Ben Strack

Casey Wagner

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<h2 class="wp-block-heading">The state of crypto ETFs: Permissionless edition</h2>



We’ve already noted there has been plenty of <a href="https://blockworks.co/news/empire-newsletter-permissionless-crypto-regulation">regulatory talk</a> at Permissionless.&nbsp;



ETFs were also a major point of discussion following the milestone launches of US spot <a href="https://blockworks.co/news/sec-approves-bitcoin-etf">bitcoin</a> and <a href="https://blockworks.co/news/ether-etfs-approved-for-us-exchange-july-23">ether</a> funds in January and July, respectively.&nbsp;



The bitcoin ETF chatter focused, in part, on the buyers driving the so-far $18.6 billion of net flows into the segment.



“The industry had an expectation that was summed up by: ‘Here come the boomers,’” Bianco Research’s Jim Bianco said during a panel discussion. “I don’t think it’s really been that at all.”



Rather, he and fellow panelist Bloomberg Intelligence analyst James Seyffart, noted that a large <a href="https://x.com/biancoresearch/status/1802764031415271586">chunk</a> of that money has come from existing digital wallets.



Indeed, Samara Cohen, BlackRock’s CIO of ETF and index investments, noted that 75% of buyers of the iShares Bitcoin Trust (IBIT) had never bought an iShares product before — signaling many IBIT holders are more crypto native investors.&nbsp;



While a number of wealth managers have <a href="https://blockworks.co/news/advisers-bitcoin-etfs-client-portfolios">jumped into</a> these products, many more remain on the sidelines. Morgan Stanley has <a href="https://blockworks.co/news/on-the-margin-newsletter-morgan-stanley-bitcoin-adoption">allowed</a> its financial advisers to offer the BlackRock and/or Fidelity bitcoin ETFs to certain clients, but other wirehouses have not yet followed suit.



“Really what they want to look at is who are the right investors, what’s the right level of liquidity needs, risk tolerance…and what’s the role bitcoin might play in a portfolio so they can recommend an appropriate allocation,” Cohen said. “That’s not a trivial exercise with relatively limited trading data and a pretty interesting market backdrop over the last few years.”&nbsp;&nbsp;&nbsp;&nbsp;



Seemingly more involved than wealth managers in bitcoin ETFs right now are hedge funds that are executing basis trades, Permissionless speakers have noted. That means they are taking positions in both the BTC spot and futures markets in a bid to profit from price differences.



As for the spot ether ETFs, Seyffart acknowledged his flow estimate for those funds (at between 15% and 25% those of the BTC funds, in the first year) appears to have been “way too bullish.”



Those US ETH products have so far seen net outflows amounting to $548 million.



A few reasons for this include the product launches occurring during the summer “doldrums,” ETH’s <a href="https://blockworks.co/news/tough-ethereum-vibes">price trajectory</a> around the launch and the need for <a href="https://blockworks.co/news/education-required-to-spur-eth-etf-outflows">more education</a> around the asset.&nbsp;



And, of course, the ETFs can not yet <a href="https://blockworks.co/news/proposed-ether-etfs-not-staking-eth">stake</a> the ETH that they hold.&nbsp;



“People who understand this and are staking their ETH would never go to an Ethereum ETF because you’re giving up that 3% or 4% yield,” Seyffart said. “You lose more utility by taking Ethereum and putting it in an ETF wrapper than you do taking bitcoin and putting it into an ETF wrapper.”



— Ben Strack



<h3 class="wp-block-heading">13.75%</h3>



The amount MicroStrategy shares were up on Friday, as of 2:15 pm ET. The business intelligence firm’s stock price is now at a 52-week high.



The run-up comes as MicroStrategy founder Michael Saylor announced plans to launch a bitcoin bank during a recent interview with research firm Bernstein. MicroStrategy currently holds 252,220 BTC.



<h2 class="wp-block-heading">Did You Notice</h2>



Happy Friday! Inflation data this week came in above expectations, painting an uncertain picture as investors and analysts continue to <a href="https://blockworks.co/news/btc-uptober-market-odds">speculate</a> about what we might see from the Fed in November. Here are the highlights:&nbsp;



<ul class="wp-block-list">
<li>Thursday’s CPI report came in hotter than expected. As Felix said <a href="https://blockworks.co/news/forward-guidance-newsletter-hot-inflation-data">yesterday</a>, the report wasn’t smoking hot, but left much to be desired. We’ll call it warm. Core CPI rose 0.3% month over month, vs. the 0.2% that analysts expected. Annually, core CPI came in at 3.3%, just above the forecasted 3.2%. Same with headline CPI, which was up 0.2% from the prior month and 2.4% year over year, compared with 0.1% and 2.3% expected, respectively. </li>



<li>Friday’s PPI report showed core PPI inflation rose to 2.8% annually. Analysts had called for 2.7%. The monthly increase for the core index showed a 0.2% increase in line with forecasts. Neither the PPI nor the CPI are the Fed’s top inflationary gauge, but they are still important data points to note. </li>



<li>The University of Michigan published its Survey of Consumers on Friday, showing sentiment dropped 1.7% from September to October. At the same time, near-term inflation expectations increased to 2.9%. It’s the highest inflation expectation we’ve seen since the summer. </li>
</ul>



— Casey Wagner



<h2 class="wp-block-heading">Bulletin Board&nbsp;</h2>



<ul class="wp-block-list">
<li>Coinbase Chief Policy Officer Faryar Shirzad said during a Permissionless panel that Donald Trump is “very committed to the crypto issue” and that the Harris campaign “has done a really good job in beginning to talk to us.” We asked the executive about some other things; check <a href="http://blockworks.co">Blockworks.co</a> next week for our full interview with Shirzad.</li>



<li>Bitcoin’s price surged above $62,900 by 2 pm ET — up more than 4% from 24 hours prior.  </li>



<li>After notching $245 million of net inflows on Monday, the US-listed spot BTC funds endured three straight days of outflows this week (amounting to a combined $140 million), Farside Investors <a href="https://farside.co.uk/bitcoin-etf-flow-all-data/">data</a> shows. <a href="https://farside.co.uk/ethereum-etf-flow-all-data/">Flows</a> into the US ETH products have been roughly flat since Monday. </li>



<li>Permissionless is wrapping up today, but Blockworks’ DAS is coming back to NYC from March 18-20, 2025! Early bird tickets are <a href="https://blockworks.co/event/digital-asset-summit-2025-new-york">available now</a>.</li>
</ul>



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Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



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Crypto ETF takes from the Permissionless stage

Felix Jauvin

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<h2 class="wp-block-heading">Structural sticky inflation is here&nbsp;</h2>



Today’s inflation data tells a story of sticky prices that are going to have a lot of trouble coming down and getting us back to the 2% target.&nbsp;



Off the top, the key data points vs. expectations:



<ul class="wp-block-list">
<li>Core CPI MoM: 0.3% actual, 0.2% expected</li>



<li>Core CPI YoY: 3.3% actual, 3.2% expected</li>



<li>Headline CPI MoM: 0.2% actual, 0.1% expected</li>



<li>Headline CPI YoY: 2.4% actual, 2.3% expected</li>
</ul>



As we can see, the CPI print was hot. Not smoking hot, and also not because any major outliers drove it higher. What we’re seeing is really just a broad-based inability for inflation data points to meaningfully move lower.



