Apologies for missing the daily update yesterday. I was busy networking with some crypto folks in town, and spent the evening installing the MacOS Mojave Beta. Night Mode is awesome.
Total Market Cap: $286,093,292,456
24 Hour Volume $15,948,130,949
BTC Dominance: 39.6%
The SEC has confirmed that ETH is not a security.
At today’s Yahoo! Finance All Markets Summit, the SEC’s William Hinman stated that “putting aside the fundraising that accompanied the creation of Ether, based on my understanding of the present state of Ether, the Ethereum network and its decentralized structure, current offers and sales of Ether are not securities transactions.”
- It looks like Ethereum is definitely not a security, but this is not the case for 99% of the other projects that conducted ICOs. Based on Hinman’s speech today, it’s pretty clear to me that the SEC is going to start cracking down on quite a few projects very soon.
- This part of the speech was especially interesting to me:
- I hope we get some clarity on this in the coming weeks, but it almost sounds like the SEC will allow tokens to morph into non-securities over time. I’m only speculating, but perhaps the SEC will give current ICO-funded projects some sort of grace period to get a functional and decentralized network up and running. I suppose this would be an example of regulation without regulating.
- The market showed some signs of life after this announcement.
But this also points the way to when a digital asset transaction may no longer represent a security offering. If the network on which the token or coin is to function is sufficiently decentralized–where purchasers would no longer reasonably expect a person or group to carry out essential managerial or entrepreneurial efforts–the assets may not represent an investment contract. Moreover, when the efforts of the third party are no longer a key factor for determining the enterprise’s success, material information asymmetries recede. As a network becomes truly decentralized, the ability to identify an issuer or promoter to make the requisite disclosures becomes difficult, and less meaningful.
Overstock announced they generate $120,000/week in crypto revenue.
Jonathan Johnson, who serves on Overstock’s Board of Directors said, “we have somewhere between $68,000 and $120,000 a week in cryptocurrency revenues; people buying sheets and toasters using bitcoin or ethereum or other coins.”
- This figure was actually shocking to me. Sometimes I forget there are people out there who actually use Bitcoin for its intended purpose. It’s easy to get lost in the Sea of HODL.
- Crypto only accounts for 0.2% of Overstock’s revenue. From what I understand, crypto payments are only available for shoppers in the USA and Canada. I suspect Overstock’s website in other countries processes payments through a third party service that doesn’t support crypto. Still, 0.2% for a major mainstream retailer like Overstock is impressive and an actual sign of real world adoption.