 Welcome to Jalassa News or Dan for Short. My name is Rob. And today we're going to talk about the positives as far as crypto regulation. So we're going to take a look at an MLIV survey. We're going to take a look at FTX CEO, Sam Bakman-Frieden, the DCCPA Act and how there is a new wording, which makes it, to me, incredibly bullish. And then lastly, we'll take a look at Ray Dalio and his prediction of the five-year downturn. Take that with a grain of salt. And also we'll take a look at the good news and what's going on in the crypto market. So before we start, you can obviously tell that we are not in El Paso. We're in Houston right now, making our way to Puerto Rico as we get down to where we live and can't wait to get back there nice and warm. So right now, the audio may not be as crisp as we may have liked it, but hopefully it'll be just good enough. So first things first, this is the story. Crypto is more attractive as the SEC gets aggressive. Why is this important? Well, it's not important for me or you, but I think for institutions it is because they don't want to get rug pulled and have all their money disappear that they actually invest into. And I think that is what's stopping a lot of big money from coming in. So there was a survey, the MLIV from Bloomberg poll survey and 60% of the 564 respondents said that that legal action or regulation in crypto is a positive sign for the asset class. I have to agree. Again, as we move forward, the government is not going to get 100% perfect. I can guarantee that, but I think it gives some assurance. Those institutions who are like, hey, I don't want to get rug pulled like my friend Mark Cuban did in all these different DeFi wacky type of projects. I want to be able to build wealth and not have everything just go away. So that is a positive. However, this is the thing that they worry about. Major interventions include the U.S. regulatory investigations of bankrupt crypto firms, 3AC and Celcius Network, as it fell as the SEC probe into UGLABS for board aid collections of NFTs. And this is from Chris Gaffney, president of the World Markets at TIAA Bank. He says, I'm in a yes camp. As a professional investor, you need a regulated investment opportunity and it opens the doors for more professional investors to get involved in crypto if it's more regulated. And I will just stress this enough. And that is that institutions that get in, they're not here to believe in the ethos of crypto. They're here to not change the world. They're here to change their wallets. So as they get into it, yes, the price will go up. But remember, they will sell and they will not hold their diamond hands like maybe you are potentially doing. And then they finish this article up. This was interesting about the outlook or fear and greed. And for the survey, most investors were slightly more optimistic about the crypto than they were asked when in July. Almost half of respondents expect the world's largest crypto market value to continue trading between 176 and 25,000. Of course, we're talking about Bitcoin until the end of the year. Now, what does remind everybody that we went sideways for quite a bit of time in 2018 and we were in that 6,500 range before it just dropped out for 50%. And we were trading around 3,000 or 4,000. So just remember that and what's going on. And as we talk about this and we see that more people are excited about investing, does that change the price? No, it doesn't. Last Bitcoin price is still in 19, 2, Ethereum is still around 1,300. Nothing really changes for right now. Again, I think it's going to be a big uptick for regulation for really good things moving. Anyhow, let me just think about that in the comment section. Let's move on to everybody's new favorite bad guy, SPF or Sam Bakeman Freed from FTX. So this all comes down to this new bill that's looking to be passed. And it's about the broker language and the new DCCPA bill draft. So here's what's going on. And again, I think this is extremely bullish because this was a scary misstep for regulation. So a new draft of the Digital Commodities Consumer Protection Act or DCCPA, which the CFTC would use to regulate the industry, has been uploaded to GitHub and many crypto stakeholders relieved. The new language excludes software developers from being counted as digital commodity brokers. Why is that important? One second. Being classified as a broker would entail specific tax reporting requirements, which software developers would not be able to do without centralized management of their platforms. This version contains a limited exception to the term Digital Commodity Trading Facility, which would exclude persons who solely develop or publish software, which could be a boon to defy crypto. Previous bills have defined brokers broadly to include note operators, people like myself, and wallet manufacturers, which this bill specifically excludes. That's good because there would be too much requirements to actually go down as far as tax requirements and reporting requirements. It would make it unusable. So it helps spell it out to where we can actually allow innovation to flourish. The draft also includes new language that would order the CFTC to provide a report on the defy market size and protocols within 180 days of the enactment of the bill. Let me say that again, within 180 days of the enactment of the bill, they're supposed to come out and provide a report on defy market size and protocols to really get the ball moving. Will they do that? Well, the CFTC and the SEC are still behind on the things they're supposed to be doing anyhow that was ordered by Congress. So don't hold your breath. This is going to happen in six months. However, there's a step in the right direction. It also the CFTC to be a liaison with foreign regulators to ensure that US rules harmonize with international regulations, which is some of the things we've seen, especially in the EU and parts of the Asian community area of the world. So when we take a look at this, maybe they could get some actual stipulations as what's going on and actually get things moving. So that is the DCCPA part. And this is the talk thing I was talking about with Sam Bankman because Sam had talked about this. This is an article I'll link in the description as well. And the problem is what Sam said initially and I'll get to that in a second. But it's just states here the crypto