Before digging into the hot points, let’s quickly run through what accounts for 55% of this month’s inflation: shelter.



Following a rebound last month, owner-equivalent-rent and primary rents both continued their trajectory lower, leading to shelter inflation coming in at 0.22% MoM vs. expected 0.46%. By all accounts, this was a positive outcome for disinflation.&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdt7ccAM23USZ7WS3MDujDSesbV1kt6R84kh93rvFctWoErOd42OGkBLB1saG5cU6CPKWNGVcK0Hl9C7Lm7FIDyu5pCQu3Jz7OL5kuQknS9XW_Pl2sYnWcMm9a8mS1x5SCypfBbL9P-DcAwCVLN-3d1Xqvw?key=0JUZeaMwPbST8WRCQEVVkA" alt=""/></figure>



That’s about as far as we can go in terms of positive data points in today’s print.



The big red flag is that core goods rebounded higher at 0.17% vs. the anticipated 0.02%. Goods MoM deflation has been the core driver of the disinflation story we’ve seen this year and which has allowed the Fed to cut with confidence. So if we’re beginning to see a rebound in goods inflation, that will be a concern.



Overall, today’s CPI print paints a picture of sticky inflation, but not re-acceleration. I think this print will still allow the Fed to cut by 25 basis points in November, but 50bps is surely off the table at this point.



— Felix Jauvin



<h3 class="wp-block-heading">$24&nbsp;</h3>



The price target (in CAD) for Galaxy Digital, according to a Thursday note from HC Wainwright &amp; Co., which started covering the stock. The company’s share price closed at $17.73 CAD on Wednesday.&nbsp;



Galaxy is one of just two diversified crypto-focused public companies (outside of the bitcoin miners) with a market cap of more than $1 billion, the analysts wrote. And an expected sharp crypto rally starting in Q4 could be the single biggest driver of a Galaxy stock price increase.



The HC Wainwright &amp; Co pros added: “Further, institutional understanding and adoption of digital assets has never <a href="https://blockworks.co/news/on-the-margin-newsletter-inevitable-institutional-digital-assets-involvement">been greater</a>, and we see a wave of incremental <a href="https://blockworks.co/news/forward-guidance-newsletter-vaneck-vc-fund">institutional capital </a>pouring into the space in the coming years, further amplifying the upcoming bull market.”&nbsp;



<h2 class="wp-block-heading">On the ground at Permissionless&nbsp;</h2>



Day two of Blockworks’ Permissionless was in progress when this newsletter went out, but let’s take a look at some of what people were talking about on day one.&nbsp;



There seems to be a calm before the storm. And we’re not talking about Hurricane Milton (our thoughts are with everyone in the affected areas and their loved ones), but rather the seeming holding pattern as we await the Nov. 5 <a href="https://blockworks.co/news/political-candidates-cannot-ignore-crypto-voters">presidential election</a>.&nbsp;



The need for regulatory clarity was mentioned a lot. That’s not really new, but it is even more highlighted given we’re now just 26 days from the big day.&nbsp;



Casey <a href="https://blockworks.co/news/forward-guidance-newsletter-vaneck-vc-fund">mentioned</a> some of House Majority Whip Tom Emmer’s thoughts yesterday about how the presidential election could impact the crypto industry’s trajectory.



Coinbase CLO Paul Grewal said during the same panel that he’s looking beyond just the Donald Trump-Kamala Harris match-up. “Congress is going to matter a lot here, regardless of who’s elected as president,” he said.&nbsp;&nbsp;&nbsp;



During a session later in the day, Lumida CEO Ram Ahluwalia argued that Harris — who he called the “presumptive leader of the Democratic party today” — could terminate SEC Chair Gary Gensler before the election if she wanted to.&nbsp;



But he expects to see “status quo” if Harris is elected, implying no quick change in SEC leadership would be made.



While Donald Trump has vowed to <a href="https://blockworks.co/news/donald-trump-speaks-bitcoin-2024">fire Gensler</a>, Harris has shared some <a href="https://blockworks.co/news/kamala-harris-crypto-policy-reset-outlook">pro-crypto comments </a>without noting how she might address the agency’s current leadership.&nbsp;



Clearing out the leaders with negative views of the industry should be positive for an agency that overall realizes the crypto industry’s value to capital markets and American innovation, said Bitwise’s Juan Leon.



But, he added in a panel alongside Ahluwalia: “I don’t think it’s as black and white as people in this industry seem to be thinking. Really what matters is the <a href="https://blockworks.co/news/house-passes-act-fit21-with-bipartisan-support">bipartisan support</a>, which is there.”



While regulation was mentioned in some shape or form in nearly every panel I listened in on, some other points worth noting strayed from strict policy.



In a panel on the future of bitcoin mining, Marathon Digital CEO Fred Thiel seemed to question the strategy of industry rival Core Scientific, which this year has <a href="https://investors.corescientific.com/news-events/press-releases/detail/78/core-scientific-announces-new-contract-with-coreweave-for-delivery-of-approximately-70-mw-of-additional-infrastructure-to-host-high-performance-computing-operations">inked</a> high-performance computing (HPC) <a href="https://blockworks.co/news/post-bitcoin-halving-mining-strategies">hosting contracts</a> with cloud-computing firm CoreWeave.



Core Scientific has said it projects more than $4.7 billion in cumulative revenue over the 12-year timeline of the CoreWeave contracts.



But Thiel argued: “That’s a race to zero,” noting that competition in the arena of renting rack space will ultimately hurt margins.&nbsp;



And we can’t not mention the world’s largest asset manager being in the building.&nbsp;



Samara Cohen, BlackRock’s CIO of ETF and index investments, said we are in “act one” in terms of institutional crypto adoption. This theater analogy came in lieu of the baseball-focused “early innings” line you typically hear (though Let’s Go Mets, am I right?).&nbsp;



While hedge funds and other asset managers have been jumping in, there remains “a fair amount of plumbing” needed to unlock others’ ability to buy bitcoin (namely pensions and endowments).&nbsp;



Outside of regulation, investment guidelines consideration and board approval are other hurdles to clear for those asset allocators.&nbsp;&nbsp;



“These things take a longer period of time…and this is a process that is underway,” Cohen said.



