Stacked Insights Newsletter, 12.14.21 Crypto in the congre | Stacked

Stacked Insights Newsletter, 12.14.21

Crypto in the congressional spotlight

Cryptocurrencies have stolen the spotlight during US government affairs on numerous occasions this year. However, the spate of congressional hearings that started last week and continue through tomorrow’s monetary policy meeting are the most important yet.

Last week a veritable who’s who amongst crypto CEOs appeared before congress to make a case for digital currencies. Amongst them was none other than Sam Bankman-Fried of FTX, who spoke on the necessity of well-informed crypto regulations and the growing clout cryptocurrencies have in mainstream society.

Several representatives and congresspeople — Reps. Anthony Gonzalez and Bryan Steil — emphasized how crucial a friendly regulatory atmosphere towards crypto is for keeping the rising tide of Web3 innovation domiciled in the US.

That sentiment was echoed across party lines and appeared far more productive than previous divisive meetings. But during today’s hearing, the positive tone stalled around the topic of stablecoins.

Sen. Elizabeth Warren has staunchly opposed the cryptocurrency industry — and today was no different. She claimed stablecoins are “...propping up one of the shadiest parts of the crypto world, DeFi, where consumers are least protected from getting scammed.” She then went on to say stablecoins “pose risks to our consumers & to our economy.”

Her remarks were in direct opposition to Sen. Toomey, who reiterated support for including stablecoins within existing banking infrastructure. “Stablecoins offer tremendous potential benefits, including greater payment speed, lower payment costs, expanded access to the payment system, and programmability.”

BTC holds the line at $46K

After a relatively disastrous week full of liquidations, capitulations, and bearish vibes across Crypto Twitter, BTC finally appears to have found its footing between $46K — $50K.

The indecision currently taking hold of the market appears correlated to the final day of Fed monetary policy talks scheduled for Wednesday. Many expect the Fed to comment on the unexpected and unabated rise of inflation.

Increased flight to stablecoins indicates traders are expecting increased volatility. However, given Bitcoin’s core utility as a store of value that hedges against inflation, the anticipated volatility might be to the upside. In recent weeks, BTC has repeatedly entered oversold territory, indicating sellers are increasingly exhausted in the current range.

Watch for a reaction should BTC touch $46K — a strong bounce here shows needed vigor from bulls if they hope to bring BTC out of its short-term slump.