Are Bank Regulators Trying to Kill Crypto?

And why such an effort will do more harm than good

Ric Edelman: It's Tuesday, April 4th. Remember I said on a show not long ago that federal regulators are trying to kill crypto? Well, a Washington, D.C. law firm has now published a 37-page white paper making that same accusation. Cooper & Kirk says the FDIC, the Federal Reserve Board and the Office of the Comptroller of the Currency are waging a secret war against crypto. Cooper & Kirk won a lawsuit against FDIC, the Fed and the OCC when those agencies tried to kill payday lenders. And now the law firm says they're going to come to the defense of the crypto industry. And so far, the regulators are losing their battle against crypto. Bitcoin prices are up 30% since the FDIC shut down Signature and Silvergate Banks, and dozens of other banks now say they're happy to do business with crypto companies.

So if the Fed, the OCC and the FDIC were trying to scare off all banks from doing business with crypto, they're failing. Customers Bancorp is willing to do business with crypto. So is Fifth Third, JPMorgan Chase, Bank of New York Mellon and Western Alliance Surety Bank. The list goes on and on and on. And soon Congress is going to step in and stop the regulator's actions who are violating their own rules of conduct. Regulators are not allowed to impose new rules without first holding public hearings and setting a public comment period. None of that's been happening yet. I tweeted last week that it's going to get ugly until we settle down with new laws and regulations governing crypto. So far, all the regulators have done is create panic among bank depositors and turmoil in the stock market. 

Crypto, meanwhile, is chugging right along, and that's why you need to continue your level of interest and curiosity about this. You can read my book, The Truth About Crypto. You can get your certificate in blockchain and digital assets courses specifically created not just for financial advisors and crypto professionals, but a separate track specifically for investors, consumers and students.

You can also make investments in the crypto environment. Global X ETFs has three options that I think are definitely worthy of your consideration. I own these ETFs. All three of these Global X ETFs engage in what's known as the “picks and shovels” approach to crypto investing. You see, there are two different ways you can engage in crypto. One of them is to buy crypto directly, buy bitcoin, buy Ethereum or some other digital assets. That's cumbersome. It's complicated. It is a different way to invest and it's frankly beyond the ability or interest level of most folks. But there's an alternative way to invest that I think is equally effective and certainly worthy of consideration. We call it the picks and shovels approach. That's kind of a crazy name. What does picks and shovels have to do with crypto? Well, let me explain to you why we call it that. The phrase picks and shovels dates all the way back to the California gold rush. You were taught about that era. You know about it. You know, the 'Go West, young man' was the refrain, 'Make your fortune'. 

They discovered gold in the hills surrounding San Francisco, and there was a mad rush of people racing into the mountains in their effort to dig for gold and get rich quick. Well, among the thousands of young men who went to California to profit in the Gold Rush was a guy by the name of Levi Strauss. Another was a guy by the name of John Nordstrom. These two guys never dug for gold. They did something different. Levi Strauss sold blue jeans to the gold miners. John Nordstrom sold them all work boots. And as the story goes. Levi Strauss and John Nordstrom became the wealthiest of the entire gold rush without ever mining for gold. And that's where the phrase picks and shovels comes from.

Instead of buying Bitcoin, invest in the companies that are helping the bitcoin miners do what they do. Bitcoin miners have to buy computer gear. So let's invest in Nvidia, which makes the chips that go into that gear. Let's invest in the companies that are building the support systems. Let's invest in Coinbase, which is a digital assets exchange where people buy and sell bitcoin. Let's invest in banks that are providing loans to bitcoin miners and helping them buy the gear that they need. Let's invest in companies like IBM, which has a big blockchain division. Let's invest in the companies that are engaging in the picks and shovels instead of mining for bitcoin. We're going to engage in investments that are supporting the infrastructure and development of the technology. That's what Global X ETFs do.

There are three different versions depending on the kind of approach you want to take. 

1. The Global X Blockchain ETF, BKCH, which invests in companies that are helping to build, develop and support blockchain technology.
2. The Global X Blockchain and Bitcoin Strategies ETF, which does all of that, plus invests in bitcoin futures. That is symbol BITS.
3. And the Global X Metaverse ETF. The metaverse is the next big thing supported by tokenization, all of it based on blockchain technology. McKinsey says the metaverse is going to be a $5 trillion industry by the end of the decade. The Metaverse ETF is a way that you can invest in companies that are building and engaging in the metaverse.

Three different investment ideas, all within the subject of crypto, and none of them actually buying coins or tokens. You can learn more about these at GlobalXETFs.com or by talking to your financial advisor. 

And you can join me on another podcast later today, 1:20 p.m. Eastern time, I'll be appearing on The Briefing with Steve Scully talking about, you guessed it, crypto and Social Security. You can listen live on SiriusXM's P.O.T.U.S, Channel 124. and if you like what you're hearing, be sure to connect with me on my social media channels Facebook, Instagram, Twitter and YouTube. And don't forget to follow and subscribe on your favorite podcast app.

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