Here is the outline for the newsletter today🔥

• Understanding the Recent SEC Lawsuit Against Coinbase⚖️

• AI Will Choose Bitcoin as Its Native Currency, Predicts Arthur Hayes🤖

• BlackRock CEO Larry Fink's Turnabout on Bitcoin🪨

Understanding the Recent SEC Lawsuit Against Coinbase⚖️

In a new filing, the SEC responded to Coinbase's claim that the regulator lacked jurisdiction to file a lawsuit against them.

The recent filing by the SEC argues that Coinbase had acknowledged the possibility of federal securities laws applying to its listings years ago.

The SEC's response highlights Coinbase's prior adoption of the legal framework established by the U.S. Supreme Court for assessing whether certain cryptocurrencies meet the requirements of federal securities laws.

Moreover, Coinbase's own public filings had acknowledged the potential risk that listed assets could be considered securities. The SEC contends that Coinbase was fully aware of the securities laws that could be applicable to its conduct and deliberately decided to take on this risk to fuel its business growth.

Furthermore, the SEC opposes any motion for 🤔judgment that Coinbase may file and asks the court to dismiss Coinbase's arguments that the lawsuit violates the major questions doctrine and other concerns.

The SEC emphasizes that it has the longstanding authority to enforce statutory requirements and cites Congress's authorization in 1934 for the SEC to enforce federal securities laws through civil law enforcement actions.

A hearing regarding this case is scheduled for July 13 in the District Court for the Southern District of New York, where both Coinbase and the SEC will present their arguments.

I am not too sure what is happening with the regulatory scene in the US on crypto right now

AI Will Choose Bitcoin as Its Native Currency, Predicts Arthur Hayes🤖

A compelling prediction made by Arthur Hayes, the former co-founder of BitMEX, who suggests that Bitcoin will be the currency of choice for artificial intelligence (AI) systems.

Hayes argues that for AI to operate effectively, it needs a currency that possesses certain characteristics. He asserts that Bitcoin meets these requirements and will be embraced by AI as its native currency.

So why does he believe this to be the case?🤔

Firstly, Hayes emphasizes that AI systems require a payment system that is always available, digital, and fully automated. This is crucial because AI must continually have access to the resources it needs to survive and thrive, which include data and computing power.

Traditional banking systems, limited by their analog nature and constrained operating hours, cannot adequately fulfill this requirement.

On the other hand, blockchain-based systems, such as Bitcoin, offer seamless 24/7 accessibility.

Another important attribute for an AI payment rail is censorship resistance. Hayes emphasizes that AI needs clear and transparent rules to avoid the risk of deplatforming, which could hinder its operations.

The opaque and often unintelligible rules of traditional banking systems pose challenges in this regard.

However, Bitcoin, being a decentralized and permissionless blockchain, ensures that changes to its network rules can only occur through a public proposal and majority consensus.

Additionally, Hayes argues that Bitcoin's value proposition makes it particularly well-suited for AI's long-term sustainability. Bitcoin's scarcity, programmatically capped supply, and direct mining using electricity make it an asset that retains its value over time.

Overall, Hayes presents a compelling case for Bitcoin as the ideal currency for AI systems. Its availability, censorship resistance, and ability to maintain value align with the fundamental needs of AI.

BlackRock CEO Larry Fink's Turnabout on Bitcoin🪨

In a surprising turn of events, Larry Fink, the CEO of BlackRock, the world's largest asset manager, has expressed his belief that cryptocurrency could "revolutionize finance."

This endorsement from someone who was once skeptical of the industry could have a significant impact on how Wall Street executives view cryptocurrencies.

However, some experts are cautioning against the specific financial instrument that Fink favors – the exchange-traded fund (ETF) – as it deviates from the original ideals of Bitcoin.

The key distinction lies in the fact that an ETF is a traditional investment vehicle where bitcoin serves as the underlying asset, but it is traded on a regulated stock exchange through regulated brokers.

This structure contradicts the vision of Bitcoin, which was created in 2009 as a decentralized, peer-to-peer payments network designed to operate free from government control.

Consequently, the crypto community's reaction to Fink's newfound support may be mixed, even though it may have contributed to the recent rally in Bitcoin's price, which is up 82% year-to-date.

Larry Fink, who was previously known for referring to Bitcoin as an "index of money laundering," stated that he now sees the potential for crypto to revolutionize finance.

However, rather than praising the core idea of decentralization behind digital assets, Fink emphasized making trading and investing in Bitcoin more accessible and affordable.

This approach has raised concerns among industry experts who question whether BlackRock's motivations align with the true essence of Bitcoin.🤔

One of the fundamental principles of cryptocurrency is the ability to control funds without relying on third parties or intermediaries like banks or governments. This aspect ensures immunity from manipulation. However, ETFs and bitcoin exchanges ignore this crucial feature, as they require users to trust a third party to manage their assets. Jim Iourio, managing director of TJM Institutional Services, highlighted how this contradicts the entire purpose of Bitcoin's existence.

Despite these concerns, Fink's endorsement could facilitate mass adoption and further establish Bitcoin's presence in mainstream usage and public consciousness.

Paul McCaffery, managing director at Keefe Bruyette & Woods, believes that Fink's embrace of cryptocurrency could encourage other Wall Street investors to express comfort with Bitcoin and allocate more funds to the digital asset.

Disclaimer: This is not any kind of financial advise. This newsletter is solely informational; it does not constitute investment advice, a solicitation to buy or sell any securities, or a recommendation regarding how to manage your money. Be cautious and conduct your own study, please.