Global governments’ involvement in crypto is diverging.

On one hand, developing countries are rushing to adopt crypto. These countries see crypto adoption as a pathway to a brighter future.

El Salvador is already accepting bitcoin as legal tender…

Cuba made bitcoin and altcoins legal for commercial transactions and investments…

Ukraine just passed a law to make bitcoin legal tender by the start of 2023…

And other countries like Panama could soon follow.

On the other hand, countries like the United States and China have been trying to curb cryptocurrencies.

These countries view crypto adoption as a threat to their financial power.

China has reiterated crypto transaction bans several times since 2013.

I’ve never been to China, but the ban must not be working. Since, you know, it has been eight years, and they’re still trying…

In the U.S., the Securities and Exchange Commission (SEC) now wants to classify several crypto products as securities.

As securities, they would have to meet regulatory guidelines, similar to stocks and bonds.

Chairman Gary Gensler believes the SEC is protecting investors by imposing greater scrutiny on crypto markets.

But who is the SEC really protecting here?

A Blueprint for Becoming Poor

Gensler’s advice to young investors: Start saving early, targeting an 8% annual return.

Really, Gary? This is laughable.

If you’re lucky, you can get a 0.5% yield on cash in a savings account today. Meanwhile, the U.S. inflation reading last month was 5.2%.

So, by investing in a savings account today, I can get a real yield of negative 4.7% per year. That’s a hard pass for me.

To make things worse, after Coinbase received a notice from the SEC that it could be sued, the price of Ethereum fell 30% over the next two weeks.

If you sold Ethereum after the sell-off and stowed the money into a savings account, it would take you over 50 years to make up for the loss.

Following Gensler’s advice sounds like a blueprint for becoming poor.

Nonetheless, the threats of regulation are old news…

Higher Crypto Prices Are Coming

China’s government has been trying to ban crypto transactions for eight years.

The SEC has been calling various cryptos “securities” since 2017.

None of this has derailed the 5,600% rise in the crypto market over that timespan.

total market crypto index

(Source: Bloomberg.)

If anything, the SEC’s move to regulate cryptos will only make the market stronger by attracting new entrants.

Many institutions want regulatory clarity before they jump into the crypto space.

Better infrastructure and regulations have been two barriers for many institutions looking to move into crypto, according to Guy Hirsch, the U.S. managing director at eToro.

Walt Bettinger, Charles Schwab’s CEO, reinforced that view on a call in April, suggesting the company has been awaiting regulatory clarity before offering crypto services to its clients.

So, with its tampering in the crypto markets, the SEC may actually make them stronger.

I expect higher crypto prices are coming as fresh institutional money enters the market.


Steve Fernandez

Research Analyst, Strategic Fortunes


Morning Movers

From open till noon Eastern time.


United Natural Foods Inc. (NYSE: UNFI) is a distributor of natural, organic, specialty and conventional grocery products in the U.S. and Canada. It is up 21% this morning after reporting earnings for Q4, with both earnings and revenues exceeding analyst estimates.


Thor Industries Inc. (NYSE: THO), the RV (recreational vehicle) maker, is up 10% today on Q4 earnings news. The company kept with the trend from the last four quarters and delivered an earnings and revenue beat for this quarter as well.


Federal Home Loan Mortgage Corp. (OTC: FMCKL) is up 10% today after the Federal Housing Finance Agency announced an indefinite extension of forbearance programs for multifamily properties, which was set to expire on September 30.


Lyell Immunopharma Inc. (Nasdaq: LYEL) is a biotechnology company that develops T-cell therapies for patients with solid tumors. The stock is up 10% this morning on a bounce-back after the stock dipped to an all-time low late last week.


Huntsman Corp. (NYSE: HUN) manufactures and sells various organic chemical products worldwide. It is up 8% today on the news that it will be partnering with KPX Chemicals to create advanced polyurethane solutions for Korean automakers.


Huaneng Power International Inc. (NYSE: HNP) generates and sells electricity and heat to regional and provincial grid companies in China. The stock is inexplicably up 8% this morning. In an attempt to meet emissions goals, city and provincial governments are ordering power cuts in their regions. This combined with the rising cost of coal ultimately hurts the profitability of power companies in China.


O-I Glass Inc. (NYSE: OI) manufactures and sells glass containers to food and beverage companies. The stock is up 7% this morning on the excitement around an upcoming investor presentation where it will share its business plan to accelerate the company’s transformation to meet the changing needs of the packaging market.


Endava plc (NYSE: DAVA) provides technology and software services to several industries across Europe, North America and Latin America. The company is up 7% after delivering an earnings and revenue beat for Q4 today.


Teva Pharmaceutical Industries Ltd. (NYSE: TEVA) manufactures, markets and distributes generic and specialty medicines. The company is up 6% this morning after it reached an agreement with the state of Louisiana to settle the state’s opioid-related claims against the company for $15 million.


Sana Biotechnology Inc. (Nasdaq: SANA) is a biotechnology company that focuses on utilizing engineered cells as medicine. It is up 6% today on no particular news.