00:00An unnamed state authority has launched an investigation into Ethereum, so let's talk about how XRP becomes the exit ramp, or the ARK, that saves crypto.
00:12The SEC has come after ETH as a security.
00:16I do believe that proof-of-stake, pure proof-of-stake, where you put your assets in somebody else's pool to earn a profit, actually will end up being classified a security.
00:27The jury's still out on proof-of-work, but we know that XRP is not a security.
00:34So let's get into what the potential outcomes of this is going to be, and the implications for the broader market, along with some of what I mentioned in some previous videos,
00:47and how that could lead to a situation where the majority of liquidity that's in the crypto market, currently in Bitcoin, ETH, and Tether, could end up flowing into XRP.
00:59So, obviously, there's some pretty significant headwinds now for ETH that are public.
01:05I think that that'll continue.
01:07We've seen a lot of the, you know, evidence that there was some potential collusion and other problems for what a lot of people have talked about as ETH gate.
01:19You know, until that's proven in a court of law, we're going to stay away from that, but there are some pretty serious allegations there.
01:27And so now that we do have state authorities looking into the Ethereum Foundation and the SEC pursuing Ethereum as a security,
01:35not boding very well for that network.
01:38We've already seen a rotation from ETH into Solana.
01:41Yeah, they could be next on the chopping block.
01:46The only thing we know for sure, again, is XRP itself, the asset, is not a security.
01:52It's the only thing that has clarity here in the U.S.
01:54And so I've talked about before, you know, we've got Japan hiking rates that could have broader implications for U.S. treasuries.
02:05In that market, the FOMC today did not raise rates.
02:08They just held them steady, which is what was expected.
02:11They're going to continue to stay at five and a quarter to five and a half percent for the interest rates here in the U.S.
02:21We've also got the digital dollar project joining the Digital Pound Foundation, which is interesting that that was announced today as well.
02:32So a lot of things moving in the crypto space, a lot of news happening.
02:35But with that, you know, let's say we do see Tether come unpegged or sanctions issued against Tether.
02:46We saw OKEx drop their trading pairs with Tether.
02:51I believe it was earlier this week.
02:54And that's to be compliant with MICA and the rules that the EU has put forward.
02:59So, again, that kind of is interesting that the digital dollar project has now partnered with the Digital Pound Foundation.
03:09You know, there were some some rumblings early on that MICA could impact the U.S.'s regulation in the way we approached digital assets when we chose to do so.
03:19And so it's looking more and more like that's going to be the case.
03:22We also had, you know, Coinbase and Circle speak in front of Congress just just a little while ago discussing Tether's potential problems,
03:35allowing people to transact on their network in specific jurisdictions without compliance when it comes to KYC, AML and OFAC sanctions, the other things there.
03:45So, you know, illicit parties transacting on the network doing not so good things.
03:52I don't know if Epstein and all of that ends up getting tied in there.
03:56We'll see how that plays out.
04:00See, those are the two things, you know, kind of looming for Tether and Ethereum.
04:04How does Bitcoin roll into this and what's the problem there?
04:07Sure. Well, every time Tether mints more Tether, there's a direct correlation to an increase in Bitcoin's price.
04:18If you look at both the charts, you figure that out.
04:21And it's pretty interesting, right?
04:25So when we see a reduction in Tether supply, we tend to see a drawback in Bitcoin's price as well.
04:31So if we did have a destabilization or a freeze of Tether, that's why I think there could be implications for Bitcoin.
04:40I think they're tied.
04:42That's not for the backing reason.
04:44You know, a lot of people postured a long time ago that Tether would mint Tether and then buy Bitcoin and back the Tether they just minted with the Bitcoin.
04:53I think that may have been the case in the beginning, but they have shored themselves up.
04:56And if you look on their website, it does show that, you know, more than 75% of their reserves are U.S. Treasuries.
05:04And that's been verified. They've been audited.
05:06So the only real way that they could go down at this point, I don't think the U.S. is going to default on our debt.
05:13We can print the money.