— Ben Strack&nbsp;



<h2 class="wp-block-heading">Bulletin Board&nbsp;</h2>



<ul class="wp-block-list">
<li>The SEC on Thursday charged crypto market maker Cumberland DRW with acting as an <a href="https://blockworks.co/news/sec-charges-cumberland-unregistered-dealer">unregistered dealer</a>. Regulators <a href="https://www.sec.gov/files/litigation/complaints/2024/comp-pr2024-168.pdf">allege</a> the Chicago-based firm has been “operating as an unregistered dealer in more than $2 billion of crypto assets offered and sold as securities.” In a statement posted on X, Cumberland expressed frustration with being the SEC’s “latest target” and pledged to defend itself “against overzealous regulators.” </li>



<li>Initial jobless <a href="https://www.dol.gov/ui/data.pdf">claims</a> released Thursday showed 258,000 first-time filers for the week ended Oct. 5, marking the highest weekly initial claims since August 2023. Analysts had expected 230,000. </li>



<li>Permissionless III continues! Check out the day one recap from Blockworks editor Katherine Ross <a href="https://blockworks.co/news/permissionless-3-day-one-vibes">here</a>, and keep an eye on Blockworks.co for the latest updates. </li>
</ul>



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Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



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Latest inflation data comes in hotter than expected, led by housing costs

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<h2 class="wp-block-heading">VanEck goes into venture</h2>



An asset manager with a crypto bent is doubling/tripling/quadrupling down — whatever you want to call it — on the sector.&nbsp;



VanEck brought to market a bitcoin futures ETF in late 2021, following that up with a similar ETH offering in October 2023. It later chose to <a href="https://blockworks.co/news/vaneck-closing-ether-futures-etf">shutter both those funds</a> once the SEC approved products that would hold BTC and ETH directly.



To that point, it was among the firms that debuted spot bitcoin and ether ETFs in the US in January and July, respectively.



VanEck (managing about $108 billion in assets) said today that it will now try its hand at venture capital via a $30 million fund focused on crypto, fintech and AI startups.&nbsp;



Known for its interaction with other X users and its witty one-liners, the VanEck account got real with us:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdwFFLjlc0dvhctBtdM1EMTdKYruCZbNBNTDfKL32a7UIThRHNB-YVJ2XRC_hw4KdjRMC6QiyOY_DXX5MS2-YIxUI47WoV8gVQXg2NDku3vPEes01bSvGgctQEW3ykrmuxiTrUHo2LejrNVl3tNNyUncx_-?key=5uwD7y2AfBzqD_ucUUgfYw" alt=""/></figure>



It’s worth mentioning that leading the fund will be Wyatt Lonergan and Juan Lopez, who formerly led the venture division of USDC issuer Circle.



Stablecoins could be “the ChatGPT moment” for crypto and act as the so-called killer app that brings blockchain to the masses, Lonergan told me in an email. Put another way, he added, the innovations spurred by stablecoins could lead to a “Cambrian explosion” of onchain fintech products across payments and capital markets.



“The infrastructure is battle-tested and ready — as an example, stablecoins will settle $24 trillion in volume this year,” Lonergan said. “And therefore we want to invest in the middleware and applications that enable that volume and capture the most value in the long term.”



Then there are tokenized asset platforms proliferating, noted Lopez.&nbsp;



Just look at <a href="https://blockworks.co/news/visa-to-help-banks-test-tokenized-assets-smart-contracts">Visa’s recent bid to help institutions</a> issue fiat-backed tokens and test out their use cases. Spain-based BBVA has been working with the payments giant to do just that (on a testnet blockchain) and looks to launch a pilot with select customers on Ethereum in 2025.



“These types of applications and marketplaces will enable new demand for blockchain technology and capture the most value over the next five to 10 years,” Lopez said.



From ETFs to venture funding, VanEck will no doubt be a firm to watch as the segment evolves. It wouldn’t be surprising to see other similar firms widen the ways they get involved in crypto and adjacent industries. 



— Ben Strack



<h3 class="wp-block-heading">75%</h3>



The percentage of buyers of BlackRock’s iShares Bitcoin Trust (IBIT) that never owned an iShares ETF before.



Samara Cohen, BlackRock’s CIO of ETF and index investments, shared this figure during a Wednesday panel at Blockworks’ <a href="https://blockworks.co/event/permissionless-iii">Permissionless</a> conference in Salt Lake City.&nbsp;



“We went into this journey with the expectation that we needed to educate ETF investors on crypto, and on bitcoin specifically,” Cohen said. “As it turns out, we’ve done a lot of education for crypto investors on the benefits of the ETP wrapper.”



Roughly $21.7 billion of <a href="https://farside.co.uk/bitcoin-etf-flow-all-data/">net flows</a> have entered IBIT since the fund’s January launch — more than double the second-best inflow-gatherer in the segment (Fidelity, at $9.9 billion).



<h2 class="wp-block-heading">Hello from Permissionless III!&nbsp;</h2>



Casey sat down with House Majority Whip Tom Emmer to discuss what’s next in crypto policy, why the rep says it’s not too late to see meaningful progress this session, and what things could look like under the next presidential administration.&nbsp;



Emmer said he’s been encouraged by the recent bipartisan support crypto policy has received. <a href="https://blockworks.co/news/house-passes-act-fit21-with-bipartisan-support">Seventy-one House Dems voted to pass FIT21</a>, the market structure bill that advanced to the Senate last spring.&nbsp;



“The dam started to break,” Emmer said, referring to the hold Maxine Waters (ranking member of the House Financial Services Committee) has historically had on the party.&nbsp;



He also said he’s confident crypto will remain part of the discussion through the end of the year. <a href="https://blockworks.co/news/political-candidates-cannot-ignore-crypto-voters">Once the election is over</a>, Emmer said it will take a few weeks for “the dust to settle.” But once we know who’s in control of each Chamber and the White House, lawmakers will have a better <a href="https://blockworks.co/news/forward-guidance-newsletter-crypto-survey-data">understanding</a> of their “negotiating leverage” and can get to work.&nbsp;



Another thing he’s confident in? A second term for Donald Trump.&nbsp;



“He’s <a href="https://blockworks.co/news/world-liberty-financial-kyc-starts">evolved on this issue</a> to the point where he’s going to advocate for it,” Emmer said of Trump’s crypto stance and the <a href="https://blockworks.co/news/donald-trump-talks-bitcoin">about-face he’s done</a> in recent months.&nbsp;



As for Kamala Harris? “She doesn’t know what she’s talking about,” he said.&nbsp;



Keep an eye on Blockworks.co for a full recap of our conversation with Emmer.&nbsp;



Tune in <a href="https://blockworks.co/event/permissionless-iii/recordings">here</a> to watch our livestream of Permissionless content. It’s not too late to buy a ticket either, come see us at registration. 



