Sup, nerds!

Here’s what you’re getting in today’s edition:

• 💅 This is cool: Coinbase sues the SEC

• 🔎 This seems important: Inflation is cooling > what it means for you…

• 🤝 Partner: Save big on turnover costs with Express Employment Professionals​​

• 🔪 Let's dissect this: The impact of the MSTR stock split on crypto

Terms used in this edition (click for an explanation, or ask Web(GPT)3!):
Blockchain.

💅 This is cool:

Coinbase is Suing the SEC

In one sentence: Coinbase is suing the SEC, alleging it and FDIC failed to comply with Coinbase's Freedom of Information Act requests, in a deliberate attempt to cut crypto companies off from the banking system.

You know how Al Capone was locked up, not for the estimated hundreds of deaths he ordered, but for tax evasion?

(Seriously).

From the outside looking in, it was a weirdly roundabout legal strategy — but it worked!

Same thing goes for Coinbase’s new case against the SEC.

From the crypto industry’s perspective, the SEC has been wildly opaque about it’s enforcement — refusing to state how it categorizes a range of cryptocurrencies and blockchain products, before charging companies with securities fraud for selling them.

(I.e. not sharing the rules of the game, then suing folks for not playing by them).

…but that’s a hard case to argue (and win) in court.

So Coinbase is doing what the government did to Capone, and finding a workaround, alleging the SEC and FDIC failed to comply with Coinbase's Freedom of Information Act (FOIA) requests.

Requests that would have given them a better understanding of the rules that the SEC wanted them to play by.

But whether or not this approach will work is still muddy.

Legal experts have been quick to note that FOIA lawsuits are an uphill battle, given most government agencies have broad disclosure exemptions.

At the end of the day — win, lose, or draw — it’s just nice to see some pushback.

🥇 Want the news before anyone else?

🔎 This seems important:

Inflation Is Cooling — Here’s What It Means for Your Crypto Bags

In one sentence: Interest rates came in lower than expected, suggesting cuts could come on Sep 18th, boosting stock and crypto markets as a result.

Babe, wake up!

New Inflation data just dropped.

The cost of the stuff we buy and use in our everyday lives isn’t increasing as rapidly as expected!

Here’s the data…

Core inflation (the stuff in our lives that is affected by interest rates)

Month-on-month
What was expected: a +0.2% increase.
What we got: a +0.1% increase.

Year-on-year
What was expected: a +3.4% increase.
What we got: a +3.3% increase.

General inflation (the stuff that goes up or down based on supply and demand)

Month-on-month
What was expected: a +0.1% increase.
What we got: a -0.1% decrease.

Year-on-year
What was expected: a +3.1% increase.
What we got: a +3.0% increase.

Nice! So what did we get for outperforming expectations?

In short: we got a quick little pump in crypto markets, followed by a quick little dump — resulting in a round trip back to where we’ve been the past few days.

But in the long term…

This is a positive step towards seeing interest rate cuts the next time the Federal Reserve meets on September 18th.

Cuts that would make everyone’s loans and credit repayments decrease, giving them more money to spend, and boosting the economy over time.

A potential that will likely be front run by investors the moment cuts are announced, giving them the green light to pour money into stocks and crypto (pushing prices up in the process).

Until then, we’ll have to hurry up and wait.

🤝 Partner:

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🔪 Let's dissect this:

The Impact of the MSTR Stock Split on Crypto

In one sentence: MicroStrategy (MSTR) just announced that they’re splitting their shares in a 10-for-1 stock split, which could suggest that this model will be adopted by more companies in the future.

The biggest bulls in crypto - MicroStrategy (MSTR) - just announced that they’re splitting their shares in a 10-for-1 stock split.

ICYMI, MSTR had a spare $500M (or so) in cash back in 2020 and the CEO at the time (Michael Saylor) decided to invest it all into BTC.

Then he invested more money into BTC.

And more.

Until today, where MSTR’s balance sheet boasts over 226,331 Bitcoin, worth over $13B USD at the current value.

Now they’ve chosen to do a 10-for-1 stock split which means…

Put simply, shareholders will get an additional nine shares for every one share they hold (each worth 1/10th the value), which will be distributed after trading closes on Aug. 7.

According to the MSTR press release, the object is: “to make MicroStrategy’s stock more accessible to investors and employees.”

The interesting part is what this could mean for crypto:

While MSTR’s stock split doesn’t impact BTC directly, it does indicate that that this model can work.

So far, we’ve seen Metaplanet take the same approach in Japan, but that’s about it.

Whether having your entire treasury in BTC is a good or bad idea is a matter of opinion.

But we’re glad companies like this exist.

How Does a Stock Split Work?