The Crypto War is Almost Over

And there's no question as to who's going to win

Ric Edelman: It's Tuesday, June 18th. On today's show, the crypto war is almost over, and there's no longer any question as to who's gonna win. And Double VISION continues. I've been telling you about this; really excited, all 18 sessions of our big VISION conference that was held earlier this month in Austin, we've uploaded all of it to our website. So you can watch all 18 of the sessions online at your leisure. Pick the ones that are of most interest to you, including two sessions of top advisors around the country who explain how they're integrating crypto into their practices. All the videos online only through June 30. You get up to 10.5 CE credits. The link is in the show notes, just $24.99. And if you hold the CBDA designation, all the videos are free.  

Okay. So yeah, after 15 years of intense controversy, the crypto war is finally almost over and there's really no longer any question as to who's going to win. It's kind of like Normandy. You know, there was a real question at one point of who was going to win World War II. But after D-Day, it was all but over, and that's where we are now with crypto. There's been a massive change over just the last couple of months that really says it all. Let me just give you some illustrations of recent news. 

You know how people have always said historically that, oh, crypto is awful because, you know, like bitcoin's bad for the planet, all that energy consumption is just destroying the global environment. Well, guess what? Cornell now says that bitcoin mining can be paired with hydrogen to create renewable energy like solar and wind power. Their study says, quote, “Our research proposes an innovative technology solution. We can transform what was once an environmental challenge into a dynamic force for climate mitigation and sustainability.” The report says that supporting bitcoin can potentially create 78 megawatt hours of solar power for each bitcoin mined in New Mexico, and 266 megawatt hours of wind power for each bitcoin mined in Wyoming. 

The paper says, quote, “While crypto currently has a high dollar value, you can't hold it in your hand. It's virtual. Think of crypto and energy in the same way, much like a gift card concept. Crypto can also hold an energy value, and that becomes an additional function.” Unquote. The Cornell researchers also said, quote, “Coupled with green hydrogen, this approach to crypto not only mitigates its own environmental impact, but pioneers a sustainable path for renewable energy transition.” Unquote. Their work was funded by the National Science Foundation. This is the first major time you've had a government funded study endorsing bitcoin from an environmental perspective. That's a huge sea change. And it's not just the National Science Foundation that's funding research into the development of this technology, so is the US military. The United States Navy has just announced an RFP, a Request For Proposal. They are now seeking private sector partners to build its blockchain technology that it calls Paranoid. The United States Navy is Paranoid? I guess so. Paranoid, powerful authentication regime applicable to naval operational flight program integrated development. 

Paranoid, it's a blockchain based system for securing software against cyber attacks while that software is being developed and deployed. The Paranoid blockchain technology will protect software throughout its development process by verifying files across nodes at every step via blockchain. 

Every action a developer takes is registered as an entry on the Paranoid blockchain and that provides a ledger of the activity. If bad actors were to try and hijack or hack the software during the development by editing or replacing or deleting the code or files, the changes would fail to be verified against the Paranoid system's immutable database on the blockchain. Our US military is now recognizing the incredible power of crypto to improve software development and provide additional safety and security for America's secrets. That is a big change as well.  

In fact, there was a house hearing on crypto crime a couple of months ago. And guess what? This hearing, instead of bashing crypto as being used for illicit activity, like money laundering and always Jamie Dimon and Elizabeth Warren like to say, sex trafficking, this hearing focused on the advantages of crypto. 

In fact, a Democrat, Richie Torres of New York, said, quote, “Scapegoating crypto offers more instant gratification than promoting cyber hygiene.” And Michael Mosier, the former head of the Financial Crimes Enforcement Network, told the hearing that it didn't make sense to subject bitcoin miners to the Bank Secrecy Act. He said, quote, “Miners are essentially producing data and verifying data. And they're operating like any internet service provider on the internet today. They're not something that we would subject to know your customer requirements in the sense that it's just data being processed. Almost all of the illicit finance, when it involves crypto, is happening off shore.” 

That's Michael Mosier, the former head of the Financial Crimes Enforcement Network, in his testimony before the House Committee on crypto. Clearly, this is a massive change in attitude. Whereas in the past, the attitude was, crypto is bad. Now they're acknowledging, crypto is just like any other internet data provider. In fact, the SEC has been so out of step with its accusations of crypto crime and fraud, that it's astonishing what happened recently in a US court. The US District Court has sanctioned the SEC for misleading it. The SEC lawyers involved have resigned, the SEC has shut down the regional office where they worked, and the case was dismissed. 

The SEC had filed a lawsuit against a crypto company called Debt BOX, and the SEC claimed that the company was involved in a $49 million fraud. The SEC got the court to freeze the company's assets, claiming that the company had sent over $700,000 overseas to evade US law. You know, those are pretty damning accusations. But guess what? The court later found out that the SEC lawyers had made the whole thing up. In an 80-page ruling, the court-imposed sanctions on the SEC for deliberately presenting false and misleading evidence. 

The judge called the SEC's behavior, quote, “A gross abuse of power entrusted to it by Congress,” unquote, and ordered the SEC to pay Debt BOX’s legal bills, which means you and me are paying those legal bills. Yeah. It's the taxpayer who's going to foot the bill. Not Gary Gensler. You know, there's no question that the SEC has been under criticism for years ever since Gary Gensler took over as chair of the SEC several years ago. Congress has been in strong opposition to his behavior against crypto, virtually every former SEC commissioner has criticized Gary Gensler for his handling of crypto. 

The financial community is upset about it. Of course the crypto community is as well, and the financial trade press is unhappy about it. Now the courts have been blasting the SEC as well. This is only the latest rebuke. The SEC has lost almost every lawsuit it has brought against crypto communities, but this is the worst one yet. Deliberately misleading the court? Astonishing.  

