Morning Minute is a daily newsletter written by Tyler Warner. The analysis and opinions expressed are his own and do not necessarily reflect those of Decrypt.
Good morning!
Here are the major headlines for today:
- Major cryptocurrencies show mixed results ahead of the CPI release, with ETH taking the lead; BTC is priced at $64,000.
- The SEC is set to advance its crypto rulemaking process on Friday, focusing on tokenized securities.
- Robinhood Chain has reported a revenue that is ten times greater than Base, with its total value locked (TVL) nearing $500 million.
- A security breach on Harmony resulted in 26% of its supply being minted.
- The CFTC has exercised emergency powers to ensure Kalshi can continue operations in New York State.
⚖️ CFTC Protects Kalshi From New York's Legal Actions as Revenue Surges
The federal authority has stepped in to prevent a state from shutting down a prediction market.
On Tuesday, the Commodity Futures Trading Commission (CFTC) invoked its "emergency authority" to allow Kalshi to keep its operations running in New York, just days after Attorney General Letitia James filed a lawsuit aimed at halting its sports contracts. Kalshi requested the intervention, and the CFTC complied.
The implications are significant. As reported by The Information, Kalshi has exceeded a $4 billion annualized revenue run rate, doubling its figures from two months prior, and is currently valued at $40 billion. This growth has prompted states to seek more control just as the company is becoming one of the fastest-growing entities in the financial sector.
New York contends that sports prediction markets are a form of gambling that evade state licensing and taxes, which are essential for funding educational programs and addressing gambling issues. Conversely, the CFTC argues these are federally regulated swaps. Chairman Mike Selig, a Trump appointee with a favorable view of cryptocurrencies, stated, "Congress did not intend for derivatives exchanges to be regulated under a patchwork of state gaming laws," accusing New York of attempting to restrict these contracts under stringent state regulations. He emphasized that these markets operate across state lines, thereby limiting New York's regulatory authority.
This marks the CFTC's third intervention on behalf of Kalshi, following similar actions in Michigan, and it has also filed a lawsuit against New York. However, the underlying legal disputes remain unresolved, and a judge has previously ruled against Kalshi's request to dismiss the lawsuit. Meanwhile, Kalshi continues to report increasing revenue and higher valuations.
The entire situation hinges on a critical question: does a federal license permit these platforms to operate nationwide, or can individual state regulators impose vetoes? The CFTC has firmly supported the former, and with Kalshi's revenue growth, both sides have substantial financial stakes in the outcome.
🌎 Macro Crypto and Markets
- Major cryptocurrencies are stable ahead of the CPI release; BTC is down 0.2% at $64,000; ETH is up 1% at $1,910; SOL is up 1% at $77; HYPE is up 0.4% at $55.80.
- Top altcoin movers include CC (+5%), CRV (+4%), and NEAR (+3%).
- Oil prices have increased by 1% to $83; Gold is up 0.7% at $4,470.
- Stock futures show slight gains ahead of the CPI; DOW is up 0.1%, Nasdaq is up 0.6%.
- The SEC has scheduled a meeting for August 14 to discuss "Regulation Crypto," its first official rulemaking for the crypto sector, which would allow projects to raise funds without registering as securities and exit SEC oversight once they achieve decentralization, responding to the Senate's delay on the CLARITY Act.
- Strategy's credit model sets STRC's under-collateralization threshold at $16,184 and its total debt-and-preferred floor at $20,587, indicating Bitcoin would need to drop approximately 68-75% for the structure to fail, according to data shared by Saylor.
- Trump Media's venture into crypto resulted in a $238 million quarterly loss, as the firm behind Truth Social recorded significant markdowns on its digital asset investments and prediction market initiatives that it has recently abandoned.
- Crypto-friendly bank Erebor is negotiating to secure $1.5 billion at a $9.5 billion valuation, according to the Financial Times.
- MoneyGram has expanded its services on Solana, offering a global crypto-to-cash service that enables users to convert stablecoins into physical cash through its international agent network.
- Exchange spot volumes dropped 21.7% in July to $429 billion across 14 major exchanges, with all exchanges seeing a decline month-over-month; Binance led with $196.5 billion (45.8% of the total), followed by OKX and Bybit.
Corporate Treasuries & ETFs
- Bitcoin ETFs gained $8 million in net inflows on Tuesday, while ETH ETFs experienced $1.7 million in outflows.
- Fidelity is enhancing its ETH ETF, FETH, valued at $900 million, by adding staking and quarterly cash distributions, staking up to 100% of holdings and distributing net rewards to investors while retaining 85% of gross rewards.
Meme Coin Tracker
- Meme coins showed varied performance; DOGE is up 2%, SHIB is steady, PEPE is down 1%, PENGU is down 2%, TRUMP is down 2%, and BONK is down 4%.
- Robinhood Chain was led by HMM (+100%) and AI (+40%), while other top performers saw declines.
- Solana projects included Plumber (+35x), Alon (+20%), and Jimothy (+36%); Stonk briefly reached a new all-time high at $15 million following a Solana retweet (currently back at $12.5 million).
💰 Token, Airdrop & Protocol Tracker
- Robinhood Chain is currently generating 10 times the revenue of Base, with its TVL approaching $500 million.
- Harmony faced an unauthorized minting of 4 billion ONE, which constitutes about 26% of its total supply, causing the token's value to plummet as 2.8 billion were sold on exchanges; the network is seeking to implement freezes and a potential rollback.
🚚 NFT Market Updates
- NFT market leaders showed slight declines; Punks are down 1% at 31.7 ETH, BAYC is unchanged at 8.17 ETH, Pudgy is down 1% at 3.92 ETH, and Stonkbrokers fell 7% to 12.5 ETH.
- Cash Cats (+155%) and Normies (+65%) were the top gainers.
- The new project Yardkeepers launched with a floor price of 0.7 ETH (YARD token valued at $4 million).
- The FWA team has introduced user profiles and a chat application, with personal pools set to debut soon; FWA reached a valuation of $40 million and a new all-time high before retracting to $31 million.