Perhaps the currency of the Bitcoin is currently stable, and we do not know how the future situation on the whole thank you for sharing❤

It'll be interesting to see if the SEC looks to retroactively enforce ICO regulation against many of the early companies that held public sales in the US. That would certainly be a massive worry for any token holders and something most people aren't discussing in to much depth.

Certainly possible but I think these bearish scenarios are pretty unlikely anytime soon, especially given the resource limitations (hiring freezes and budget restraints) that both leaders and many Senators stipulated throughout the hearing.

I see the biggest takeaways as the hyperfocus on fraudsters and Ponzi schemers — which we should be rooting for if we’d like to see more casual investors enter the space.

As an EU resident I've never even watched a hearing for my own country. Let alone a US senate hearing. But now I must have seen it three times already haha I watched it a few days ago and then a bunch of videos like this one to see what other people make of it. And I never thought I'd enjoy checking out a senate hearing, obviously biased here haha.

It's funny a year ago I never thought I'd even be interested in this  let alone know what they are talking about now when I read the stocks news just because I learned about crypto.
I always wanted to learn how the whole stock market worked but it was always too daunting but now because of crypto I got a basic understanding and I'm more engaged in the financial sector which I absolutely never expected.

All the stuff they wanted to regulate is all positive in my opinion. ICO's and exchanges are nothing but problematic right now.  They are by far the biggest sources of lost funds for customers due to hacks, scams, project failuers, etc.

The things I am more concerned about them bringing more heavy regulation on:

* Being able to use Bitcoin as a means of exchange and as a replacement currency.
* What businesses can accept Bitcoin and what extra procedures you need to follow to spend Bitcoin as cash.
* Banks refusing transactions to facilitate fiat transactions to and from cryptocurrency.
* General crypto trading including unregulated exchanges as well as regulated traditional exchanges through ETF's and futures derivatives.
* User privacy and tracking how much crypto everyone owns and who they transact with.
* Taxes
* Mining

Since I don't participate in ICO's and I already agree that we need heavier regulation on these exchanges the meeting didn't really give me a whole lot to go on.  Until they start discussing those topics above I am not really that interested.

I agree that the analysis by various Crypto YouTubers was too positive.   The same can be said about their reactions to some of the recent FUD stories - where the reported stories were maybe not that bad but they  still had some cause for concern (e.g. India government comments on Bitcoin and Crypto).  

By the way, are you still Bullish on Bitcoin or do you finally think that we are in a bear market?

@cryptovestor can you go into more detail what labeling ICOs as securities would mean for the ability of american investors to get involved? I haven't connected those dots yet.

Given what just happened with Bit Grail, I think it's written on the wall now that exchanges need to be regulated. There's only so much you can do as an investor to protect yourself. 

Crypto is slowly entering into the phase of Wild West. We now have Whales trying to blow up entire projects (Bulwark). I have no idea how you can protect your assets from stuff like that.

I think it is funny, how everybody talks about how great blockchain is and that they want their country to be leading in blockchain technology. But on the same note, they think Bitcoin and Altcoins are useless and should be banned.
1. A blockchain doesnt work without a tangible coin or token, because there would be nothing too lose to attack the blockchain. Therefore there would be no trust or not more than those of a fractinal reserve central bank system.
2. ICOs and the hype around it provide plenty of easy funding for a lot of ideas. A lot will fail, but some will succeed. And traditional fundings wouldnt given so many projects a chance.

What do I take from it? I believe it is true, that they all want to be leading in blockchain technology. However this works only with decentralized solutions and a tangible asset like a coin or token which can be traded for real money. If they overregulate it in the US, business will move to more friendly environments like Japan, Singapore, Switzland or the EU. And if this happens, they might adjust their approach to regulation.

I do hope for "crypto securities", because I dont think todays security laws could effectively regulate this industry without killing the development in that country. Regarding short term prices, going down the wrong lane, would be certainly not good for prices.

It does seem like the general market was expecting a much more negative reaction, and the release of the statements a day before(on Reddit) colored the narrative. Right now people have some idea on their mind of scam ICOs that will be hit with this and believe that the project that *they* back will not be because *it* is 100% legit. The effect will really be felt with once some more specific information is given, or action is taken.

Perception is everything.

So who will be responsible for Bitcoin to do all the regulatory paper work? Satoshi Nakamoto?

