---
title: “That’s Our 2 Satoshis” — Regulators Remain Out of Touch, But Crypto Continues to Rally
description: Despite increased regulatory actions against U.S. digital asset companies, BTC and ETH have rallied in the first quarter of 2023, with the market often shrugging off the regulatory pressure.
image: https://www.ar.ca/hubfs/Copy%20of%20TO2S%20375x175%20(2845%20%C3%97%201600%20px)%20(8).png
---

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# “That’s Our 2 Satoshis” — Regulators Remain Out of Touch, But Crypto Continues to Rally

[![Jeff Dorman, CFA](https://www.ar.ca/hubfs/Jeff%20Dorman.png)](https://www.ar.ca/blog/author/jeff-dorman-cfa)

 Written by [Jeff Dorman, CFA](https://www.ar.ca/blog/author/jeff-dorman-cfa)

 Apr 3, 2023

****![Thats Our 2 Satoshis Logo](https://www.ar.ca/hs-fs/hubfs/Thats%20Our%202%20Satoshis%20Logo.png?width=300&name=Thats%20Our%202%20Satoshis%20Logo.png)****

![Screen Shot 2023-04-03 at 10.24.59 AM](https://www.ar.ca/hs-fs/hubfs/Screen%20Shot%202023-04-03%20at%2010.24.59%20AM.png?width=720&height=404&name=Screen%20Shot%202023-04-03%20at%2010.24.59%20AM.png)

*Source: TradingView, CNBC, Bloomberg, Messari*

 

**Crypto Versus Politicians**

Perhaps it is unsurprising that, in the wake of FTX’s fraudulent and politically embarrassing demise, U.S. regulators would launch a campaign against digital asset companies, protocols, and people. The SEC, DOJ, CFTC, OCC, Treasury, FDIC, and the White House are holding nothing back as they individually and collectively sweep the legs out from any digital asset entity they have explicit or implicit control over. 

 

What is surprising to many amidst this backdrop is how well BTC and ETH performed in the first quarter of 2023. The digital assets market continues to brush off (and sometimes rally in the face of) these regulatory actions. This past week was no exception. The CFTC [filed a civil enforcement action charging Binance](https://www.docdroid.net/60YAbCz/cftc-binance-pdf#page=1) CEO Changpeng Zhao and three entities that operate the Binance platform with numerous violations of the Commodity Exchange Act (CEA) and CFTC regulations. Once again, the market shrugged it off. While many went with a [typical “the sky is falling; sell everything” response](https://twitter.com/adamscochran/status/1640378686397448192), the market decided this is much ado about nothing. This latest Binance crackdown is likely bad for U.S. market makers who use Binance but has little to no impact on Binance itself or the market. Essentially, Binance is being charged with ignoring U.S. rules, because the U.S. is on the "do not touch list" like Cuba, Iran and North Korea (congrats for making this list, United States!) The sheer number of enforcements and actions from the U.S. against crypto entities minimizes any negative response—like the boy who cried wolf. 

 

| ![unnamed - 2023-04-03T102104.989](https://www.ar.ca/hs-fs/hubfs/unnamed%20-%202023-04-03T102104.989.png?width=346&height=396&name=unnamed%20-%202023-04-03T102104.989.png) | ![unnamed - 2023-04-03T102110.059](https://www.ar.ca/hs-fs/hubfs/unnamed%20-%202023-04-03T102110.059.png?width=353&height=324&name=unnamed%20-%202023-04-03T102110.059.png) |
| --- | --- |

*Source: *[*Coinglass*](https://www.coinglass.com/today)

 

Again, the attack on the digital assets industry is not entirely surprising. But it is surprising that many politicians think this stance will help them. Senator Elizabeth Warren appears to be [building an “anti-crypto” army](https://www.politico.com/news/2023/02/14/elizabeth-warren-anti-crypto-ftx-00082624). Meanwhile, Coinbase recently released a survey that suggests [20% of Americans own crypto](https://www.coinbase.com/blog/new-national-survey-of-2-000-american-adults-suggests-20-of-americans-own), and the vast majority see an urgent need to update the financial system. Additionally, Paxos recently published a survey that suggested [75% of consumers remain confident in the future of crypto](https://www.prnewswire.com/news-releases/consumer-confidence-in-crypto-remains-strong-in-the-wake-of-turbulent-2022-301764554.html). 

 

Even if one takes these results with a grain of salt, do Warren and company actually believe that a majority of people in the U.S. are anti-crypto? Apathetic, maybe, but actively against it? 

 

![](https://lh5.googleusercontent.com/e3GFpFpY4H2WMQrYL8vXwoykqI_0w0wT8weDUkhhLBlQm-M90sJ_VAc0jNQg1iRUges5rDmvBiJMeMOgtb9BvUTIHkExLoneXRQdR9tYiLK8g1UjGPwc7S3Xn4lY3NPvdArlSf4h63axXB7VNbTEESk)

*Source: *[*Coinbase*](https://www.coinbase.com/blog/new-national-survey-of-2-000-american-adults-suggests-20-of-americans-own)

 

In 2018, South Koreans had a legitimate reason for falling in love with digital assets, as [documented in an article by The Verge](https://www.theverge.com/2018/4/3/17192886/bitcoin-cryptocurrency-south-korea-millennials). The upcoming generation of U.S. digital asset owners will likely behave much like Korean traders in 2017. 

