Bitcoin Consultant Explains: The Surprising Upside of the Crypto Crackdown
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''Bitcoin is real 'Absolute Scarcity' = ∞/21M. The rest are just a bunch of copies of that scarcity, fighting over second place. It's ALL assets and copies - divided by 21M BTC!'' — Corey Klipstein
The sheer scale of the frauds perpetrated by players such as FTX, Three Arrows Capital, and Celsius, amongst many others, has led to a widespread crackdown on cryptocurrency exchanges and tokens. This has caused significant disruption in the market, affecting around 20,000 tokens, most of which are unregistered securities.
This article explores why this turbulent phase is actually beneficial for Bitcoin, enhancing its position as the preeminent digital asset and further strengthening the understanding that Bitcoin stands apart from everything else.
The Scope of the Crackdown
Bitcoin has been recognized as a commodity by the Commodity Futures Trading Commission (CFTC) in the United States since 2015. This classification means that Bitcoin is treated similarly to gold, oil, or other commodities.
The current regulatory actions focus sharply on crypto tokens classified as securities and cryptocurrencies like stablecoins. This includes massive delistings and a noticeable shift in public confidence, which has started to wane for many crypto exchanges and their associated cryptocurrencies.
Bitcoin's Position Amid the Crackdown
As the exchanges begin to delist crypto securities and as the public's trust diminishes, a significant amount of capital is fleeing from these volatile assets towards a more secure harbor—Bitcoin. This migration is underscored by Bitcoin's attributes; it is ethically, technically, and economically superior to its imitators. Recognized as the king of crypto assets, Bitcoin stands out as a decentralized commodity, making it an ideal candidate for global money, uncontrolled by any single entity and free from the vulnerabilities that securities face under regulatory scrutiny.
To become global money, it must be a commodity.
Bitcoin's identity as a commodity without an issuer sets it apart in the regulatory landscape. Unlike securities, which are tied to an issuing entity and subject to stringent regulatory controls, Bitcoin operates with a level of freedom that allows it to function as global money. This distinction not only shields it from certain regulatory pressures but also reduces its attack surface, enhancing its appeal as a secure investment.
Most importantly, Bitcoin was invented to remove counter-party risk. By considering the possibility of using a cryptocurrency token created by a group of teenagers as the basis for the future economy, we are regressing in understanding and education. No one can be in control of the most important form of energy humans channel.
Market Reactions and Capital Flow
The movement of capital from other cryptocurrencies to Bitcoin highlights public skepticism towards these assets. As awareness grows, more people opt for Bitcoin's reliability over less stable alternatives. Investors, cautious of the risks tied to other cryptocurrencies, increasingly favor Bitcoin, solidifying its role as the foundational asset of the crypto world. This trend underscores Bitcoin's expanding influence and cements its reputation as a safe haven amid market volatility.
The Strengthening of Bitcoin's Ecosystem
The failures of major crypto firms such as Alameda, Blockfi, and FTX have paradoxically strengthened Bitcoin. While detrimental to the broader crypto market, these collapses have emphasized Bitcoin's resilience and anti-fragility. It also highlighted an important fact: none of what happened had anything to do with Bitcoin in the slightest way.
Every single issue stems from a conflation between Bitcoin and crypto, and all the scams and frauds in the ecosystem were perpetrated by people in ''crypto'', as Bitcoiners could only stand by and try to help the people who were willing to listen.
It comes as a surprise to some that Bitcoiners called out every single scam months and years in advance. This is why Bitcoiners are often called the white cells of the ecosystem, as they try to help newcomers not fall for crypto affinity marketing scams.
The Bigger Picture: Institutional and Retail Shifts
The crackdown has significantly accelerated the adoption of Bitcoin among both institutional and retail investors. As the understanding of Bitcoin's commodity status becomes more widespread, thanks to enhanced media coverage and clear regulatory guidelines, more stakeholders are beginning to appreciate its value and distinct advantages over other crypto assets.
The media and regulatory bodies have played a pivotal role in educating the public about the nature of Bitcoin compared to other cryptocurrencies. High-profile lawsuits and regulatory actions have highlighted the risks associated with non-commodity crypto assets, thereby clarifying Bitcoin's position and fostering a deeper understanding among investors and the general public.
Why a Bitcoin-only consultant is key
If you go on Google and search for a Bitcoin consultant, you will be sorely disappointed. Speaking directly to the issue and why there is so much fraudulent activity, the whole first page of Google is filled with ''crypto consultants''.
No intelligent person who understands Bitcoin wants to be associated with crypto in any way. Why, then, would someone want to speak to a consultant who doesn't even understand this? You're supposed to have reached the pinnacle of your profession, yet you seem to lack understanding of it's most fundamental aspect.
It's like trying to find a car mechanic, but search results only show you self-taught bike mechanics. Will you get your car fixed? No. Will it likely blow up afterward? Yes.
There is no second-best
You don't settle for second best. Sovreign was born with the sole purpose of being a beacon of light for people trying to learn about Bitcoin. If you can't even find proper professionals and information on the first page of Google, what chance do you have?
If you listen to 95% of people in the ''crypto'' industry, you will be misled and most likely scammed. This is why Bitcoin Maximalism exists. It's the natural end destination for people who have put in thousands of hours of study and work to understand Bitcoin. It doesn't have to be us, but choose to work with a Bitcoin-only consultant and save yourself years of pain.