— Casey Wagner



<h2 class="wp-block-heading">Bulletin Board&nbsp;</h2>



<ul class="wp-block-list">
<li>Fed <a href="https://www.federalreserve.gov/monetarypolicy/files/fomcminutes20240918.pdf">minutes</a> released today <a href="https://blockworks.co/news/on-the-margin-newsletter-fomc-meeting-takeaways">from last month’s meeting</a> showed that all committee members supported an interest rate cut. A “substantial majority” were in favor of a 50-basis point cut while some voted for 25bps. </li>



<li>The Atlanta Fed’s <a href="https://www.atlantafed.org/cqer/research/gdpnow?item=12610244-da58-4a4a-9762-36045adb4a3e">GDPNow</a> report showed that it expects a 3.2% increase in GDP for the third quarter. </li>



<li>We’re on the ground in Salt Lake City at Permissionless! If you’re here, be sure to say hi to Ben, Casey and Felix.</li>
</ul>



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Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



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From crypto ETFs to VC: VanEck unveils $30M fund

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<h2 class="wp-block-heading">SEC strikes again</h2>



In an exciting start to the SEC’s 2024-2025 fiscal year, Singapore-based Crypto.com has been served a <a href="https://blockworks.co/news/crypto-dot-com-sec-wells">Wells notice</a>, and, in response, filed a suit against the securities regulator.&nbsp;



In its complaint, the exchange says the SEC is “unlawfully expanding its jurisdiction to cover secondary-market sales” of certain cryptocurrencies. These certain tokens are, according to Crypto.com: SOL, ADA, BNB, FIL, FLOW, ICP, ATOM, ALGO, NEAR and DASH.&nbsp;



There are some familiar names here. In its lawsuit <a href="https://blockworks.co/news/coinbase-sec-rulemaking-appeals-court">against Coinbase</a>, the SEC also named SOL, ADA, FLOW, NEAR, DASH and ICP as securities. When the agency sued Binance, SOL, ADA, FIL, ATOM and ALGO made the SEC’s list. So there’s clearly a trend.&nbsp;



Wells notices, which precede formal enforcement actions, have been a dime a dozen lately. <a href="https://blockworks.co/news/consensys-files-lawsuit-against-sec">Consensys</a> sued the agency in June after receiving a Wells. <a href="https://blockworks.co/news/uniswap-responds-to-sec-wells-notice">Uniswap</a> got its notice in May. <a href="https://blockworks.co/news/sec-issues-wells-notice-opensea-nfts">OpenSea</a> was served in August. You get the picture.&nbsp;



These “counter-suits,” if you will — when a company preemptively takes a legal action before the SEC does the same — don’t tend to go very well for the filer. Consensys’s suit against the SEC was <a href="https://blockworks.co/news/consensys-lawsuit-against-sec-dismissed">dismissed</a> last month, although the ruling was fairly procedural (the SEC <a href="https://blockworks.co/news/sec-drops-ethereum-consensys-investigation">stopped</a> its investigation into Ethereum, so the court said Consensys’s complaint was now moot).&nbsp;



We’ll be watching how the Crypto.com suit plays out. The SEC has declined to comment, on both this matter and the Wells notice, but we will be keeping an eye out for an enforcement action as well.&nbsp;



— Casey Wagner



<h3 class="wp-block-heading">+52%&nbsp;</h3>



This is the 10-year average for bitcoin’s fourth quarter returns, as noted by Galaxy Research in a new report. Bitcoin gained 3% in the third quarter of this year after losing almost 13% during the second quarter.&nbsp; If history repeats itself, these final months of the year could be lucrative. But as always, this is not investment advice.



<h2 class="wp-block-heading">An FTX reminder before the election&nbsp;&nbsp;</h2>



Those infamous three letters have hit the news cycle again, and the timing could prove impactful. Then again, maybe not.&nbsp;



You know the FTX story by now. Its founder is <a href="https://blockworks.co/news/sam-bankman-fried-sentenced">in jail</a> because of it. But there was a bit of closure yesterday when a bankruptcy judge <a href="https://blockworks.co/news/ftx-bankruptcy-plan-approved">greenlit a plan</a> to pay back investors.&nbsp;



The plan, as laid out in previous filings, called for 98% of non-government creditors to <a href="https://blockworks.co/news/empire-newsletter-ftx-bankruptcy-finish-line">get “at least”</a> 118% of the value in their accounts (at the time of the exchange&#8217;s <a href="https://blockworks.co/news/ftx-meltdown-timeline">implosion</a> in November 2022) within two months of the plan’s approval.



It will be paid in cash, meaning investors are <a href="https://blockworks.co/news/ftx-former-customers-oppose-bankruptcy-plan">not getting back</a> any tokens they held on FTX. That isn’t exactly ideal for them, given most assets have <a href="https://blockworks.co/news/sam-bankman-fried-crypto-portfolio">increased substantially</a>. Bitcoin’s price back then was about one-quarter of what it is today.&nbsp;&nbsp;



Still, a portion of this story is being put to rest. Where are we still needing closure? Crypto regulation in the US (and other jurisdictions).



And oh, by the way, the US presidential election is 28 days away.&nbsp;



Mark Cuban, who has thrown vocal support behind VP Kamala Harris, recently reiterated what plenty have said over the last two years: The FTX pain could have been avoided. And <a href="https://decrypt.co/284737/mark-cuban-harris-ftx-sec-gary-gensler">he apparently told</a> one of Harris’s advisors as much over lunch.&nbsp;



The billionaire <a href="https://www.youtube.com/watch?v=tMvufQQbGJo">criticized</a> the SEC’s regulation-by-litigation approach and lack of clear guidelines (instead lauding efforts by Japan, for example). He put at least some of the blame on SEC Chair Gary Gensler — a man that Donald Trump in July said he would <a href="https://blockworks.co/news/donald-trump-speaks-bitcoin-2024">fire</a>, if elected.



An SEC spokesperson did not immediately return a request for comment.&nbsp;



While Trump has been <a href="https://blockworks.co/news/on-the-margin-newsletter-trump-crypto-promises">vocal</a> about being a pro-crypto president, Harris now too has made it known she wants to <a href="https://blockworks.co/news/on-the-margin-newsletter-china-stimulus-stagnation">support</a> the industry. Specifics have been elusive.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;



We know politicians read the news, and maybe some even scroll through Crypto Twitter (or X, whatever). The FTX repayment plan making headlines again so close to Nov. 5 might help highlight the need for comprehensive regulation strides.&nbsp;&nbsp;



Alex Saleh, head of partnerships at Coincover, said in a Tuesday email that more jurisdictions need to begin “moving the dial” on regulatory frameworks.&nbsp;&nbsp;



“It’s clear that regulation will play a central role in preventing future crises like FTX,” Saleh added. “The EU’s MiCA legislation, for example, introduces specific rules around fraud protection and capital reserve requirements which will help foster a safer and more secure ecosystem.”&nbsp;



— Ben Strack



<h2 class="wp-block-heading">Bulletin Board</h2>



<ul class="wp-block-list">
<li>Economists are now <a href="https://www.reuters.com/sustainability/sustainable-finance-reporting/ecb-cut-rates-by-25bps-both-oct-dec-euro-zone-economy-wobbles-2024-10-08/?utm_source=Sailthru&amp;utm_medium=Newsletter&amp;utm_campaign=Reuters-Business&amp;utm_term=100824&amp;user_email=fa79e40e809c025fd4827946d76a7c6be663b35e69ebda4628a3ff9f08f02c28&amp;lctg=6217b5e4e61dc90bfd6de99d">calling</a> for two 25 basis point interest rate cuts from the European Central Bank in October and December. The updated forecasts come after September data showed that eurozone inflation is now below 2%.</li>



