(Any views expressed below are the personal views of the author and should not form the basis for making investment decisions, nor be construed as a recommendation or advice to engage in investment transactions.)
Morning folks,
I’ll keep this one brief. I was actually planning to take the day off because I wasn’t feeling particularly creative, but between CLARITY failing to advance and the Fed hiking rates, I couldn’t help myself. Not exactly the week Washington was hoping for. Let’s get into it.
On Tuesday, the Senate failed to advance the CLARITY Act. With us building out Satstreet USA, the wait for a broader US regulatory framework hits particularly close to home. There’s been plenty of enthusiasm about America becoming the best place in the world to build in crypto. It would be nice to see that enthusiasm survive a vote.
Instead, what we got was honestly a reminder of why I own bitcoin in the first place. I watched some of the debate leading up to Tuesday’s vote, and I’m not sure what I was expecting, but it was not that. These are the people we’re waiting on to help shape the future of this industry?
Here’s a taste:
Watching these horrendous takes, I understood why prediction markets had the odds of passage around 10%. The immaturity and incompetence on display actually had me wondering whether it’s better that CLARITY didn’t pass. We need clear rules, but do we really want these dusty old bureaucrats and banksters shaping the future of an ecosystem built in spite of them?
Meanwhile, look at the US 10-year below. These folks have enough problems with the financial system they already oversee. Bitcoin emerged out of the global financial crisis as an alternative to trusting that system, which makes all this waiting around for Washington’s approval a little absurd.
The last time this happened 👆 someone decided to invent Bitcoin.
Now onto the Fed. The hike was widely expected, but I thought there was a case for Bitcoin reacting well to it. An outcome that’s bad for borrowers doesn’t automatically mean another sell-off if traders have already positioned for it. That was the thinking behind this:
That tweet didn’t get much love. Still figuring out X. My thinking was that an expected hike might be easier for the market to digest than a surprise. But Bitcoin’s strength also had me wondering whether traders were positioning for a hold, in which case even that could become a sell-the-news event. Either way, I wasn’t treating the rate decision alone as an obvious buy or sell signal.
Well, we got the hike. Now I’m more interested in how Trump responds to a Fed that isn’t giving him what he wants. I don’t see him becoming more patient as November gets closer.
Then I watched JD Vance at the All-In Summit asking for another chance in November. Maybe I’m being harsh, but it felt like they were already preparing us for disappointment. Asking voters for another two years is a tough pitch when they’re still waiting for the results you promised the first time.
I can only imagine Trump’s reaction: “Another chance, JD? You’re the Vice President. You sound like you’re trying to get your ex back. Terrible.”
Imagine trying to sell that heading into November. You promised a stronger economy and a better deal for ordinary people, and now borrowing costs are moving in the wrong direction. There may be a perfectly reasonable economic explanation, but someone trying to buy a house isn’t voting on the quality of your explanation. They want to know when they can afford the house.
My view is that Trump doubles down from here. More pressure to bring manufacturing home, more pressure for lower borrowing costs, and an aggressive push for a weaker dollar to make American production more competitive. Whatever happens in November, I expect him to spend the next two years pressing that agenda as hard as he can. An election setback would make him more impatient, not less.
I don’t know how much of that he gets, but I’m not betting my savings on Washington suddenly discovering fiscal discipline. I’m more bullish than ever on owning money they can’t print, and this week did nothing to change that. They can keep arguing over the rules. I’ll keep buying more bitcoin.
Have a great weekend,
Mike