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Novogratz: “No Reason for Cryptocurrency Technology to Become a Political Issue”

Mike Novogratz began by highlighting the significant rise in Ethereum’s price over the past 24 hours. He attributed this surge to speculation around the potential approval of a U.S. spot Ethereum ETF. He noted that this optimistic sentiment stemmed from the ever-changing political landscape in the U.S., particularly in relation to the Biden administration’s stance on cryptocurrency.

Delving into the political shifts affecting the cryptocurrency market, Novogratz recounted a pivotal moment two weeks prior when former President Donald Trump declared himself the “Cryptocurrency President” on the same day President Joe Biden threatened to veto the HJ Res 109 bill. If passed into law, this bill would overturn the SAB 121 bill, which mandates that custodied cryptocurrency assets be recorded on balance sheets, a move that sparked significant controversy.

Novogratz stated that this event became a political litmus test, with Republicans seen as pro-cryptocurrency and Democrats perceived as anti-cryptocurrency. However, Democrats later realized the potential impact of this stance, especially considering the country’s large number of cryptocurrency owners—85 million, surpassing the number of dog owners. Many of these cryptocurrency owners are single-issue voters, making them a key demographic for any political party.

To address the growing political pressure, Democrats underwent a noticeable shift. Novogratz pointed out that several senators and 21 congress members crossed party lines to support the repeal of the SEC’s regulations, now awaiting President Biden’s decision. This bipartisan move indicates a significant change in the political climate for cryptocurrency.

Novogratz speculated that the White House might have called SEC Chairman Gary Gensler, urging a more favorable stance on cryptocurrency ETFs. He emphasized that while he had no insider information, market behavior suggested that a policy shift might be underway.

Novogratz underscored the necessity of bipartisan regulation of cryptocurrency. He pointed out that for the industry to thrive, support from both sides of the political spectrum is needed. He criticized figures like Elizabeth Warren for hindering the Democratic Party on this issue with their staunch opposition to cryptocurrency. He highlighted that key figures like Senate Majority Leader Chuck Schumer have begun to oppose this anti-cryptocurrency stance, indicating broader acceptance within the party.

When asked about his involvement in these efforts, Novogratz admitted to playing an active role in advocating for bipartisan cooperation. He has been working with both Democrats and Republicans to educate and promote sensible cryptocurrency policies. He believes that politicizing cryptocurrency is harmful and hopes his message is beginning to resonate in political circles.

In the last 24 hours, Ethereum (ETH) soared by 22%. This increase was triggered by a significant update from Bloomberg ETF analysts Eric Balchunas and James Seyffart, who substantially raised the estimated probability of the SEC approving a spot ETH ETF.

On social media platform X, Balchunas announced that he and Seyffart had increased the likelihood of a spot ETH ETF approval from 25% to 75%. This adjustment was influenced by rumors suggesting that the SEC might be reconsidering its stance on this politically charged issue. As a result, market participants are now scrambling to adjust their positions, having previously believed the ETF would be denied approval.

Sentiment: Neutral

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