<li>Officials from China’s National Development and Reform Commission on Tuesday failed to promise more robust stimulus plans, disappointing investors. The CSI 300 index — a cap-weighted index tracking the top 300 stocks on the Shanghai Stock Exchange and the Shenzhen Stock Exchange — closed 5.9% higher after initially surging 11%.</li>



<li>Tomorrow is the day! <a href="https://blockworks.co/event/permissionless-iii">Permissionless III</a> kicks off in Salt Lake City. Casey, Ben and Felix will all be taking the stage to talk about the biggest trends in macro and crypto. You don’t want to miss it.</li>
</ul>



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SOL, ADA listed in Crypto.com Wells notice

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<h2 class="wp-block-heading">SEC appeal is having a ripple effect&nbsp;</h2>



The SEC’s appeal of the court’s decision in its case against Ripple appears to be having, well, a ripple effect.&nbsp;



As a refresher: A federal judge <a href="https://blockworks.co/news/judge-rules-ripple-xrp-not-security?utm_source=on-the-margin.beehiiv.com&amp;utm_medium=newsletter&amp;utm_campaign=new-day-sahm-rule&amp;_bhlid=e486fbf0e817113df4c1fb8a41cfff47c7497df6">ruled last year</a> that while Ripple’s institutional sales of XRP counted as an unregistered securities offering, programmatic sales did not. The court then, in August, <a href="https://blockworks.co/news/ripple-fined-civil-penalty-sec-lawsuit">ordered Ripple to pay</a> a $125 million penalty — <a href="https://blockworks.co/news/empire-newsletter-ripple-sec-legal-battle">far below the $2 billion</a> the SEC had sought.



The US securities regulator <a href="https://blockworks.co/news/sec-files-ripple-appeal-precedent">appealed that decision last week</a>.



Now, crypto exchange Coinbase has referenced the SEC’s appeal in a letter to Judge Katherine Polk Failla (overseeing the SEC v. Coinbase suit) — urging the court to grant <a href="https://blockworks.co/news/sec-coinbase-motion-interlocutory-appeal">its own motion for interlocutory appeal</a> from earlier this year.



By doing so, the court “would help ensure that the Second Circuit has before it a full account of the legal and practical implications of the SEC’s litigating position — a position that the SEC acknowledged just weeks ago has sown ‘confusion,’” wrote lawyer William Savitt, who is representing Coinbase.&nbsp;



A Coinbase spokesperson told me in an email on Monday that the company “remains confident that we are right on the facts and the law.”



Indeed, the company has the legal bills to prove its belief that this is a fight worth fighting.



Blockchain Association policy counsel Laura Sanders told Blockworks that the SEC’s appeal underscores that it’s essential for the court to weigh in on various foundational questions. “Namely: Is an obligation past the point of sale required for a secondary-market transaction to involve an investment contract?” she explained.



You probably know by now that the so-called <a href="https://www.investopedia.com/terms/h/howey-test.asp">Howey test</a> is used to determine whether something is an investment contract and should thus be regulated as a security.&nbsp;



Well, the word “Howey” appeared four times in Savitt’s letter. The lawyer notes the SEC’s appeal reconfirms that “the issues presented by Howey’s application to secondary-market digital asset transactions are of ‘industry-wide significance.’”



Arie Heijkoop, a partner at law firm Haynes and Boone, said the appeals court should take into account the facts of each case as it considers both. A ruling on each appeal — which in this case would be made by the same court — would go a long way to determine how digital assets should be treated under current US securities laws.&nbsp;&nbsp;



“And given that the SEC has not shown a willingness to provide official regulation or guidance on these matters, having it settled through litigation seems to be the way to get any clarification with this SEC administration,” he said.&nbsp;&nbsp;



The court&#8217;s decision to grant the appeal motion or not will ultimately depend on how much appetite it has for this clash, Heijkoop added.&nbsp;&nbsp;



“The judges will have to decide whether there is enough in all the pleadings and filings before it to make a big decision that could ultimately steer the industry,” he said. “Or whether they want to see the battle develop and play out further.”  



— Ben Strack



<h3 class="wp-block-heading">$159 million&nbsp;</h3>



The amount of money that left bitcoin investment vehicles last week, according to CoinShares data. In a sign investors may be moving more toward a risk-off strategy, digital asset investment products on the whole recorded $147 million of net outflows. 



CoinShares analysts attribute the moves to Friday’s better-than-expected <a href="https://blockworks.co/news/btc-uptober-market-odds">jobs report</a>, which has markets anticipating a lower interest rate cut from the Federal Reserve next month.



<h2 class="wp-block-heading">On Our Radar&nbsp;</h2>



Happy Monday! With the September jobs report in the rearview mirror, the focus this week is back on inflation. Here’s what we’ll be watching:&nbsp;



<ul class="wp-block-list">
<li>The minutes from the FOMC meeting last month — when central bankers opted for a large cut of 50 basis points — will drop on Wednesday. As a reminder: The dot plot showed that most committee members see us ending 2024 with a federal funds rate between 4.25% and 4.75%. The minutes will give us a better understanding of how they came to this decision, though. After Friday’s positive jobs report, markets on Monday were calling for a 25bps cut in November, with fed funds futures prices showing an 84% likelihood, according to <a href="https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html?redirect=/trading/interest-rates/countdown-to-fomc.html">CME Group</a>. </li>



<li>We’ll get the weekly initial jobless claims data on Thursday. Analysts are expecting a slight uptick in first-time filers for the week ended Oct. 5 — calling for 230,000, vs. 225,000 the week prior. On the heels of September’s jobs report, a mild increase shouldn’t be enough to spook markets, but any sign of unemployment edging lower is going to be appreciated. </li>



<li>Also on Thursday, we will get September’s CPI report, followed by the PPI on Friday. Analysts expect core CPI to show a 0.2% monthly increase, down from the 0.3% rise recorded in August. PPI is similarly projected to show prices are inching lower, as analysts forecast a 0.1% monthly increase vs. 0.2% in August. </li>



<li>Last but not least, we will get the University of Michigan’s consumer sentiment survey, which is expected to come in a bit higher than last month (70.3, compared to 70.1). It’s a good litmus test for how optimistic Americans are feeling about their finances and the economy at large. </li>
</ul>



— Casey Wagner



<h2 class="wp-block-heading">Bulletin Board&nbsp;</h2>



<ul class="wp-block-list">
<li>Bitcoin’s price surged to roughly $64,300 today before settling above $63,500 just after 2 pm ET — up roughly 1% from 24 hours ago.</li>



<li>As alluded to earlier, US spot bitcoin ETFs notched about $275 million of net outflows last week, according to Farside Investors <a href="https://farside.co.uk/bitcoin-etf-flow-all-data/">data</a>. Flows into their ETH counterparts over the same span (Sept. 30 to Oct. 4) were also negative, at about $25 million. The latter ETF category has seen $548 million of net outflows since the July 23 launches.   </li>



<li>Crypto-focused asset manager 21.co has linked up with Crypto.com, the company revealed Monday. As an initial step in the “long-term, strategic partnership,” 21.co Wrapped Bitcoin (21BTC) will source bitcoin liquidity from Crypto.com. </li>



<li>It’s officially <a href="https://blockworks.co/event/permissionless-iii">Permissionless</a> week. We hope to see some of you in Salt Lake City!</li>
</ul>



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Coinbase cites SEC’s Ripple appeal to advance its own legal battle

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<h2 class="wp-block-heading">The ‘Uptober’ outlook, 4 days in</h2>



It’s the fourth day of October, which crypto folk sometimes call “Uptober” due to the gains bitcoin has historically seen during the month.



