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The U.S. Securities and Exchange Commission (SEC) has rejected Cboe BZX's 19b-4 filings for two proposed spot Solana ETFs, causing the applications to be withdrawn from Cboe’s website. This decision followed discussions where the SEC reiterated its stance that Solana should be considered a security, a view the agency has maintained in various legal cases. The rejections halted the filings before they could be published in the Federal Register, meaning the approval process never began. Despite this setback, issuers like 21Shares and VanEck may refile or amend their applications to argue that Solana is not a security, with VanEck’s S-1 form still active.
Hong Kong Lawmaker Urges Legal Framework for DAOs After Mantra Court Case
Hong Kong legislator Johnny Ng has called for the government to establish a legal framework for regulating decentralized autonomous organizations (DAOs) following a recent court case involving Mantra DAO. The Hong Kong High Court ordered six defendants to disclose financial records related to the DAO after being accused of misappropriating its assets. Ng emphasized that regulating DAOs is crucial for positioning Hong Kong as a global Web3 hub. This case, which highlights issues of DAO ownership and governance, could set an important legal precedent for the Web3 industry.
US Spot Bitcoin ETFs Hit Lowest Daily Trading Volume Since Early February
U.S. spot Bitcoin ETFs recorded their lowest daily trading volume since early February, with just $779.87 million traded on Monday. This decline follows a peak daily trading volume of $5.24 billion on August 6. Despite $61.98 million in net inflows for Bitcoin ETFs, the market remains subdued, partly due to low investor sentiment and the impact of recent sell-offs. Spot Ether ETFs also saw reduced activity, with $124 million in daily trading volume and $13.52 million in net outflows, primarily from Grayscale’s Ethereum fund. The cautious approach from traditional finance towards ETH ETFs and regulatory concerns around Solana ETFs have contributed to the low trading volumes. Bitcoin's price rose to $60,935, while Ether increased to $2,672.
Trading Desk Insights
Bitcoin recently surpassed the $61,000 mark, only to face immediate selling pressure from investors eager to capitalize on the rise. Upon reaching its 50-day moving average, the price promptly retreated to around $59,000. As long as we remain below this key moving average, further declines toward the weekly lows appear likely.
The upcoming U.S. elections have generated significant speculation about their potential impact on global financial markets, particularly within the crypto sector. Notably, the so-called election expiry options on Deribit have seen a surge in open interest, exceeding $345 million, with over 60% focused on call options.
In the realm of U.S. ETFs, Bitcoin has experienced inflows of $62.1 million, marking its highest intake since August 8th. In contrast, Ethereum continues to see outflows for the third consecutive day, totaling $13.5 million.
A growing trend has emerged among Ethereum users, who are increasingly turning to private transactions, particularly through dark pools, to evade trading bots designed to front-run transactions. These transactions now account for approximately half of the total gas usage on the Ethereum network.
In the broader market, equities fluctuated on Tuesday as investors sought to sustain the momentum of a recent recovery rally. Major indices have rebounded, supported by a sharp decline in market volatility since the start of the month. Strong retail sales figures and a softer inflation report last week have alleviated concerns about the economy. Both the S&P 500 and Nasdaq have posted gains of over 1% for the month, highlighting the market's dramatic turnaround.
Wall Street is now closely monitoring signals ahead of the Federal Reserve’s upcoming policy meeting. Current pricing in Fed funds futures indicates a unanimous expectation of a rate cut in September.
Crypto Charts
Disclaimer
This research is for informational use only. This is not investment advice. Other than disclosures relating to Secure Digital Markets this research is based on current public information that we consider reliable, but we do not represent it is accurate or complete, and it should not be relied on as such. The information, opinions, estimates, and forecasts contained herein are as of the date hereof and are subject to change without prior notification. We seek to update our research as appropriate.
Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation. The price of crypto assets may rise or fall because of changes in the broad market or changes in a company's financial condition, sometimes rapidly or unpredictably. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur. Fluctuations in exchange rates could have adverse effects on the value or price of, or income derived from, certain investments. We and our affiliates, officers, directors, and employees, excluding equity and credit analysts, will from time to time have long or short positions in, act as principal in, and buy or sell, the securities or derivatives, if any, referred to in this research.
The information on which the analysis is based has been obtained from sources believed to be reliable such as, for example, the company’s financial statements filed with a regulator, company website, company white paper, pitchbook and any other sources. While Secure Digital Markets has obtained data, statistics, and information from sources it believes to be reliable, it does not perform an audit or seek independent verification of any of the data, statistics, and information it receives.
Unless otherwise provided in a separate agreement, Secure Digital Markets does not represent that the report contents meet all of the presentation and/or disclosure standards applicable in the jurisdiction the recipient is located. Secure Digital Markets and their officers, directors and employees shall not be responsible or liable for any trading decisions, damages or other losses resulting from, or related to, the information, data, analyses, or opinions within the report.
Crypto and/or digital currencies involve substantial risk, are speculative in nature and may not perform as expected. Many digital currency platforms are not subject to regulatory supervision, unlike regulated exchanges. Some platforms may commingle customer assets in shared accounts and provide inadequate custody, which may affect whether or how investors can withdraw their currency and/or subject them to money laundering. Digital currencies may be vulnerable to hacks and cyber fraud as well as significant volatility and price swings.
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