Crypto strikes back!The SEC has been on a suing spree this past year. And there’s finally a win with the Ripple lawsuit.The tides are changing between this win and the possible BTC ETF coming. I smelllllll hope in the air.
Here’s what we got today:
- The Ripple Effect. The biggest legal win for crypto.
- Lower Your IQ in Bull Markets. Different strategies for different cycles.
- From the Crypto Twitter. Narrative watchlist: is the bear ending soon? And more.
Today’s email is brought to you by Stader.
Here’s your Edge 🗡️!
“I put two children through Harvard by trading options. Unfortunately, they were my broker’s children.” – Jason Zweig
News
Ripple vs. SEC: Crypto Strikes Back
Last week, Team Crypto scored big against the SEC.
The judge gave a pretrial ruling in the legal face-off between Ripple and the SEC. Here’s what’s going on:
The Battle and The Verdict
So, let’s set the stage. The SEC, crypto’s supervillain, accused Ripple of a major no-no in December 2020. They said that XRP (Ripple’s token) was a sale of unregistered securities.
The judge took Ripple’s side. (Sorta. The actual situation is much more complex). The judge decided that Ripple’s sales via crypto exchanges and algorithms were okay. They weren’t offers of securities because buyers didn’t directly connect the profit expectation to the Ripple team’s actions.
However, it’s not all sunshine and rainbows for Ripple. The judge said Ripple’s $728.9 million sales to fancy registered investors, like hedge funds, were illegal.
That isn’t good for Ripple. But let’s keep going; crypto as an industry has a lot to celebrate.
The Crypto Wins
The SEC used to claim that almost all crypto tokens were securities. Teams were forced to follow archaic rules created by the SEC. But not anymore!
Tokens by themselves aren’t securities. How a token is sold determines if it’s a security or not. Context is the key.
And that’s great news for us, the retail investors! Instead of selling tokens in private rounds, teams would rather launch tokens on CEXes and DEXes. That means we can buy them right away. It’s like the cool kids’ table at lunch just got bigger. Everyone can sit now!
This ruling could also help in tons of other legal fights. The SEC has pointed fingers at many tokens, saying they’re securities.
The War’s Not Over
Alright, it’s time to reiterate the points. Yes, Ripple and the whole crypto gang won big time. But hold your horses.
- It is not a binding precedent
- The judge didn’t say all tokens are not securities.
- And the SEC is not happy and can appeal the decision.
So, the war isn’t over yet. This is just round one. But for now, let’s enjoy the win.
Link to the pre-trial ruling.
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Strategy
Adapting for Bull Markets
A friend didn’t do well with crypto in the previous bull market.No, he didn’t get wrecked by all the different collapses. What happened?Well, he invested wayyy too much in DeFi 1.0 tokens in the middle of 2021. (Projects like Uniswap and Chainlink). He kept claiming, “The fundamentals are soooo good.” And whenever he saw a memecoin or a crappy project 10x, he’d start coping.Basically, he needed to “lower his IQ” to be successful. Let me explain.
Let’s Talk Basics First.
Principle #1: Coins only go up if others buy.Principle #2: The crowds that stick around in bear markets are completely different from those in a bull market.The people in bear markets are hardcore degens. There’s less liquidity in the markets. They’re attracted to projects with real yield, innovative tokenomics, and solid use cases. They actually have the time to read white papers!
What about the bull market?
This is when your degenerate cousin starts texting you about crypto in the middle of the bull market. All the financial Youtubers pivot back to crypto.There will be many newcomers who won’t understand what ve (3,3) means.What are they interested in?
- Projects with use cases that are simple to understand. That’s why I think Crypto x AI projects and RWA projects have so much potential. The use cases and stories are simple to understand.
- They don’t understand unit bias. Imagine if someone has $1k to invest. They would rather buy 10,000 of a token (like a meme coin) than spend $1k to buy a fraction of a solid coin.
- Pumpmentals. They don’t understand psyops. So they’re more susceptible to projects with charismatic leaders who know how to pump prices up.
They don’t understand advanced tokenomics or any “wars” for tokens.So, to wrap it up, lower your IQ in the bull market. Are you here to be right, or are you here to be profitable?Coins only go up if others buy. Retail’s not buying tokens that are too complicated for them to understand.
It’s not about what you think will go up; it’s about what you think that others think will go up.
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