With that in mind, let’s quickly look at where we stand and whether that market narrative could hold.&nbsp;



The upshot? Well, XBTO chief commercial officer Javier Rodriguez-Alarcon told Blockworks that the upcoming US elections, uncertainty around the Fed’s rate path and an escalating conflict in the Middle East could lead to significant disruptions.



“We believe these factors will impact crypto markets, leaving little room for typical seasonality effects to play out this year,” he added.&nbsp;



While we haven’t seen any extreme BTC price moves in October yet (at least not on a net basis), bitcoin rose to nearly $62,000 after this morning’s jobs print.



BTC fluctuated from there, ending up back around $61,980 at 2 pm ET — up 2% from 24 hours prior.&nbsp;



Today’s US Bureau of Labor Statistics Report showed that nonfarm payroll employment jumped by 254,000 in September (up from a revised 159,000 in August). The unemployment rate, at 4.1%, was lower than the 4.2% expectation.&nbsp;



Susannah Streeter, head of money and markets at Hargreaves Lansdown, noted the Fed’s concerns about the jobs market potentially cooling off rapidly. That led to the US central bank’s <a href="https://blockworks.co/news/on-the-margin-newsletter-interest-rate-cut">50-basis point cut last month</a>.&nbsp;



“These latest numbers will help assuage those worries and add to a picture of a resilient US economy, which appears to be heading for a soft landing,” Streeter added in a statement this morning.&nbsp;



Forward Guidance’s own Felix Jauvin, who shared a <a href="https://blockworks.co/news/forward-guidance-newsletter-jobs-report">jobs report primer</a> yesterday, weighed in on X after the release:



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">The thing that people are gonna fuck up now is move the goal posts and say this is bad because less cuts. Nope. Fed will still cut in November but less panicky and more likely 25 We’re in a good news is good news regime cause inflation has moderated and fears of recession took…&mdash; fejau (@fejau_inc) <a href="https://twitter.com/fejau_inc/status/1842188348200534110?ref_src=twsrc%5Etfw">October 4, 2024</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Taking a step back, the so-called “Uptober” began with a downward market reaction to an Iranian missile attack on Israel. That came after Israel launched a ground operation into Lebanon.&nbsp;



Bitcoin dropped to roughly $60,000 on Oct. 1. US spot bitcoin ETFs saw net outflows of $243 million that day, Farside Investors <a href="https://farside.co.uk/bitcoin-etf-flow-all-data/">data</a> shows — the largest in a single day in nearly a month.



Industry watchers noted that the risk of further escalation in the Middle East could make markets more sensitive to short-term developments as traders reprice risk.



“While the first half of October could see declines of 8 to 10%, we still expect the month to end neutral to positive, depending on when the uncertainty regarding geopolitical conditions alleviates,” Bitfinex derivatives head Jag Kooner said in a statement.



Some crypto segment observers <a href="https://x.com/waleswoosh/status/1841147417594351811">have pointed out</a> that a slow start to October (from a crypto price perspective) has not necessarily been a signal of how the month would end.&nbsp;



CoinGlass <a href="https://www.coinglass.com/today">data</a> shows, for example, a roughly 10% BTC price gain on Oct. 22, 2023 after mild fluctuations earlier that month.&nbsp;



We should also probably mention the elephant in the room: There’s a <a href="https://blockworks.co/news/forward-guidance-newsletter-crypto-survey-data">presidential election</a> in 32 days.&nbsp;



Research published this week by crypto platform XBTO shows that bitcoin’s volatility is much more correlated to TradFi markets now than it was during the 2016 and 2020 election cycles.



There has been a +86% correlation between BTC and the S&amp;P 500 this year, the Thursday report noted. That compares to -39% in 2020 and +36% in 2016.



<a href="https://blockworks.co/news/donald-trump-speaks-bitcoin-2024">Donald Trump</a> and <a href="https://www.bloomberg.com/news/articles/2024-09-22/harris-vows-to-grow-ai-crypto-industries-in-pitch-to-nyc-donors">Kamala Harris</a> have both made pro-crypto comments, though we (obviously) won’t know specific actions they will actually take until later on.&nbsp;



“As the election draws nearer, market participants should brace for continued volatility, driven by the unpredictable nature of the election outcome and its <a href="https://blockworks.co/news/political-candidates-cannot-ignore-crypto-voters">potential impact on future crypto policies</a>,” Rodriguez-Alarcon said.



So what should we make of all this? Put simply, today’s stronger-than-expected job numbers appear to have fueled optimism that will likely remain tempered by various wait-and-see factors.&nbsp;



I imagine when you started reading this you knew there would be no definitive answers to whether the “Uptober” narrative would hold this time around. But hopefully you have gained some perspective on what to watch for nonetheless.



— Ben Strack&nbsp;



<h3 class="wp-block-heading">$92 million</h3>



The capital bitcoin miner TeraWulf gained by selling its 25% equity interest in the Nautilus Cryptomine joint venture to Talen Energy Corporation.



Most of that (about $85 million) is cash. TeraWulf intends to use the money to expand its high-performance computing (HPC) and AI capabilities at its Lake Mariner facility in western New York.



This continues the trend of bitcoin miners <a href="https://blockworks.co/news/btc-miners-evolving-revenue-post-halving">wading deeper into the HPC/AI space</a> to expand their revenue streams, particularly after per-block <a href="https://blockworks.co/news/bitcoin-halving-2024-occurs">bitcoin mining rewards were slashed in half</a> earlier this year.



<h2 class="wp-block-heading">Did You Notice</h2>



Happy Friday! We have made it to the end of jobs week. Odds of a 25bps rate cut by the Federal Reserve next month sat at 97.4% (as of 2 pm ET), according to data from <a href="https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html?redirect=/trading/interest-rates/countdown-to-fomc.html">CME Group</a>. This is up from about 47% a week ago.&nbsp;



We already discussed today’s jobs report. Here’s a look at some of the other data that has fed fund futures markets rethinking things:&nbsp;



<ul class="wp-block-list">
<li>Tuesday’s JOLTS report — a metric favorite for Fed Chair Jerome Powell, by the way — showed job openings are increasing and workers are quitting at the lowest level since the pandemic. Still, quits didn’t have to drop too low to hit this new record; the figure came in at 3.1 million in August vs. 3.2 million in July. Job openings as a percentage of the overall labor force now sit at 4.77%, which is around pre-pandemic levels.&nbsp;</li>



<li>In somewhat better news, on Wednesday the ADP employment report showed that the private sector added 143,000 jobs in September, up from 103,000 in August and beating the consensus expectation of 128,000. Wage growth is also slowing, another positive Powell wants to see. Twelve-month wage increases (for those who stayed in their same positions) was 4.7%, down from 4.8% in August. Powell is going to ultimately want to see annual wage growth closer to the 3% to 3.5% level, which he’s said in the past is consistent with a 2% inflation rate. But it’s a step in the right direction.&nbsp;</li>



<li>And, for the not-so-good news: Initial jobless claims showed that 225,000 people filed for first-time benefits the week ended Sept. 28, up from the revised figure of 219,000 the week prior and higher than the expected 220,000. Continued claims, which are reported on a one-week delay, came in at 1.826 million for the week ended Sept. 21, a mild decrease from the week prior.&nbsp;</li>
</ul>



— Casey Wagner



<h2 class="wp-block-heading">Tokenization headlines keep on coming</h2>



As tokenization efforts continue to come up, let’s dig into the latest.



