To The Moon

The U.S. Congress is advancing three major cryptocurrency bills that could impact the $2.8 trillion global crypto market. This marks the beginning of comprehensive regulation for the industry.

What Changes Do the Bills Bring?

1. Stablecoin Regulation
   Stablecoins like USDC must hold full reserves, similar to bank deposits, and provide monthly public ledgers. Compliant companies will benefit from this regulation.

2. Token Classification
   Tokens like Bitcoin are classified as "commodities" regulated by the CFTC, while some tokens are deemed "securities" under SEC oversight. This clarity helps exchanges know which tokens can be legally traded.

3. Ban on Government Digital Currencies (CBDCs)
   To address concerns about government-issued digital currencies enabling surveillance of all spending records, the legislation protects the privacy of cash payments.

Legislative Progress

• On July 17, internal disagreements among Republicans delayed progress, with 12 lawmakers initially refusing to support the bills. Former President Trump intervened, promising to include anti-CBDC provisions in the National Defense Authorization Act to achieve consensus.

• On July 16, $Circle Internet Corp.(CRCL)$ surged 19%, while $Coinbase Global, Inc.(COIN)$ rose 2.6%.

How to Evaluate the Impact of the Legislation

1. Increased Compliance Costs
   This will lead to market consolidation, eliminating smaller players.

2. Complementary Role in Traditional Finance
   Crypto assets may evolve into a supplementary layer within the traditional financial system, rather than a disruptive replacement.

3. Positive Impact on Compliant Companies

   • Beneficiaries include compliant exchange operators such as the publicly traded $Coinbase Global, Inc.(COIN)$ .

   • Stablecoin issuers like $Circle Internet Corp.(CRCL)$ will also benefit.

   • Broker-dealers offering token securities trading, such as $Robinhood(HOOD)$ , may gain an advantage.

Trading Strategy

1. Market Expectations
   The market anticipates the passage of the crypto regulatory bills, with benefits already priced in, leading to preemptive stock price increases.
   However, a slight pullback in stock prices is possible after the legislation is finalized.

2. For Coinbase Shareholders
   If you’re concerned about potential consolidation at high stock prices, you could sell out-of-the-money call options to generate income during this phase.

3. For Those Looking to Buy Coinbase Stock
   If you’re worried about being trapped at a high price, consider selling out-of-the-money put options.

Strike Price and Expiration Date Recommendations

• Sell Call Option:
  $COIN 20250718 430.0 CALL$  (94% probability of success)

• Sell Put Option:
  $COIN 20250718 385.0 PUT$  (92% probability of success)