 

![](https://lh4.googleusercontent.com/9TqPtVCW092coWzTJ5tyDbhx2lJqXqKed9zULqG0DT8dYXZPeLbwTpciC46inGWi4S-8q87nLgDOsooBvKNnDYE5stYByK6v2cq7BTd5BovWbbn2Pj0-tfdTVDc3g-E7NxSCFL2Uou_3ALnrNtZMgOs)

*Source: *[*The Verge*](https://www.theverge.com/2018/4/3/17192886/bitcoin-cryptocurrency-south-korea-millennials)

 

Sound familiar? You could replace “Korean” with “American” in the paragraphs above, and you wouldn’t skip a beat. Last year’s [World Inequality Report](https://wir2022.wid.world/) dove into the inequality data, reporting that the poorest 50% of our global population earn just 8.5% of global income and own just 2% of global wealth. Conversely, the top 10% of income earners earned 52% of global income, and the wealthiest 10% own 76%.

 

![](https://lh3.googleusercontent.com/4L7h4x7LoYvJQSmL4Pr815b_1CgvF6IpDY5Eu7fTtW9Bo97f0VdOsOqtTeiAdHxzi_cWWX429ZtIRpmzQLzhbF9DCIdZ4LbUKl_VCTEmFPlgsbUSPrBiY79xbGy65JcejePe9xPl4OLRWJ81TucFvJE)

*Source: *[*World Inequality Report*](https://wir2022.wid.world/)* *

 

Not too long ago, many politicians chose to go public with their support for the digital assets industry. There are more incentives for politicians to be pro-crypto than against it. States that have embraced the industry are proving that being pro-crypto is [good for the local economy](https://bitcoinmagazine.com/business/texas-a-mecca-for-bitcoin-mining). Crypto-friendly politicians have been able to raise money from previously untapped pools of capital. Politicians that have been publicly in favor of the industry have often gone viral and [risen in national prominence](https://floridapolitics.com/archives/459582-miami-mayor-francis-suarez-2024-presidential-bid-not-a-crazy-conversation). And talking about crypto increases engagement. In 2022, when KPMG announced that it put BTC and ETH on its balance sheet, its tweet received nearly 15,000 likes, which is thousands more than they typically get when they tweet.

 

![](https://lh4.googleusercontent.com/BzbPXSsGNNNlAQpYtoEoLiChojaEODlcAccRo13mpYikNJz_9tiD7dn9KaB6TofRm02GLA8pyYOMVt05eoUo7YBcJpNkEWTrXmjrgbSEtIsSDLtZuGaghYMNrSsOwq9udQGyAWGOelwrD1zF7h5Dpc8)

*Source: *[*Twitter*](https://twitter.com/KPMG_Canada/status/1490728332345987078)

 

This tug-o-war between U.S. regulators and crypto supporters will only intensify, but it’s very difficult to see anti-crypto rhetoric taking hold. 

 

 

**The Arca Portfolio Management Team**

*Jeff Dorman, CFA - Chief Investment Officer*

*Michael Dershewitz - Chief Operating Officer*

*Katie Talati - Director of Research*

*Sasha Fleyshman - Portfolio Manager*

*David Nage - Portfolio Manager*

*Wes Hansen - Director of Trading and Operations*

*Michal Benedykcinski - Senior Vice President, Research*

*Nick Hotz, CFA - Vice President, Research*

*Kyle Doane - Vice President, Trading*

*Robert Valdes-Rodriguez, CFA- Vice President, Research*

*Alex Woodard - Associate, Research*

*Christopher Macpherson - Associate, Trading and Operations*

*Andrew Masotti - Associate, Trading and Operations*

 

**To learn more or talk to us about investing in digital assets and cryptocurrency **

**call us now at [(424) 289-8068](tel:+14242898068).** 

 

 

 

 

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Disclaimer: This commentary is provided as general information only and is in no way intended as investment advice, investment research, legal advice, tax advice, a research report, or a recommendation. Any decision to invest or take any other action with respect to any investments discussed in this commentary may involve risks not discussed, and therefore, such decisions should not be based solely on the information contained in this document. Please consult your own financial/legal/tax professional.

Statements in this communication may include forward-looking information and/or may be based on various assumptions. The forward-looking statements and other views or opinions expressed are those of the author, and are made as of the date of this publication. Actual future results or occurrences may differ significantly from those anticipated and there is no guarantee that any particular outcome will come to pass. The statements made herein are subject to change at any time. Arca disclaims any obligation to update or revise any statements or views expressed herein. Past performance is not a guarantee of future results and there can be no assurance that any future results will be realized. Some or all of the information provided herein may be or be based on statements of opinion. In addition, certain information provided herein may be based on third-party sources, which is believed to be accurate, but has not been independently verified. Arca and/or certain of its affiliates and/or clients may now, or in the future, hold a financial interest in investments that are the same as or substantially similar to the investments discussed in this commentary. No claims are made as to the profitability of such financial interests, now, in the past or in the future and Arca and/or its clients may sell such financial interests at any time. The information provided herein is not intended to be, nor should it be construed as an offer to sell or a solicitation of any offer to buy any securities, or a solicitation to provide investment advisory services.

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