CI,
I love how Senator Menendez (D) says  "my sense of crypto currency are largely driven to evade US sanctions & to undermine sovereign curriencies."
Really?
Lets list the countries where crypto currency has replaced its sovereign currency or undermined it.
.
.
.
Bueller?
As you see ...none.
Hell the US government held an auction selling Bitcoin just recently (late Jan)
In reality this why i keep saying....2020.
That's my timeline for when heavy regulatory actions will be taken on this market...this is the start of hyperbole to "save" investors.
Enjoy your time now investing & playing in this wild west market.
Soon enough...it will be like investing in OTC markets.

Now am i against regulation?
In some aspects i do believe it's quite needed especially in regards to ICOS.
(Tezos,Prodeum,OneCoin,Confido...even recently Populous seems to be under alot of scrutiny...rightfully so (look up the posts regarding it here on steemit))

And this isn't including scams Like BitConnect,DavorCoin. 
MT Gox...even BitGrail as well hasn't escaped people's minds..
The shady aspect of this market scares people...even though very few of the population has invested in it yet.

Notice the word...Yet.

I do think people will move in to this market once the correction in the Stock market continues this year.
Cheap BTC?
Cheap alts?
The Dumb money is going to move in stronger soon enough...and once when it crashes yet again.

The drums of regulation will beat louder ...


Excellent video as always.

Govts will always do what is in its best interest, the word decentralization itself is something that opposes a govt institution, so my thoughts were almost the same when i first heard it. Thanks for that clarifying video for those people who thought the Senate hearing, was as good they thought it was.

Awesome video. I totally agree. These people where posturing and playing to the audience, looking to sound tempered and thoughtful. They want control. They will do anything in their power to control the crypto space, and if they can’t control it, they will try to destroy it.

A great reminder  for [crypto market] participants  that "The Authorities" do not know how to accommodate the paradigm shift of bitcoin, block chain, AI, even Anarcho-capitalism.

I use the term - accommodate - advisedly, as IMHO ultimately this will be the end result.  This may take many years; perhaps much turmoil will ensue; maybe revolution is a suitable descriptor?

History is in the making. 


Worldwide, anecdotal evidence suggests "Authorities" initial response is to:-  prohibit ICO's, shut down exchanges and enforce KYC rules ostensibly to protect the public.

Of course, the hidden agenda may well be digital control, surveillance, and to prevent loss of tax revenue that the modern State must have to prop up  debt based fiat regimes.

Indeed,  a great time to be a participant and observer.

Centralize the decentralized... LOL

Thank you for bringing in the broader perspective and a bit more sober analysis. It is actually rather entertaining (if the stakes weren't so high) to watch the economic power structures (and the politicians in their service) try to walk the line between _excitement_ about the potential to exploit crypto-possibilities for  competitive advantage and _fear_ over the promise of crypto-disruption of their centralized market power. Its noteworthy that the leverage points they are exploring are not on the crypto-currency per se, but on the boundary between fiat and crypto-currencies (exchanges and ICO's). Would you agree that such regulatory leverage points pose a greater threat to currencies, like Bitcoin, whose primary utility is as a _store of value_? IMHO, Bitcoin's aspirations as a _medium of exchange_ have evaporated under the weight of its scalability challenges. Pure crypto-economies, where rich and varied value exchange can be accomplished ever leaving the crypto-currencies (which _may_ be possible for Steem if its adoption grows, given its feeless transaction model), may be more immune to these types of regulatory pressures.

Great content as always. Thanks!

I'm interested in seeing how they distinguish which ICOs are securites and otherwise. Some tokens represent ownership of a company and some are utility tokens where the value will supposedly lie in their use on the platform/product. If they classify utility tokens as securities and impose strict regulations on their purchase and usage, they could inhibit the development in this space before we even get a true understanding of the value of these tokens.

What are your thoughts on this?

The SEC should spend its time re-evaluating short volatility products like XIV and leave this space alone!

I See this Upcoming ICO Regulation a BIG PLUS for PILLAR / PLR . Their Wallet will SOLVE this Problem, IMHO. They are already working on this I believe.  Thanks for your take on things.

You still holding NAV? Looks like it's waking up!😃 As long as BTC holds up... And no bad news.

I personally see this hearing as the starting points for a major discourse amongst the policy maker not only in US but all over the world. 