You may have seen Visa created a platform to help financial institutions issue fiat-backed tokens and test out their use cases.&nbsp;&nbsp;



As more real-world assets — from real estate to debt securities — come onto blockchains, there’s a growing need to bring more forms of cash onto those rails to trade them, Visa crypto head Cuy Sheffield <a href="https://blockworks.co/news/visa-to-help-banks-test-tokenized-assets-smart-contracts">told Blockworks</a>.



We learned that Spain-based bank BBVA has been testing the issuance, transfer and redemption of a bank token on a testnet blockchain this year via the Visa Tokenized Asset Platform (VTAP) sandbox. BBVA seeks to launch a pilot with select customers in 2025 on the Ethereum blockchain.&nbsp;



Also this week, crypto infrastructure platform Taurus revealed it had partnered with Chainlink Labs “to accelerate the adoption of tokenized assets by global financial institutions.”



Taurus is integrating Chainlink data feeds for market pricing, reference and identity data, as well as the blockchain’s proof-of-reserve monitoring and interoperability protocol. The latter tool is set to allow for tokenized asset transfers across public and private blockchains, Taurus notes.



Backed by Credit Suisse and Deutsche Bank, <a href="https://blockworks.co/news/taurus-custody-tokenization-platforms">Taurus signaled earlier this year</a> it would focus on its custody and tokenization platforms given the growing momentum around bringing RWAs onchain.



Major TradFi players — like <a href="https://blockworks.co/news/blackrock-tokenized-fund-trading-circle-usdc">BlackRock</a>, <a href="https://blockworks.co/news/stablecoin-with-yield-franklin-templeton">Franklin Templeton</a> and <a href="https://blockworks.co/news/state-street-sees-significant-opportunity-in-tokenization">State Street</a> — are embracing blockchain tech as they recognize the benefits (lower costs, faster transactions and improved transparency), Taurus co-founder Lamine Brahimi told Blockworks.&nbsp;&nbsp;



“Ultimately, we’re witnessing an evolution of capital markets where digital assets will become an integral part of our financial systems, expanding opportunities for both institutions and individual investors,” he added.&nbsp;



We’ve heard about some of the <a href="https://www.sc.com/en/press-release/trade-finance-to-play-substantial-role-in-usd-30-1-trillion-tokenised-real-world-assets-market-by-2034/">bullish projections</a> for how big this space can get. Tokenized money market funds by BlackRock and Franklin Templeton have <a href="https://blockworks.co/news/empire-newsletter-blackrock-buidl-milestone">roughly $1 billion</a> in combined assets.



Tokenization’s full potential is expected to unfold gradually as the regulatory landscape evolves and technological hurdles are addressed, Brahimi said.&nbsp;



“In the coming years, I envision a world where tokenization is the norm across various asset classes like equities, debt and more,” he noted. “This will not only enable fractional ownership but also unlock liquidity in tightly constrained markets.”&nbsp;



I’ll be moderating a panel at <a href="https://blockworks.co/event/permissionless-iii">Permissionless III</a> next week — “The Mission to Tokenize $1T Onchain” — with panelists from Franklin Templeton, JPMorgan’s Onyx Digital Assets, Securitize and Kinto.&nbsp;



I’m expecting to learn a lot about how they see the space progressing.&nbsp;



— Ben Strack 



<h2 class="wp-block-heading">Bulletin Board&nbsp;</h2>



<ul class="wp-block-list">
<li>Crypto-focused asset manager Bitwise said Friday that it wants to convert its three futures-based ETFs to funds that rotate between 100% exposure to crypto futures contracts and 100% exposure to US Treasurys, based on market trends. This intended switch comes as the US spot bitcoin and ether ETFs launched earlier this year made futures-based ETFs “less compelling for investors seeking long-only exposure.”</li>



<li>The spot BTC funds listed on US exchanges notched a third straight day of net outflows Thursday, bringing the three-day total to about $360 million. On Wednesday, the iShares Bitcoin Trust (IBIT) saw net outflows (of about $14 million) for just the fourth time since its Jan. 11 launch.</li>



<li>We’ve already mentioned Blockworks’ <a href="https://blockworks.co/event/permissionless-iii">Permissionless III</a> in Salt Lake City, but we’ll remind you again. If you come, you can meet the Forward Guidance newsletter crew. Hope you have a great weekend!   </li>
</ul>



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Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



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Exploring the ‘Uptober’ drivers and current outlook

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<h2 class="wp-block-heading">Digging into the data ahead of tomorrow’s big jobs report</h2>



In recent months, the balance of risks has shifted from fears about getting a handle on inflation to concerns around whether the Fed is late to the game, and how this ongoing growth slowdown may evolve into an outright recession.&nbsp;



Paired with that comes the market’s shift from caring about CPI prints to caring about employment data prints. With tomorrow’s important jobs report being a key macro driver at this stage of the business cycle, let’s dig into some of the data.



<h3 class="wp-block-heading">Labor market data signals resilience</h3>



After falling for multiple months, the job vacancy rate ticked up from 4.6% to 4.8%. This implies there were more jobs available than the previous month. And when considering a classic Beveridge curve type of analysis that compares job vacancy to unemployment rate, there is effectively a lower risk of an accelerating unemployment rate compared to the month before.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXc5wXtSKdyP3LIFJCYdCPZ4trPB2v1abGwL4rQIq9gq37mwL0oaIHCPbfW3u-BLV9rF-B2qGdHqP4KYVCDNUvfs8T2FNupdbrVaC4G_pDwGo86KXdfFrettW5mHREyg8XLkrBmvt0y0iJAvTTgGdFQ3LdE?key=hG3C0lldV5B70LcDHroRWg" alt=""/></figure>



But despite a solid JOLTS report in terms of the job openings, the quit rate headed lower — implying employees are not as confident as they were to leave their current job in the hopes of finding something better-paying. This provides a key cap on the amount of wage growth the labor market is experiencing, as it’s typically through job-switching that the largest wage growth impulses occur.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXeaETMGFfY-1_RFQdB32XWkrPjYLAYkl9EfL5EaNoHBx7x2bE5ZHa47A7LVlhQpl0NPDYDle01W3-P2aoJes-TgphObKswkjcwXCaVmYItfwVXdu_B8dtV25ccW4r8fUIwqcZlVOImR079Ydu6jjswx2nM3?key=hG3C0lldV5B70LcDHroRWg" alt=""/></figure>



Despite an upside surprise today in initial jobless claims of 225,000 (vs. the forecasted 220,000), the four-week average of jobless claims has been in a steady downtrend and hit its lowest level since June.



