A stamp of approval.

Sometimes that comes in the form of a rancher sizzling a brand into a cut of top, USDA sirloin.

Sometimes it’s the manager of your GameStop tossing you the keys as he trusts you to lock up on your own for the first time.

Or maybe it’s the cool new kid wordlessly handing you a cigarette.

Approval feels good, but it feels even nicer to get it in writing.

And this week, we just may be seeing the first incremental sign of approval for an American Bitcoin Spot ETF.

But is this the real deal?

Espresso Shots

☕️ Gensler Speaks Out on ETFs

Chairman Gary Gensler has broken the SEC silence on Bitcoin Spot ETFs, claiming that a number are currently under review.

“What we have in front of us, just so that the viewing public understands, we have not one, but multiple; I think its eight or ten filings that the staff, and ultimately the commission, is considering,” Gensler said in an interview with Bloomberg Television.

Despite the prevalence of these ETF applications, Gensler has been notoriously anti-crypto and that doesn’t appear to be changing anytime soon.

At the 2023 Securities Enforcement Forum on October 25, Gensler delivered a speech entitled “Partners of Honest Business and Prosecutors of Dishonesty” during which Gensler remarked, “And don’t get me started on crypto. I won’t even name all the individuals we’ve charged in this highly noncompliant field.”

“Ugh, don’t even get me started,” Gensler remarked, as he dramatically crossed his legs and swirled a glass of boxed pink zinfandel.

☕️ Coinbase’s Opening Argument

Judge Katherine Polk Failla just granted Coinbase the right to an oral argument in the exchange’s ongoing legal battle against the SEC.

The oral argument will be permitted during Coinbase’s motion for judgment on the current pleadings.

The SEC is alleging that Coinbase has violated securities laws, while Coinbase is arguing that neither its tokens nor staking practices constitute investment contracts.

The court date for the oral argument is currently set for January 17, 2024.

Unofficially, Coinbase has tapped a sweaty, white-suited Southern lawyer for its oral argument. He’s a seasoned orator with a reputation for sweeping the “ladies and gentlemen of the jury” away with folksy, captivating metaphors about birds and civil responsibility.

☕️ Alexa For Kids

In an increasingly crowded AI market, Amazon has announced its intention to roll out a kid-friendly version of Alexa, the company’s popular AI assistant.

Explore with Alexa is a new, kid-friendly version of the AI, with a focus on both educational and child-appropriate responses.

“Our LLM stack makes it possible to adapt this vetted content into natural, kid-friendly responses with age-appropriate vocabulary,” Arjun Venkataswamy, Senior Product Manager of Alexa Kids, told Decrypt. “We first started with trivia questions because, aside from them being fun, they take advantage of a well-researched educational technique called ‘activating prior knowledge.’”

In addition to giving parents more time on their phones, Explore with Alexa will likely include stuttering and nervous, conversational redirects when children ask where babies come from.

Polled Brew

Spilling the Beans

Bitcoin Just Made Varsity 🏈 ✨

The world is full of lists, from that clipboard held by the bouncer at a club to Santa’s naughty-or-nice list.

But none of the lists really matter. It’s what they represent.

Exclusion or Inclusion.

And this week, Bitcoin spot ETFs have truly arrived on the scene by showing up on one of the most important lists in American finance.

On October 23, BlackRock’s iShares Bitcoin Spot ETF was listed on the NASDAQ’s Depository Trust & Clearing Corporation.

iShares inclusion seriously suggests a pending regulatory approval from the SEC.

And Eric Balchunas, the tweeter above, who is also an analyst for Bloomberg, went as far as to suggest that BlackRock may already have gotten a green light from the SEC, but had yet to publicly announce it.

And we’d be ready to believe that. Even if the BlackRock listing isn’t the indicator, it certainly seems to represent a step in the right direction.

But then there was an interesting, disquieting development on Tuesday, when the SEC slapped BlackRock with a $2.5 million penalty for improperly disclosing and misrepresenting a publicly traded fund it advises.

A multi-million dollar lawsuit doesn’t seem like the actions of a regulatory body ready to greet a Bitcoin Spot ETF with a warm, approving hug.

But in some ways, this has become the SEC’s modus operandi. The SEC seems to take wild, flailing, legislative action when it doesn’t get what it wants.

We saw it in the Ripple ruling, and this could just be the latest iteration.

The SEC moves in mysterious ways, that’s part of what’s made crypto’s position so difficult in America. We can be relatively sure that when these spot ETFs start getting approval, it won’t be because the SEC made it easy or straightforward.

But while we’re discussing approval, as exciting as this development is, we couldn’t help but feel a little surprised that it was BlackRock, not Grayscale, that has come out as the leader of the pack.

Grayscale currently has the Grayscale Bitcoin Trust, an active trust on which investors can purchase shares of Bitcoin at a discounted price.

Grayscale is looking to convert that trust into a spot ETF. Even from the outside looking in, you’d surely assume that’s a simpler process.

And even without this existing framework, Grayscale enjoys an accelerated filing status, which surely should put it in the lead in the spot ETF race.

But it could simply come down to the fact that BlackRock has more weight to throw around.

BlackRock, with more than $9.4 trillion in assets, is the largest money manager in the world. Turns out, money doesn’t just talk, it might speed walk through regulatory approval.

But despite the titanic presence of these firms, they’ll still have to contend with crypto’s bane, the SEC.

The SEC hasn’t made any step of crypto regulation easy, and while we’re as frustrated as anyone at this current regulatory purgatory, it’d almost be disappointing if the SEC threw in the towel now and made things easy.

Bitcoin Spot ETFs have earned their seat at the cool kids' table, no matter how much the SEC has tried to tease them or tell them they’re nobodies.

But if Bitcoin Spot ETFs and the SEC can’t squash this beef before homecoming, there’s only one way to settle this: a race for pink slips around Dead Man’s Curve.

Crypto 101

Proof-of-Reserves: This is the process of verifying that an exchange’s customer assets are proportional to the amount of reserves that a company holds on the customer’s behalf.

The improper balancing of reserves and customer assets leads to massive problems, such as we’ve all become familiar with in the FTX scandal.

The failures of exchanges such as FTX, Alameda, and Three Arrows Capital, have increased the call for transparency and more thorough proof-of-reserves protocols for crypto’s future.

The Last Sip

The Last Sip: In addition to giving parents their own nap time and providing an AI version of the Birds and the Bees chat, Explore with Alexa is revolutionizing education by answering one burning question: What if we could make home-schooled kids even less socialized?

Stay Caffeinated,

Coffee & Crypto Team

That's all for today! If this email got you hooked on our unhinged crypto takes, be sure to get a full dose on Twitter @GetCoffeeCrypto.

Want cutting-edge market analysis delivered to your inbox three times a week? Sign up for Premium Roast! We'll cut through the BS floating around on Twitter and CNBC and help you finally understand the markets, all for the price of a single cup of coffee.

If you find yourself smiling at any of our dumb jokes, or even *learning* something - make sure to share this newsletter with your friends!

If you get 5 friends to sign up - or even enemies, we don't care - we'll send you our Bitcoin Bootcamp Ebook! This thing is packed with info and is the ultimate guide to the world’s ultimate currency.

Just hit the Click to Share button in the section below to get started!

DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.