Act I : The AI Prophecy PriceACT

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🇩🇪GERMANY RAIDED 170 HOMES OVER ONLINE POSTS - IS THIS WHAT FREE SPEECH LOOKS LIKE NOW? Yesterday, police across Germany kicked down doors in 170 coordinated raids targeting so-called hate speech. The trigger? A 2018 law threatening social media companies with €50M fines if posts aren't deleted fast enough. Now the EU’s Digital Services Act is scaling that model - copying Germany’s homework and calling it regulation. Funny how “protecting democracy” keeps looking like preemptive censorship - with roots all the way back to the 1819 Carlsbad Decrees. Sources: Deutsche Welle, CEPS

U.S. SEC’s Hester Peirce dropped a hint about the possibility of in-kind redemptions for crypto ETFs, saying they were definitely on the horizon. Nasdaq submitted a Form 19b-4 on behalf of BlackRock in January, requesting the U.S. SEC to allow in-kind creations and redemptions for Bitcoin ETFs, a shift from the current cash-based system. Republican U.S. SEC Commissioner Peirce explained that in-kind creations and redemptions would allow ETF issuers to deliver and redeem fund shares using crypto assets directly, rather than cash, enhancing efficiency and reducing costs. She suggested that in-kind redemptions would allow investors to withdraw Bitcoin from an ETF to a private (self-custody) wallet. In December of 2023, the U.S. SEC met with all spot Bitcoin ETF issuers and asked them to remove any reference to “in-kind” redemptions from their filings and include “cash creates” only. However, Peirce hinted in December 2024 that in-kind redemptions may be coming to Bitcoin spot ETFs in 2025. Currently, most spot crypto ETFs operate using cash-based creation and redemption processes, which limit efficiency for traditional crypto participants. During a Bitcoin Policy Institute panel discussion, Commissioner Peirce confirmed that Form 19b-4 submissions were currently under review, acknowledging a high level of interest in the “in-kind” mechanism. However, she pointed out that although the industry was looking forward to this new model, she was not making any promises. In January, Bloomberg Intelligence ETF analyst James Seyffart argued that the in-kind creations and redemptions mechanism would increase trading efficiency for funds. BlackRock previously presented a plan for a “Revised In-Kind” model that could give the asset manager more flexibility should investors want to redeem their shares for the underlying asset. Vivian Fang, a Finance professor at Indiana University, said asset managers were familiar with the “in-kind” redemption model, adding that retail investors who wanted to redeem their shares would get their share of Bitcoin from BlackRock in return, which could then be turned into cash via a broker-dealer. “You want your one egg back, I’ll give you your one egg back, I don’t have to immediately care about how much that egg is selling for now, it can be $5, it could be $10, but I’m holding one egg for you and you’re getting one egg back when you want it.” -Vivian Fang, Finance Professor at Indiana University However, Fang explained that investors could still get cash back when redeeming their shares, no matter the model. She said the only difference was that the Bitcoin (or egg) had to be sold to raise that cash in the cash model. The U.S. SEC mandated a “cash redemption” model when the initial wave of spot Bitcoin ETFs received approval in January 2024. However, the agency announced in February this year that it sought comments on the proposal to allow in-kind redemptions. In May, the U.S. SEC launched proceedings to assess Nasdaq’s proposed rule change allowing in-kind creations and redemptions for BlackRock’s Bitcoin ETF. Nasdaq filed the proposed rule change on January 24, 2025, and it was published in the Federal Register on February 12, triggering an initial review period. On March 11, the SEC extended its decision deadline to May 13. The May 13 order formally instituted proceedings under Section 19(b)(2)(B) of the Securities Exchange Act of 1934. The U.S. SEC solicited public comments to evaluate whether these changes aligned with Section 6(b)(5) of the Act. In January, Cboe and VanEck also filed for in-kind creations and redemptions for their spot Bitcoin ETFs. In April, a BlackRock delegation led by the Head of Regulatory Affairs, Benjamin Tecmire, met with the U.S. SEC’s Crypto Task Force to iron out matters regarding the potential of allowing future in-kind redemptions and creations for crypto ETFs. However, Fang claimed that there was no difference between the cash model and the revised in-kind model from the investor’s point of view. KEY Difference Wire : the secret tool crypto projects use to get guaranteed media coverage

