As expected the Federal Reserve raised interest rates by 75 basis points, which is what needed to be done to help curb inflation, but that rate hike began putting the spotlight on the crypto sector again. Bitcoin shot up over 8% and Ether over 15% on the news, this shouldn’t be a shock to those that have been paying close attention.
With the SEC jockeying for position as they are in a race with the CFTC as to who will lay down the much needed regulation on the crypto sector. There is a lot on the line not only for the regulators but also for the sector as whole, the more guidance available the cleaner the market becomes, eliminates or at least mutes the bad actors in the layer-2 space.
Now Bitcoin and Ether are not the only players of value in the space, other Layer-1 blockchain networks have been generating serious attention and growth potential as investors plow in to make sure they do not miss the boat as many did during the Internet Boom of the 1990’s. Avalanche, Solana and Pecu Novus have also been driving innovation and getting some attention for the growth in front of them.
The challenge Coinbase is facing currently is being a focal point of the SEC at this point as they began to probe the exchange on suspicion of allowing American citizens to trade unregistered securities, which makes no sense as they are the one exchange that has little choice but to comply with current regulation, alas this is what they are dealing with. Ripple has been at odds with the SEC for a while as well, this is the problem when you try to regulate an industry late in the game, what happened in the past gets focused on.
Meanwhile back at the ranch Michael Saylor of MicroStrategy has been preaching that Ethereum is more of a security than a commodity and that Bitcoin is the only commodity in the crypto space. Which makes no sense, Layer-1 blockchain networks that are providing infrastructure to build dApps, platforms both decentralized and centralized, they are like the foundation of a city. So because they are rare in nature and provide a raw basis for layer-2 projects to build on then it has more characteristics of a commodity rather than a security. A commodity is a basic good or material that are widely used and not meaningfully differentiated from one another, in this case Bitcoin, Ethereum, Avalanche, Pecu Novus, Solana are fall in that space. One coin isn’t different than another coin in a specific network, one Bitcoin is like another Bitcoin for example, the uses are all meaningful and they serve a purpose. Pork Bellies are considered a commodity and so are legumes and oil, maybe this is a reach but in short the CFTC should be regulating the Crypto Market as it relates solely to layer-1 networks.