community is still not okay with his explanations. And this is Adam Cochran, CEHB partner says the revised version still reads at how they can be a moat that lets centralized entities control these part of the flow and defies. They can profit from it. Again, it's all about profits and people saying, well, this is all about profits and you're making too much money and this and that. So Sam came in and he put a tweet and this is the exact tweet. Again, link in the description. You can find out what he says. He goes, look, I was wrong. This is an interesting way for a retrospective to take a look at. He goes, first off, a huge thanks to everyone who gave constructive feedback, comments and criticism. I know that Eric Voorhees, Ryan Adams, but too made a name. I'd revise my post some already and we'll continue to do so. Thanks particularly to everyone who highlighted the core of crypto, which is this. Freedom to own your own assets, which is why you need to get a ledger, take things off the exchanges. That's one of the rules that we have. For me, you can do whatever you want to. Own your own data, good luck, and to build your own programs. And especially we've seen that with different protocols, financial cash and things like that, where they're sanctioning these developers, which is wrong. On the DCCPA, a bunch of the comments that DeFi community is making are actually important. Here's where it stands. The core goal of the bill is to regulate centralized crypto venues. The main DeFi point is, which that's what Sam is. I mean, he's FTX is centralized. The main DeFi point, touchpoint is how can a regulated centralized entity interface with DeFi, which is how can FTX and Robinhood and all these places interact with DeFi. In particular, it's not making claims about what DeFi developers, smart contracts and validators must do. It's looking to eventually establish guidelines about how each platform interacts. This gets right with the infrastructure bill a while ago got wrong. Developers and validators aren't platforms and shouldn't be regulated. It's a huge step. But again, we'll have to see what the final language is. I'd only support a version that gets this right. Sounds good. One thing that may ultimately be required, centralized entities like FTX, there are likely to be disclosures, requirements and potentially customer suitability test of some sort. It's really important this is done in an equitable way. So this should drive the question, does the customer fully understand the product and its risks? Are they making an informed decision? If you're going to gate products and regulate exchanges, do it on understanding that wealth. What this really comes down to is this. The things he's talking about is do you always read the terms and conditions, the terms of service? No, you don't. And most of you, 99% of you do or do not. Some of you do. Good for you. However, did everybody know the risks and things like that as far as with the protocols and things that they got involved with? Maybe, maybe not. And really what it comes down to is this. Certain places, Celsius, kind of led us to believe that they were a part and it was like a savings account, which it really wasn't because they were doing some shenanigans behind the scenes and we all know that. So really what it comes down to is what Sam is saying here. And I got to agree. And Russia actually does too for people to actually get into investing into crypto and digital assets. They said, look, you can do as much as you want to, but you're going to take a test to prove it. You know what you're actually doing. And if you're dumb and you don't know what it is, or if you're ignorant and don't know certain parts about this, we're not going to let you invest. And people say, well, how can they do that? You know what they do in the United States? You have to be rich. You have to be an accredited investor to invest into other parts of some really risky assets. However, accredited investors aren't the smartest people out there. I've met way more people who are unaccredited investors. And I know a lot more about what's going on than the people who just got lucky or who inherited money or something like that. So what Sam here is saying is like, look, if you want to be able to invest these things and do these things and defy it, just take a test. Essentially, that's what it really comes down to. And then you can prove that you know what you're doing and you're okay. That to me, I think is the way that it should be. And we should not limit it to just rich people to get richer as far as accredited investor anyhow. Let me just think about that in the comment section. And I will say this before we move on. And that is that I know people complain and cry about regulation. I get it. I know I want regulation crypto except me apparently. But remember, I don't know if it's about knowing the things that you're supposed to know, or if it's just rug pulls and exit scams. And of course, if you're only into Bitcoin, this doesn't concern you. I understand what the comments and the argument is, but if you're going to defy, which I think is the future, you had our member, there's already been 2.3 billion lost in hacks. And I put that in quotes because I don't know if that's actually the upper echelon of the project groups that are just going, yeah, we just messed up and we got hacked and all the money's gone. We'll see if we're going to go to Aruba or what it is. But you can just see over time. I mean, last year 1.5, I think this is cumulative. It's not 2.3 in 2022. I could be wrong. But that's what it looks like to me that we've lost almost two and a half billion dollars of your harder money and defy. And of course, there's a lot of people out there that have lost. And to me, I think we need a little regulation to stop this nonsense because me and you both know that there are some bad actors out there and they're stealing from me. Anyhow, I just think about that in the comment section. Let's finish up with a little Ray Dalio talk. And some good news. So Ray Dalio expects negative or poor real returns. I always focus in on these things because I think we're going to do well in the next two, three, four years. If we take a look at the four-year cycles, we should talk about this numerous times. However, there's somebody like Ray Dalio, our drunken miller who come out and said, hey, this is like in the 70s when