Bitcoin Faces Renewed Regulatory Pressure: No Shock Here

Mark E. Jeftovic, writing for bombthrower.com, isn't surprised by the increased regulatory pressure on Bitcoin and doesn't see it changing the long-term trajectory of the cryptocurrency.

Bitcoin: A Monetary Regime Change

Jeftovic has always viewed the rise of Bitcoin and other non-state fintech as a monetary regime change. He suggests it's naive to expect the existing powers and establishment to surrender without a fight. For over a century, the Cantillionaire class has had a monopoly over a mechanism that subtly transfers wealth from everyone else to themselves.

The Rise of Asymmetric Public-Key Cryptography

Then, along comes Satoshi, like Prometheus, gifting humanity with a new tool: asymmetric public-key cryptography. This mathematical concept allows individuals to protect themselves from this wealth transfer. The elites find their wealth-leeching mechanism delivers them fiat currency units that depreciate over time, while those using the new system find their purchasing power increasing.

The Establishment's Response

The establishment, including central bankers, career politicians, and fiat financiers, likely find this shift unfair. Those who see the impending change and refuse to be "orange pilled" will use all their power, influence, and institutionalized corruption to delay the prospect of hyper-Bitcoinization.

Chokepoints: A Brief History

Chokepoint 1.0, an Obama-era initiative from 2013, aimed to freeze unsanctioned financial players out of the legacy banking system. Chokepoint 2.0 occurred during the 2021-2022 crypto winter, with the fallout from the FTX bankruptcy. Chokepoint 3.0 began to take shape in mid-2023, with the US government's planned "survey" of Bitcoin miners' electricity usage.

Regulatory Pressure Increases

Since the SEC's loss against Bitcoin in approving spot ETFs, there's been an increased tempo of regulatory FUD in the US. The SEC served a Wells notice on Uniswap and accused Metamask of being an unlicensed securities broker. The founders of the Samourai Wallet were arrested and charged with money laundering and unlicensed money transferring offenses. The FBI issued a warning against using KYC-free exchanges.

Proposed Tax Disclosures

The US IRS released a proposed new 1099-DA tax form to report "Digital Asset Proceeds From Broker Transactions". It includes a checkbox option for "unhosted wallet provider" and asks for transfer-in wallet addresses and transaction IDs.

Future of the Crypto-Economy

Jeftovic has never advocated for using Bitcoin and crypto to evade taxes. He's always expected increasing regulations and identity verification for all transactions into or out of the crypto-economy. He believes that wealth is increasingly moving into the crypto-economy, with no intention of returning to the fiat system. This will inevitably lead to two separate monetary systems: a UBI/welfare system running on CBDCs and a network of Crypto-anarchy.

Monetary Apartheid

Which side of this bifurcation you'll be on is up for grabs. Retail facing CBDCs are still a few years off, so there's still time to get on the right side of the coming Monetary Apartheid.

This article is a small excerpt from the May edition of The Bitcoin Capitalist Letter.

Conclusion

The renewed regulatory pressure on Bitcoin is not surprising, and it doesn't change the long-term prospects of the cryptocurrency. The question is, which side of the coming Monetary Apartheid will you be on? Share your thoughts on this article and discuss it with your friends. Don't forget to sign up for the Daily Briefing, which is delivered every day at 6pm.