The US Treasury will continue using emergency accounting measures to prevent breaching the debt ceiling until July 24, 2025. This will allow lawmakers more time to solve the problem before funds run dry. Treasury Secretary Scott Bessent urged Congress to act before the August recess , warning that court decisions on Trump-era tariffs could accelerate the projected X-date. Bessent extended the period when the government can use “special accounting measures” to stay under the legal debt limit. The move allows the Treasury Department to temporarily shift funds between federal accounts and pause investments in certain government programs. Moreover, it enables the delay in issuing new debt as it extends the so-called “debt issuance suspension period” through July 24, 2025. Bessent sent a formal letter addressed to House Speaker Mike Johnson and other key congressional leaders before the previous suspension period’s expiration on June 27. This will help the government continue making payments without exceeding its borrowing authority . Bessent also repeated his warning in May and urged Congress to act quickly to raise or suspend the debt ceiling before lawmakers leave town for their scheduled August recess. He said these special measures do not solve the underlying problem, despite providing temporary relief. He also said the Treasury will shake investor confidence and damage the US government’s credit rating if it eventually exhausts its ability to pay the government’s bills on time. Bessent’s letter now puts more pressure on Republican leaders in both the House and Senate, who have been trying to finalize a massive tax and spending package but have failed due to internal disagreements over funding priorities. The Treasury may soon find itself without the tools to manage government payments. This could push the US closer to a financial crisis if these lawmakers don’t pass the package or delay action on the debt ceiling. The longer lawmakers delay, the higher the risk that markets will react with volatility and the harder it may become to calm public and investor fears. Bessent told reporters that the outcome of legal battles surrounding tariffs imposed during the Trump administration could affect the “X-date”. This is because these tariffs have become a significant source of short-term federal revenue. They generated an unprecedented $23 billion in customs duties to boost the Treasury’s cash reserves when the federal government operates under strict borrowing limits and relies on temporary accounting measures to stay solvent. However, a recent US Court of International Trade ruling determined that some of Trump’s tariffs exceeded presidential authority and lacked a valid legal basis. The Treasury may be forced to halt the collection of certain tariffs altogether. Thus, the government could also be required to issue refunds for duties it has already collected. These court decisions can affect the government’s cash position and ability to delay a debt limit breach using internal workarounds. The ripple effects could be a loss of incoming revenue and an actual outflow of funds at a time when every dollar counts. A sudden drop in this revenue due to court-ordered changes could bring the X date closer by weeks and leave Congress with far less time to act than current projections suggest. Meanwhile, the US Treasury Department hints that it may soon abolish the controversial “revenge tax,” as the international tax talks led by the OECD finally appear to be making real headway. Michael Faulkender, the deputy Treasury secretary, said that a global agreement could make a US proposal called Section 899 , which is its provision against countries with a digital tax, unnecessary. Section 899 is an addition to the Trump administration and is widely viewed as retaliatory. It would levy tax penalties on companies and investors in countries the US believes discriminate against American technology giants, like Google, Apple, and Amazon, with digital services taxes. Several US allies, such as Canada, France, and the United Kingdom, have adopted some of these taxes. KEY Difference Wire : the secret tool crypto projects use to get guaranteed media coverage

Bitcoin briefly dropped below $100,000 during the 12-day conflict involving Israeli and US strikes on Iran, along with retaliatory attacks on Israel and US bases in Qatar. Markets were shaken until US President Donald Trump confirmed that both Israel and Iran had agreed to a ceasefire. This announcement triggered a rebound in global risk sentiment. As investor confidence returned, Bitcoin began a fresh rally, breaking through the $106,000 level on Wednesday. New data suggest that the crypto asset could see a potential surge to $120K amid ongoing geopolitical uncertainty. Bitcoin could be poised for a sharp upward move, potentially reaching $120,000, after successfully reclaiming its 50-day Exponential Moving Average (EMA). According to CryptoQuant, the 50-day EMA is widely regarded as a critical technical indicator, and often serves as support during corrections in a broader bullish trend. Historically, when Bitcoin dips below this level and quickly regains it, the market tends to respond with a rapid 10-20% surge. This pattern is playing out again: following a brief pullback below the EMA, Bitcoin has closed above it for three consecutive days, which is indicative of a renewed bullish momentum. CryptoQuant explained that this recovery could kickstart a new leg up in the ongoing cycle. However, they caution that external geopolitical factors, particularly developments related to the US, Israel, and Iran, may inject short-term volatility into the market. In such an environment, traders should avoid excessive leverage and maintain a risk-managed approach. While technical indicators currently support a bullish outlook, broader macro and geopolitical uncertainty continue to pose potential headwinds. Despite this, the reclaim of the 50-day EMA remains a significant milestone for Bitcoin, which strengthens the case for a possible rally toward the six-figure mark. Beyond technical indicators, on-chain metrics also support Bitcoin’s current momentum, especially the behavior of short-term holders. The Short-Term Holder Realized Price (STH-RP), which now stands at $98K, continues to act as a key psychological and technical support for Bitcoin. As it edges toward $100K, each uptick reinforces six figures as the new perceived “fair value.” Bitcoin’s spot price is $106.4K, a 7.2% premium over STH-RP, which suggests reduced “froth.” Recent sharp bounces off STH-RP confirm a bullish structure, while long-term holders remain unmoved, with their cost basis at $32K. This veteran supply lock-up limits downside risk. As long as the crypto asset holds above STH-RP, the uptrend of higher lows and higher highs remains intact; a break below would signal a potential correction