Bitcoin ETFs Break 8-Day Losing Streak as Investors Turn Optimistic
Crypto catches a lift as Trump's election odds rebound ahead of his debate with VP Kamala Harris
After a stretch of eight consecutive days of outflows for the Bitcoin ETFs, investors poured money into the funds Monday to signal a shift in optimism during a busy week of economic data and politics.
Here’s what’s worth watching in crypto this week:
Trump & Harris Debate… Crypto?
Tuesday night brings the first debate between former President Donald Trump and VP Kamala Harris — and once again almost nobody expects crypto to be mentioned.
Bettors on Polymarket were giving crypto and Bitcoin about a 20% chance to come up as a debate topic. (That wouldn’t be surprising seeing as it wasn’t mentioned in the debate earlier this year between President Biden and Trump.)
However, Trump’s odds of an election win have been climbing over the last few days, with some increasingly saying that would be good for crypto. Ikigai Asset Management founder Travis Kling tells Coinage a Trump win would finally give the industry clarity.
“A Trump administration being the sort of saving grace for crypto, I do believe in that,” he said. “ It's not like [crypto] is going to go away if Harris wins, I don't think that at all, but it'll just be another period of time that's going to be much tougher sledding than if we have a Trump win.”
Congress Debates DeFi
Even if Trump and Harris don’t touch crypto in their debate, there was already enough debate going on in the House Financial Services Committee’s first ever hearing on DeFi.
The House Subcommittee on Digital Assets, Financial Technology and Inclusion got into their hearing titled “Decoding DeFi: Breaking Down the Future of Decentralized Finance.”
As expected, the hearing mostly included partisan talking points with Democrats mostly parroting the idea that DeFi enables tax evasion. Nobody hit that point harder than Congressman Brad Sherman, who said, “It will be thought to be stupid to pay income taxes when there is a whole system of finance that allows you to hide your assets while buying your yacht."
To be fair, billionaires already seem to have a fine time in TradFi not paying taxes, and no one betting on DeFi this year seems to be in a position to buy a yacht.
Inside the SEC’s War on OpenSea
The NFT world is still reacting to the SEC going after NFT trading platform OpenSea with its latest warning. And, it’s somewhat confusing why they are making such a big push to keep NFTs in their regulatory wheelhouse now considering SEC Chair Gary Gensler has always chosen to be vague on why collectibles would even fall into his agency’s purview.
In this week’s episode, we dug into how we got here — trying to figure out why buying a tokenized Beanie Baby or Pokemon card could constitute securities crimes — and why the SEC’s stance is so problematic for America:
FTX’s Caroline Ellison Sentencing Set
After complying with the Feds in their investigation into the FTX collapse that landed Sam Bankman-Fried behind bars, Caroline Ellison is next in line to face the music.
It’s unclear what tune that music might be, however, considering prosecutors made mention of how helpful her testimony was. Many legal experts, including Bernie Madoff’s former prosecutor, have said they don’t expect Ellison to receive jail time.
That might surprise some, considering how involved the former CEO of Alameda Research was in the scheme to bilk FTX users out of their funds. Her hearing is set for September 24.
The Fed’s Last Data Prints
The Fed is largely expected to cut interest rates by 25 basis points next week. And there are only a few data readings before the policy decision on Wednesday to account for. We’ll get two important readings this week.
First, the Consumer Price Index is out Wednesday morning and a day later, the BLS issues the August producer price index report — a measure used as a proxy for costs at the wholesale level.
Considering the Fed seems to be more focused on the labor market to judge the state of the economy at this point — rather than inflation — it’s unlikely either report will sway things too far in either direction. Still, you never know how the Fed’s thinking has changed until it’s official. Fed Chair Jerome Powell steps to the mic to do just that next Wednesday.
Bitcoin ETF Outflows Abate
After what was a tough, eight-day stretch of Bitcoin ETFs suffering millions in outflows, Monday finally showed a turn.
Monday’s $287 million in inflows for Bitcoin ETFs broke a record streak of outflows. CoinShares’ report on total digital asset fund flows showed last week carried the weakest performance since March, with more than $500 million in total net outflows.
We’ll see if investors continue to hit that U-turn to continue allocating to crypto this week.
Did we miss something?…
Let us know in the comments if you’re watching something else!
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