Morning Minute is a daily newsletter crafted by Tyler Warner. The insights and views presented are his own and do not necessarily mirror those of Decrypt. Be sure to check out our daily news show 'FOMO HOUR' for coverage of the latest stories and market movements.
Good morning!
Here are today’s key updates:
- Major cryptocurrencies experience a 3% decline, with BTC priced at $83.4k.
- Bitcoin ETF inflows remain strong, totaling $347 million in net inflows, exceeding $2 billion in just three days.
- CFTC Chair Mike Selig stated, “It’s go time” for the development of crypto regulations, particularly focusing on perpetual contracts.
- The Trump administration is considering initiatives to promote USD-backed stablecoins abroad.
- Variational has revealed details about its token generation event, including a 32% airdrop and a complete burn of its treasury.
⚖️ Selig Says ‘It’s Go Time’ for CFTC Crypto Rules
In the wake of the Senate's rejection of the Clarity Act, CFTC Chair Mike Selig declared on CNBC that the agency will proceed with drafting rules for crypto market structure. He emphasized that the CFTC’s existing statutory powers allow it to act independently of Congress.
The week following the failed vote has marked one of the busiest periods for U.S. crypto policy in years, all without the need for new legislation.
Both Selig and Atkins announced their intention to move forward within 24 hours of the vote. Since then:
- The SEC has greenlit a five-year Innovation Exemption, enabling tokenized U.S. stocks to trade on public blockchains without requiring exchange registration, effective immediately.
- A roundtable on 24-hour trading was held by the SEC, featuring participants from the NYSE, Nasdaq, and DTCC.
- The CFTC released a no-action letter allowing wallet applications to guide users to regulated derivatives without needing to register as brokers.
- A crypto custody proposal was sent by the SEC to the Office of Management and Budget (OMB).
- The CFTC submitted two prerules to the White House, concerning Regulation Crypto Asset Transactions and Regulation Crypto Asset Markets, under RIN 3038-AF80.
Selig’s comments extend beyond just crypto. He indicated that the agency needs to reassess all its regulations to adapt to the transition towards 24/7 on-chain markets driven by algorithms and automated finance. This suggests the CFTC anticipates regulating markets where trading is conducted by software rather than humans.
What are the implications of these changes? The CFTC can establish a designated contract market category, allowing exchanges to offer leveraged crypto trading under its oversight. However, it cannot claim jurisdiction over the spot market, which was the primary goal of the Clarity Act and still necessitates new legislation.
Thus, the focus remains on perpetual contracts. This development is significant for leaders in this sector, with Hyperliquid and Lighter emerging as clear beneficiaries (LIT reached an all-time high of $5.40 yesterday, while HYPE is just 1-2% off its all-time high). They appear set to receive full regulatory approval; it’s only a matter of time before announcements from these entities start rolling out as the CFTC advances its agenda.
🌎 Macro Crypto and Markets
- Major cryptocurrencies are down 2-3%; BTC -3% at $83.4k; ETH -3% at $2,650; SOL -3% at $113; HYPE -5% at $91; ZEC -10% at $1,485.
- Notable altcoin performers include LTC (+7%), Stable (+5%), and MORPHO (+4%).
- Oil rose by 2% to $93; Gold decreased by 0.7% to $4,290.
- Stock futures fell as yields reached new multi-year highs; DOW -0.3%, Nasdaq -0.9%.
- The Trump administration is deliberating an initiative to encourage dollar stablecoins to be used internationally, potentially through partnerships with private companies, to uphold the dollar's reserve currency status and enhance Treasury demand.
- Trump's financial disclosures revealed purchases of up to $115,000 in Strategy stock in July, along with Coinbase shares, while offloading MARA and CleanSpark, according to filings made public by the Office of Government Ethics.
- NYSE has entered into a memorandum of understanding with Blockchain.com to distribute tokenized U.S. stocks and ETFs through its planned digital alternative trading system, potentially reaching over 44 million accounts across more than 70 jurisdictions, pending regulatory approval.
- MoonPay is set to acquire North Capital for over $60 million in stock, which will enable it to establish tokenized real-world asset infrastructure by gaining SEC broker-dealer, transfer agent, trading, and advisory registrations.
- Kalshi has denied being investigated by the CFTC after reports suggested the agency was looking into its ether perpetual trading activities, with a spokesperson stating that the trading patterns are typical of liquidity incentive programs.
- Approximately $15.9 billion in Bitcoin options will settle on Friday, coinciding with ether’s quarterly expiry, with positioning leaning towards calls and a maximum pain point at $75,000, significantly below the current spot price near $85,500.
- Coinbase has introduced fixed-rate Bitcoin-backed loans, marking the first large-scale deployment of Morpho Midnight, allowing users to lock in rates and maturities on USDC borrowed against BTC, alongside a variable-rate book exceeding $1.4 billion.
Corporate Treasuries & ETFs
- Bitcoin ETFs recorded $347 million in net inflows on Wednesday; ETH ETFs saw $105 million, and SOL ETFs had $14 million.
Meme Coin Tracker
- Meme cryptocurrencies experienced declines of 5-10%; DOGE down 7%, SHIB down 8%, PEPE down 12%, PENGU down 11%, TRUMP down 11%, SPX down 14%, and BONK down 14%.
- Leaders from the Robinhood chain also faced declines of 10-20%; Pons down 12% to $420 million; AI down 15% at $225 million; Cashcat down 11% at $146 million; while Prism (+28%), Strategy (+40%), and IMDSTR (+70x) led the top movers.
- In Solana, the top movers included Mask (+14x), SI (+50%), GP (+66%), and Grok (+70%), while Ansem decreased by 12% to $150 million.
💰 Token, Airdrop & Protocol Tracker
- Variational has unveiled its tokenomics and details on its token generation event, which includes a 32% “genesis” airdrop for users and a 100% treasury buy-and-burn strategy.
- Hyperliquid led on-chain protocols with $2.12 million in daily revenue, followed by Pump at $1.83 million and Stonk at $958,000.
- Binance announced it will list HYPE for spot trading today at 2 PM ET.
- Stonk reported its sixth consecutive day of revenue exceeding $1 million, according to its own metrics.
🚚 NFT Market Update
- NFT leaders remained mostly stable after their recent gains; Punks unchanged at 34 ETH, BAYC up 1% at 6.89 ETH, and Pudgy stable at 3.51 ETH.
- Top movers included Identity MD (+14%) and OCH Ringbearer (+20%); Credits increased by 5% to 0.031.