05:14So the only way Tether really has serious problems is if we do sanction them, again, for illicit activities and noncompliance, which I think is an inevitability, honestly.
05:28So you've got those two dominoes there.
05:31Tether then impacts Bitcoin.
05:34You have a deleveraging.
05:35As people look for an exit, I think XRP and Ripple are going to be coming out of the other side of their lawsuit.
05:43We've already had XRP designated that it is not a security.
05:48Back last year on July 13th, the judge issued that ruling.
05:55And since then, XRP has really just kind of maintained where it's been.
05:59And Ripple is still under litigation for early sales of XRP, which probably end up having to pay a fine for that.
06:09But then we will have, you know, I'm hopeful that we have some type of new test that comes out of this, kind of like the Howey test for securities,
06:18but a Ripple test for digital assets to decide whether they are a security or not.
06:23And again, one of those things that I think is going to be stipulated there is, you know,
06:28are you putting the asset up for profit, invested interest in some other party to do something that allows you to profit?
06:37And if that's the case, you know, proof of stake, you're going to stake that with a provider in their,
06:42and when you put it in their pool, I think that's going to be the, like, the piece that divides this.
06:47In their pool is going to be a security.
06:50If it's delegated proof of stake, I think there's going to be a workaround there.
06:54Let's say all of these collapse.
06:56At one time, there's downward pressure on Ethereum.
06:59We get sanctions on Tether.
07:00This impacts Bitcoin.
07:02Everybody's going to be looking for an exit in crypto.
07:05And if you just so happen to have an XRP ETF rolled out by BlackRock,
07:14which they had a fake one filed last year in November,
07:19so they already have the infrastructure to just use that conduit and roll it right back out.
07:23They would just have to file an S-1 with the SEC and get it approved,
07:28which if Ripple was outside of the lawsuit or there had been a settlement had,
07:34I think that that would be feasible.
07:37So we already do have an XRP ETF also, or it's an ETP in Europe.
07:42In the U.S., we don't have any XRP ETFs.
07:46If they rolled that out at the same time,
07:47you could have an influx of liquidity from, let's say, the Bitcoin ETFs and the broader market into XRP
07:55while everybody else was looking for the exit door from Ethereum and Tether and Bitcoin.
08:02So XRP ends up becoming the ARK or the savior while everything else is crashing down.
08:07People are running for the door and there's XRP in the way.
08:11So that's kind of what I see playing out.
08:14You know, I'm speculating here.
08:16Nobody has a crystal ball.
08:17They don't know the future.
08:19But I'm kind of trying to read the tea leaves and put it out to you guys in a way that's understandable.
08:23Again, the domino theory had a lot of traction.
08:26Appreciate everybody that watched that video.
08:29And hopefully this gives you some insight into how XRP can become the savior or the ARK for
08:35not just the crypto markets, but broader markets at scale.
08:39You know, if we do have implications for broader markets where, you know, the losses in Bitcoin
08:46because it settles T plus two causes downward pressure on the general stock market,
08:52they have to pull from those positions in order to cover losses here to make people whole.
08:58This not, not a rosy picture that gets painted during an election year for the administration.
09:05So it'd be interesting to see how things play out.
09:08But I think this scenario is likely.
09:12So if you do own XRP, I'll just say this here, nothing on this channel is ever financial advice.
09:20Always consult with your financial advisor before making any investment decisions.
09:23This is only for educational and entertainment purposes only.
09:26Um, but you know, and, and I have fully disclosed, I have a large position in XRP personally.
09:32So I do have biases and vested interest to take everything with a grain of salt, but, um, you
09:38know, uh, I'm hopeful that this doesn't happen.
09:43It could have horrible implications for a lot of people.
09:45There'd be a lot of people that would cry and have a lot of problems if this does occur.
09:49Uh, but, uh, you know, again, reading the tea leaves, this is kind of what I see playing out.
09:55So hopefully this has been informative for you.
09:58Uh, if you do, uh, like this content, if you'd like to see more, you can check out other
10:04videos on the channel, please like subscribe, and we'll see you on the next one.