There are other developments going on in the world of crypto showing some big moves. The London stock exchange has just started listing crypto exchange traded products for the very first time on the heels of us offering bitcoin ETFs here in the US. Franklin Templeton, one of the world's largest asset managers, $1.3 trillion and counting. They were the first to offer a tokenized treasury fund. That fund is now almost $400 million in assets, and Franklin Templeton just announced that they've added a new feature to this money market fund. It's the Franklin On Chain US Government Money Fund. It's a money market fund, but it operates on the blockchain. 

And the new feature that they just added? Investors are able to transfer their ownership from one person to another without any intermediary. You can transfer your shares, the money you have, with other people back and forth without having to go through a custodian, or a bank, or a broker. Accelerating the transaction, making it faster, making it cheaper, making it safer. 

It's a huge market. Franklin's fund is $400 million. The total tokenized treasury market is now well over a billion. That's a 10x increase in just one year. And it's going to get a lot bigger really fast. Stripe, in fact, is now letting businesses accept crypto. Of course, when you do a transaction, with a local merchant, odds are pretty good they're using Stripe. And they're going to begin with the USDC stablecoin. Other crypto coins aren't going to be far behind.  

And check this news that just came out yesterday, the company that owns T-Mobile says they're going to start mining bitcoin. Deutsche Telekom, they're the largest telecom company in Europe, they own T-Mobile, and they've announced just yesterday that T-Mobile is going to be mining bitcoin. 

They're also going to operate validator nodes for Ethereum, Polygon, and Chainlink. You think the other telecoms around the world are going to sit on the sidelines and let T-Mobile have this all to themselves? This is a huge indication of the mainstreaming of crypto.  

Yeah, the crypto war is almost over. So what does it mean for the price of bitcoin? Well, the latest prediction comes from Jack Dorsey. He's the guy who co-founded Twitter. And he just said that bitcoin could hit a million dollars and beyond by 2030. Bitcoin right now is under $70,000, he's talking about it clearing a million in just five years. 

He called bitcoin, quote, “a fascinating ecosystem and movement. Anyone who works on it, or gets paid in it, or buys it for themselves, everyone who puts any effort to make it better is making the entire ecosystem better, which makes the price go up.” That's Jack Dorsey. He's not the only one with a new bitcoin price prediction. 

Bernstein, a major asset manager with $725 billion in assets says bitcoin's price could hit $200,000. Next year. That would be a 300% increase, and it'll hit a million by 2033. Even public pension plans are getting in on this. The state of Wisconsin just disclosed that their state pension plan for state and county workers has bought $160 million worth of bitcoin via the Blackrock spot bitcoin ETF. All told, nearly a thousand institutional investors have disclosed that they now own bitcoin. 

See these institutional investors have to disclose to the SEC every quarter, what their holdings are. It's called filing a 13-F, and this 13-F document discloses the investments they've made and the assets they hold. This is true for everybody with a hundred million dollars or more. And there were 922 institutional investors that filed a 13-F in the first three months of this year, disclosing that they now own bitcoin. 

The expectation is that there's a whole lot more than 922, but they have less than a hundred million. So they didn't have to file, but those that filed, nearly a thousand of them representing $10.7 billion worth of bitcoin purchases in just the first three months of the year.  

Let me just give you 82 of the 922, you tell me how many of these names you know and I'm going to give you this list in alphabetical order: Acorn, Apollo, Arbor Capital, ARC, Bank of America, Bank of Montreal, Bank of New York Mellon, Barclays, Beacon Point, Bessemer, Blackrock, Blair William, Brown Advisory, Brown Brothers Harriman, Buckingham, Cambridge, Cantor Fitzgerald, Cap Trust, Satara, Chevy Chase Trust, Private Wealth, Citadel, Colony Group, Commonwealth, Cohen, Creative Planning, Crescent, Investnet, Equitable, Evercore, Fiduciary Trust, Fifth Third, First United, Fortress Investment Group, Greenwich Wealth, Hightower, Invesco, Jane Street, Janie Montgomery Scott, JPMorgan Chase, Kestra, Lazard, LPL, Mariner, Mass Mutual, Mercer, Missouri Trust, Morgan Stanley, Moss Adams, National Bank of Canada, Northern Trust, Northwestern Mutual, One Capital, Park Avenue, Plant Moran, PNC, Raymond James, Ritholtz Wealth, Royal Bank of Canada, Sageview, Sandy Spring Bank, Schoenfeld, Sequoia, State of Wisconsin Investment Board, Stifel, Susquehanna, Thriving Financial for Lutherans, Titleist Asset Management, Toronto Dominion Bank, Truist Financial, Trust Company of Vermont, UBS, United Capital, US Bank Corp., Wealth Enhancement Group, Wealthspire Advisors, Wedbush Securities, Wellington, Wells Fargo, and Western Pacific. How many of those names did you recognize? Institutional investors across the country are buying bitcoin. Why would they be doing that unless they thought this was a good investment opportunity? 

Crypto wars are almost over. There is no question who's going to win. Are you going to be among the winners? That's the question for you to decide for yourself, for your clients. You need to learn about this. You need to engage. A great way to start, watch some of the videos of the sessions we recorded at VISION earlier this month. The latest cutting-edge news and developments in the crypto space. Check it out online. The link is in the show notes. And we're off tomorrow, so our team can honor Juneteenth. We'll see you again on Thursday. 

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Ric Edelman: I’m glad you’re with me here on The Truth About Your Future. Ric Edelman here. If you like what you're hearing, be sure to follow and subscribe to the show, wherever you get your podcasts, Apple, Spotify, YouTube – and remember leave a review on Apple podcasts. I read them all! Never miss an episode of The Truth About Your Future. Follow and subscribe on your favorite podcast app. 

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