In Malaysia, our Central Banks takes a neutral stand and say that the market should decide the fate of cryptocurrency but their full stand on that matter would be not disclosed until the end of this month in their paper work (until now they would not ban it, but also would not consider it as legal tender.. but as of now, ICO is still a no go here.. meaning they have enormous tapes and fences of legal n policy that one must pass.)

http://telegra.ph/BNM-Kertas-Konsep-Mengenai-Mata-Wang-Digital-Akan-Dimuktamadkan-Bulan-Ini-02-12

In Malaysia due to the reason of not having any  cryptocurrency exchange based here, (like Bitrrex based in US), we dont have the discussion like what is happening in US.. 

I do hope more constructive discussion can be made.. I do see a trend nowadays that many ICO n alts coins are doing airdrop, dividend like n thus under SEC definition is categorized under Security.. I am really interested to follow up the on going discussion regarding this, as whatever SEC decide might well be used as a case study and implement in various countries thus having huge ripple accross the globe.

Thank you for this discussion of the hearing. I always like to listen to your opinion, which I think is unbiased by BTC bull mentality.

@cryptovestor Do you foresee tokens skipping the ICO phase and launching their tokens without raising capital? 
In my perspective, this could be a possibility if regulations become too stringent for ICOs and if everyday people are not able to invest in projects. 
If tokens withhold raising capital upfront and provide an efficient product with a use case, then the market will work its magic and boost token prices up over time. In the short run, they operate at a major loss, but in the long run they gain by leveraging a locked up amount of tokens reserved for the team and future investments. In my opinion, I believe the community would be ok with the token team selling their reserve stock of coins to earn some fiat for their hardwork. However, the team selling their tokens may have a slight negative effect on market prices since more tokens are in circulation afterwards.  
The only example I can think of right now is the Earnable token where users get paid in ERN token for completing certain tasks which have different dollar amounts to them. Earn currently pays users in BTC to complete tasks but they're launching their own token soon to replace BTC under their service. 
You can learn more about them on earn.com by reading their white paper.
Although Earn is taking a very different approach to how their tokens operate, I see skipping the ICO phase as a viable option if regulation comes down too hard. 
Furthermore, if cryptocurrencies are truly supposed to be decentralized and for the average Joe, we could see this happen. 
Just my thoughts, what do you think?

I felt Clayton was very anti crypto during the hearing, and at times also seemed uncomfortable with the subject. Perhaps this from Wikipedia explains where his loyalties lie

"Clayton disclosed to the United States Office of Government Ethics that his clients have included Deutsche Bank, UBS, Volkswagen, SoftBank Group, The Weinstein Company, Reid Hoffman, Paul Tudor Jones, Ocwen’s leader, as well as both Pershing Square Capital Management and Valeant Pharmaceuticals.

Clayton earned $7.6 million a year from his firm and has a family wealth of at least $50 million, with his wealth management entrusted to Apollo Global Management, Bain Capital, J.C. Flowers & Co., and Richard C. Perry"
https://en.wikipedia.org/wiki/Jay_Clayton_(attorney)

Seems to very much be a Wall Street man

When those men says "regulating" the real meaning is: How can we take complete control and make the most of it. 

One of my best friends wife works for Itau, the biggest bank here in Brazil. They have a whole sector dedicated to cryptocurrencies BUT funny thing, their "crypto staff" is 80% of lawyers and regulators with just a few programmers.  

Cryptos were meant to "cut out the middleman" but the middleman is about to take over!

It is unclear to me why treating ICO's as "securities" and wanting to enforce higher security standards for exchanges would be a "negative" for Bitcoin / cryptocurrencies.

With regards to securities I know neither what they are or what they mean for regulation. Since you come from the world of traditional finance you probably have a much better understanding of this than 99% of your audience so it would be much appreciated if you could focus on this topic in a future post.

With regards to exchanges it is obvious that their security has not been good enough in many cases (either that or their alleged hackings have fraudulently been conducted by themselves). Enforcing higher security standards on them is absolutely necessary.

At some point I would hope to see an end to centralized exchanges since they really pose one of the biggest liabilities for cryptocurrencies right now. Here's to hoping upcoming decentralized exchanges can enable better security and further democratize trading of cryptos.

Do you think bitcoin price action already adjusted to "real" content of this hearing?