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New Law Gives US President Authority to Restrict Digital Asset Access
A new U.S. law grants the president extensive authority to block access to digital assets, sparking concerns over its broad implications and potential user impact. The law's sweeping powers allow the president to block transactions involving digital assets with foreign entities supporting terrorism, potentially pushing users towards Know Your Customer (KYC)-compliant and regulated blockchains. Critics, including Scott Johnsson, argue that this could lead to significant control over digital assets. The law, incorporating elements from the Terrorism Financing Prevention Act, defines digital assets broadly and aims to address emerging threats involving these assets.
EigenLayer's TVL Exceeds $20 Billion Milestone for the First Time
EigenLayer's total value locked (TVL) has surged to $20.09 billion, making it the second-largest DeFi protocol after Lido. The protocol, which allows users to deposit ether and various liquid staking tokens to secure third-party networks, has seen significant growth from $1.4 billion at the start of the year. Its TVL jumped from 2.93 million ether ($10 billion) in March to 5.21 million ether ($20 billion) recently, driven by increased inflows and rising ether prices. EigenLayer's mainnet launched in April, and following community backlash over low airdrop allocations, the Eigen Foundation expanded these allocations, leading to increased deposits. The protocol is currently in its second stakedrop season, with 15% of its 1.6 billion token supply allocated for user distribution across several seasons.
Paxos International Debuts Yield-Bearing Stablecoin Lift Dollar (USDL)
Paxos International has introduced Lift Dollar (USDL), a yield-bearing stablecoin, with its first market launch in Argentina. USDL, which offers a yield of about 5%, is issued on Ethereum and backed one-to-one by U.S. dollars and high-quality liquid assets. It is regulated by the Financial Services Regulatory Authority of Abu Dhabi Global Market. USDL will be available through platforms like Ripio, Buenbit, and TiendaCrypto. The stablecoin aims to provide "risk-free" returns and is designed to support unbanked or underbanked individuals. USDL is not available in the U.S. and several other jurisdictions. Paxos believes the stablecoin market could grow 20 times in the next five years, capturing significant market share.
Trading Desk Insights
Bitcoin appears poised for a potential surge towards historic highs, with a mere 4% gap remaining. Market sentiment suggests a favorable outlook for the crypto space under a Trump administration, prompting Standard Chartered to revise their BTC price target to $150,000 by year-end under such circumstances. In the near term, projections by the UK bank indicate a potential climb to $80,000 contingent upon Friday's nonfarm payrolls report significantly underperforming expectations.
In the realm of US BTC ETFs, recent activity reflects continued investor interest, with a notable influx of $488.1 million, spearheaded by Fidelity and Blackrock contributing $220.6 million and $155.4 million respectively.
Robinhood Markets, in a strategic move towards expanding its digital asset portfolio, has disclosed its acquisition of cryptocurrency exchange Bitstamp for approximately $200 million in cash, marking its largest deal to date. This transaction positions Robinhood in direct competition with major industry players like Binance and Coinbase, leveraging Bitstamp's extensive global presence with 50 active licenses and registrations.
The landscape of meme coin investments has witnessed a surge in institutional holdings since January, particularly in DOGE, SHIB, and PEPE, reaching a pinnacle in April before experiencing a slight downturn in institutional allocations.
In the mining sector, post-halving activity has seen an uptick in mergers and acquisitions: - Core Scientific's shares surged following reports of a significant artificial intelligence deal and a potential acquisition offer from CoreWeave. - Riot Platforms recently made a hostile bid to acquire Bitfarms - Bitdeer is poised to acquire asic chip designer Desiweminer in a $140 million all-stock deal, anticipating immediate product releases stemming from integrated technologies between the two entities, backed by a recent $150 million investment from stablecoin company Tether.
Stock futures exhibited minimal movement on Thursday morning, following the S&P 500's attainment of a new record closing high. Nvidia's rally propelled it past Apple to become the second-most valuable public U.S. company with a market valuation of $3 trillion, fueled by the unveiling of its next-generation AI chips dubbed "Rubin."
The European Central Bank's decision to cut rates for the first time since 2019 intensifies pressure on the Federal Reserve to potentially recalibrate its perceived restrictive policy stance. While the Fed's upcoming rate decision is anticipated to maintain the status quo, increasing speculation suggests a likelihood of rate cuts in September, with Friday's nonfarm payrolls report for May serving as a key indicator for potential Fed actions amidst observations of a softening labor market.
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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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