we just saw flat or negative returns for five to 10 years. I'm going to talk about this and I'm going to tell you why to take it with a grain of salt. So I'm going to skip most of this because it's boring. But Ray's a smart guy and he's done pretty well. And here's what's happening. Where will the market opportunities be over the next five years? And he talks about diversification and that makes sense. I would not put everything into dogecoin. You know, you can do that, but I don't know if that's that's not my strategy. It's just something to make sense. This makes sense. Portfolios are too concentrated and equity-like assets. They go up and down together. I think we're going to see a bright spot coming in terms of better portfolio construction to create better balanced portfolios. And they said, what do you fear in the next five years? He goes, my fear in the next five years, we're reading about the negative or poor real returns in much the same way we had in the 70s. This is the same thing the drunken miller talked about. You can take a look at the S&P 500 and just went flat from late 1960s through the 70s. And it was very few returns. However, there was some small bull runs. And that is essentially the majority of it. But I will just say this, take it with a grain of salt and here's why. So two years ago, Ray Dalio said the cash is trash. This is on January 21st, 2020. He says investors shouldn't stay on the sidelines of 2020 market because cash is trash. So when people hear this, they think, I got to get out of cash and that's it and get into some type of assets. And actually, it wasn't trash so much right now. But back then in 2020, when this printed to oblivion, it kind of was. However, we take a look here. What did he do? Ray Dalio says cash is trash. Here's where he's putting his money instead. He goes, and this was in June 1st, 2022 where he was trying to kind of pivoting. He's like, well, cash is still kind of trashy. You know how fast you're losing buying power and cash, equities are trashier. He says we've shifted into an environment where assets that do well, almost like in the 70s, are real estate, are real assets, real return assets in various ways, the best investments. What types of things like that? Well, he talks about, we've got Vanguard emerging markets, ETF. He's also talks about Bitcoin to get into it, which he said many a time. And then just today, he said, you know what? Things change. So just like he said here, expect negative or poor real returns. It's just a guesstimate, but he says it perfectly. As John Maynard Keynes is credited with saying, when the facts change, I change. The facts have changed, and I've changed my mind about cash as an asset. I no longer think cash is trash. And existing interest rates and with the Fed shrink the balance sheet, it's now about neutral, either a very good or a very bad deal. In other words, the short-term interest rate is now about right. And if you take a look at the Dixie, this is the US dollar index. I mean, we can see right here that it's actually looking pretty good. I mean, since June when this is 2022, it's just been a nice little rocket ride. And over a year, still pretty good. I mean, we were down all the way here. This is when this is before Ray pivoted. Let's take a look at three years. Not too bad. And 2020 kind of went up and then he was actually right. Went down and then here we go up again. So again, when facts change, people change and Ray changed on this one. And I think maybe they'll probably change on the five year outlook. But here's the good news. And the things that we talk about, it looks negative, especially for crypto. But remember, the entire crypto market is half of the value of Apple at 2.2 joint. We're under $1 trillion. So just remember that. But there's good things on the horizon. Like, look at this one. Fidelity is the beef up crypto with another 100 new hires, which is 25% increase. They've got 500 total staff members by the first quarter of 2023. Why are they doing this? Well, they're doing this because of their digital assets structure or their division. They need to hire more people because they see a big boom coming. Also, we take a look at the Bitcoin hash rate because the miners kind of dictate what things are doing as far as just with Bitcoin. Do you know that the hash rate is at an all time high today? What does that mean? That means that there's more Bitcoin miners going online. They are mining Bitcoin and they're taking their sweet time to do so. And I got to tell you, that's at a price of $19,218 because I think they believe there's going to be some better days on the horizon. And what is that equal to? That means that network difficulty is also at an all time high. So the more that the Bitcoin miners get online, the more they compete for minting that Bitcoin, the higher the difficulty level goes up. And you can just see if we take a look over a year. We were down here at, very small, 20 billion somewhere around there. Trillion. Who knows what it is? Super low over three years. And we take a look at all. I mean, the Bitcoin mine difficulty was nothing. Nothing, 3.2 million. Now here we are all the way at the very tippy top. And it's very high. And we take a look at the well multiple. Metric looks at the supply side of Bitcoin's economy. It's calculated by dividing the daily issuance of value of Bitcoin by that 365-day moving average. And of course, as we see here, we actually just dropped above that mark. So the well multiple is also saying, hey, there's some selling going on, but not as much they're used to as Bitcoin miners are not selling as much. And we can see that also over a crypto quant. There were some big sell-offs in June during the lowest, which is kind of crazy. That's what it is. And then also around September. But it's been pretty stable and actually decreasing over the last week or two weeks. So look, these are the good things that we take a look at. Not everything is going to be perfect, but I still see some good news or some good days on the horizon as a new for the crypto market. And that's it for today. So look, like today's video. Do me a favor, give it a thumbs up. Also consider subscribing. Nothing to talk about our time sensitive in the channel, but that is it for today. So thanks so much for joining me in Houston. And I'll see you soon as we make our way to Puerto Rico. Have a good day.