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Republican political shift fuels $407 million in weekly inflows to crypto funds, CoinShares reports
Digital asset investment products saw $407 million in net inflows last week, driven by a political shift towards Republicans ahead of the U.S. presidential election, according to CoinShares. This marked a reversal from the previous week’s $147 million in outflows. CoinShares' Head of Research James Butterfill noted that investor sentiment has been more influenced by the U.S. elections than monetary policy, with inflows surging after a shift in polling favoring Republicans. U.S.-based funds accounted for nearly all the inflows, particularly into Bitcoin products, which gained $419 million. However, Ethereum funds continued to see outflows, with $9.8 million exiting globally.
Stripe Becomes First to Leverage Paxos' New Stablecoin Payments Platform
Stripe has become the first to utilize Paxos' newly launched stablecoin payments platform through its "Pay with Crypto" product. This platform allows businesses to accept stablecoin payments, offering instant conversions between USD and stablecoins like PayPal's PYUSD, Circle's USDC, and Paxos' USDP. Paxos' system enables seamless onboarding, pay-ins, conversions, payouts, and refunds, providing businesses a faster, more cost-effective alternative to traditional payment methods. The integration aims to help businesses expand globally while reducing payment costs. Paxos emphasized that stablecoins represent the future of efficient, global money movement.
Coinbase pushes for court order to obtain SEC documents on securities law interpretation in FOIA case
Coinbase has requested the U.S. District Court for the District of Columbia to allow it to file a motion for partial summary judgment in its ongoing Freedom of Information Act (FOIA) case against the U.S. Securities and Exchange Commission (SEC). Coinbase is seeking documents from the SEC regarding how securities laws apply to cryptocurrencies, particularly ether. This comes after Coinbase sued the SEC and the Federal Deposit Insurance Corporation (FDIC) in June for not complying with its FOIA requests. Coinbase wants access to internal and external SEC communications related to investigations into whether certain crypto assets are securities. The SEC initially claimed exemption from FOIA but later acknowledged that may not be the case, stating it could take three years to review the documents requested. The court’s ruling on whether Coinbase can file the motion is expected later this year.
Trading Desk Insights
Bitcoin has surged to over $67,000, marking its highest valuation since July 29th, buoyed by anticipation of further economic stimulus measures from China and a renewed correlation to former U.S. President Donald Trump's election prospects. The cryptocurrency is testing resistance within a descending channel that has been in place for seven months, delineated by trend lines from the highs of March and June and the lows of May and July. Open interest in Bitcoin is approaching record levels, predominantly fueled by institutional investors. The open interest weighted funding rate is now at a multi-month high, reflecting a bullish outlook in the short to medium term. Market sentiment on Polymarket gives Bitcoin a 64% chance of setting new records in 2024, an increase of 9% from last week.
In political betting markets, Donald Trump's odds against Kamala Harris have escalated, with his lead expanding to 13% on Polymarket, where the total volume on this bet has exceeded $1.6 billion. By comparison, the 2020 presidential election saw just under $11 million in wagers on the platform.
In the realm of crypto-financial products, Donald Trump's World Liberty Financial debuted its token today, with over 220 million WLFI sold in the first twenty minutes to more than 1,700 distinct wallets. The DeFi initiative is positioned as a crypto bank designed for borrowing, lending, and investing in cryptocurrencies.
MicroStrategy's net asset value premium relative to its Bitcoin holdings has climbed to its highest point in three years, now at approximately 2.7 times the firm's Bitcoin assets.
Turning to cryptocurrency ETFs, Bitcoin has witnessed substantial inflows, totaling $810 million over two sessions, with notable activity from Fidelity and ARK. Meanwhile, Ethereum attracted $17 million in inflows yesterday, predominantly from Blackrock.
China's economic strategy also remains a point of interest, as the Minister of Finance indicated the potential for increased debt issuance to stimulate economic growth, noting considerable leeway to expand the deficit, although specifics on size and timing remain undisclosed.
Crypto Charts
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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.
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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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