain what’s going on, we feature comments from Ikigai Asset Management’s Travis Kling. 

Also in today’s episode, we look at newly published priorities from the SEC around crypto including investor suitability, trading practices, and compliance program effectiveness. We also discuss former Bakkt CEO and now Georgia Senator Kelly Loeffler’s appointment to the committee that oversees the CFTC. Is it a conflict of interest, something good for the crypto industry, or both?

In their annual transparency report, Kraken reported seeing a 50% increase in regulatory inquiries as compared to 2018, which CEO Jesse Powell later revealed cost the exchange more than $1m. Between this and stories like the $2m it cost Blockstack to raise $23m in an SEC compliant token sale (8.7% of the raise), it begs the question: will compliance costs fundamentally limit innovation by demanding big war chests to play? Will the most successful companies be those who (like Block One) simply raise enough to pay off the regulators on the back end? 

We also look at new mining interests in Texas and what it means for Amiercan mining and bitcoin mining in the lead up to the halving more broadly, as well as dissect an op-ed from the IMF’s chief economist on the strength of the dollar over digital alternatives.

Last week, the US government took out a key Iranian military leader. As the world - and the markets - reacts to the news, some are asking what happens with bitcoin. With global instability on the rise, will more people turn to bitcoin as a safe haven asset? Will speculators drive the price up on that narrative even if it doesn’t bear out in reality? If Iranians use crypto, will that draw the attention and ire of regulators? 

In a different area of the industry, Telegram has released updated information about their forthcoming crypto token TON. Most notable was the bombshell that the token would not be integrated into Telegram Messenger - which was, of course, the predominant logic behind the more than $1.7B that was invested in the TON presale. 

Finally, we discuss the dust up around Nakamoto.com, a new crypto journal that was almost immediately accused of affinity scamming and censorship. Is it a case of overzealous bitcoin defenders or does the critique hold merit? 

The past few weeks have seen multiple instances of large, centralized tech giants censoring crypto related content and activity. Noticed in the context of the Coinbase Wallet, Apple is pushing back against apps that have anything to do with Dapps. YouTube caused even more of a stir when it took down hundreds of crypto-related videos from prominent influencers without any warning. It later reversed the action, claiming an error, but it was enough to get many to ask: are decentralized alternatives possible? 

As if on cue, Justin Sun popped up to announce that TRON had struck a deal through which decentralized Twitch competitor and streaming service DLive would be moving to the TRON Blockchain and integrating with BitTorrent’s BLive streaming service. For many, however, TRON’s involvement makes DLive more likely to end up a centralized tool than a disruptive decentralized social network alternative. 

Taylor Monahan is the founder and CEO of MyCrypto. In this interview as part of The Breakdown’s end of year coverage, she argues that the level of discourse in crypto matured in 2019, with more focus on things that actually matter. That’s important, because in 2020, she predicts a major fork-in-the-road moment, where the industry as a whole could either stay on the path set out in its cypherpunk roots, or be significantly co-opted and corrupted by the entrace of corporate and government actors into the space.