The previous three weeks were also downside surprises on jobless claims, which paints a high-frequency picture of a somewhat neutral labor market.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdXM7Mk6OdwWTaR1wU5SjMwm0krUPAjzdsJ4yoSr1g0VlpreoZE2nxHfQ2fJA-gHNXz2MyMlExAuPQ8_qdHye9LGFp2jvkE2l7ndu_EtGy8VIUf8Hu-30IwQIkjphsGH0x3fCUdKVntffZcJrpeaKPPXnc?key=hG3C0lldV5B70LcDHroRWg" alt=""/></figure>



Finally, the ADP employment change blew past expectations of 120,000 and printed at 143,000 — up from the prior month’s 103,000.



The ADP print is a solid gauge of what to expect in the upcoming jobs report. With such a huge upside surprise, it removes a lot of the tail risk behind potential negative outcomes tomorrow.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdbcEFwNG1_fWRpYIf71jDM4Gt093Ou-UPEcgMNmOGKvWH4IeLSfF_vtIq-xPYWFi_hzatl6Ot1I7utYMQpEGf8wZUqzPRt4gUXkOnSAVPzbLzwY9obh899fPLRVtV2XaCQa3tsJ6QOrQxB5ketY0UVtdnU?key=hG3C0lldV5B70LcDHroRWg" alt=""/></figure>



<h3 class="wp-block-heading">Growth outlook looks decent</h3>



This morning, we received the ISM Services PMI. That came in significantly above expectations of 51.7, printing a 54.9. This is the highest print in over a year and an incredibly prescient indication that growth in the economy remains solid.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcBYxCYRU-ca9VlvkH8HzJnq8592aW_J2W1e9w8wc6EMsj8pLV6ULNBm29vWkID0Fv16Htw8wuaD2YXfTECFk5WB51EI2oMT_BwwfqWLGPIcHhWMoqiDgVmd9KMlw-jhPWjk7RvPRvZ-0OwHDCg1nY_DQ5n?key=hG3C0lldV5B70LcDHroRWg" alt=""/></figure>



Bringing all these data points together, let’s now look at the economic surprise index:<img loading="lazy" decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcbdHBjsEYtc6iBvc8VQmv8gS0vEF_04npoaVNKehHjD4j7PyFmSdvuyJTfWEDYPoRoi6Z89_JkDMcdk1lm0BV5tJz_O7RcWy2s77Q0T5PelYPrdoMHAHGfnctEMBYIGD7NV-uBVYB6AfkObd6G8V3y62kG?key=hG3C0lldV5B70LcDHroRWg" width="624" height="351">



After a huge move downward — implying worse-than-forecasted economic data prints — we have now reversed back into positive territory. What that leaves us with on the eve of the most important jobs report of our lifetime (until the next one comes out, of course), is that the economy is surprisingly resilient. Based on the higher frequency labor market data that’s come out this week, the jobs report tomorrow will probably be fine.&nbsp;



— Felix Jauvin



<h3 class="wp-block-heading">1&nbsp;</h3>



The number of equal-weight S&amp;P 500 sectors that outperformed their market cap-weighted counterparts during the first three quarters of the year. The sector in question was real estate.&nbsp;



Why does this matter? It shows us it&#8217;s not just tech leading the market cap S&amp;P to new heights this year.&nbsp;



The equal weight S&amp;P 500 index is up just over 12% in 2024, while the market cap-weighted version has gained close to 20% since the start of the year.&nbsp;



<h2 class="wp-block-heading">Did Grewal sell out?&nbsp;</h2>



The head of the SEC’s enforcement division will be <a href="https://blockworks.co/news/sec-enforcement-director-departure">departing the agency</a> next week.&nbsp;



Gurbir Grewal, who has led the US securities regulator’s enforcement operations since July 2021, joined the agency just months after Gary Gensler was sworn in as chair.&nbsp;



Crypto-related enforcement actions, which had been on the rise before Grewal and Gensler took over, were a significant part of Grewal’s tenure.&nbsp;



Under Grewal’s leadership, the agency issued 35 crypto enforcement actions in 2022 and 40 in 2023. Plus, the division of enforcement almost <a href="https://www.sec.gov/newsroom/press-releases/2022-78">doubled</a> its crypto assets and cyber unit in May 2022, bringing the team’s headcount to 50.&nbsp;



In 2024 (as of Sept. 6), the agency had brought 18 crypto enforcement <a href="https://www.sec.gov/securities-topics/crypto-assets#account">actions</a>.



Most notably, the agency’s cases against <a href="https://blockworks.co/news/judge-rules-against-coinbase-sec-dismissal">Coinbase</a>, <a href="https://www.sec.gov/newsroom/press-releases/2023-101">Binance</a>, <a href="https://www.sec.gov/newsroom/press-releases/2023-237">Kraken</a> and <a href="https://www.sec.gov/newsroom/press-releases/2024-79">Consensys</a> were all brought under Grewal. Each suit has, in part, addressed token classification — a major theme under the Gensler/Grewal regime. The SEC also launched and closed its so-called <a href="https://blockworks.co/news/consensys-files-lawsuit-against-sec">“Ethereum 2.0”</a> investigation under Grewal.&nbsp;



The agency, during Grewal’s tenure, has also shown significant increase in <a href="https://www.sec.gov/enforcement-litigation/administrative-proceedings/33-11305-s">NFTs</a>, which the SEC generally considers to <a href="https://blockworks.co/news/flyfish-settlement-sec-nfts">be securities</a>.&nbsp;



Gensler has plenty of time left in his term, so I don’t expect we’ll see a huge change in enforcement patterns under the next director. The current deputy director of the division, Sanjay Wadhwa, will step in as acting director starting Oct. 11. The SEC declined to comment on who will take over the role permanently.&nbsp;



If I had to bet, I’d say Grewal’s headed to the private sector, but we will just have to wait and see.&nbsp;



— Casey Wagner



<h2 class="wp-block-heading">Banks get set to use Swift for new transaction trials&nbsp;</h2>



It looks like we could see another big step forward on the crypto transaction front as banks get set for trials on a system powering billions of money transfers.



Financial institutions will be able to soon use Swift’s platform to test out the settlement of “digital assets and currencies,” the organization said Thursday.&nbsp;



These pilot transactions are set to start next year.&nbsp;



A quick reminder for those in need: Swift — the Society for Worldwide Interbank Financial Telecommunication — was formed in 1973 and offers a messaging network through which international payments are initiated.



With more than 11,000 institutions connected to the network, Swift carries more than 5 billion financial messages each year.



Swift Chief Innovation Officer Tom Zschach put it simply in a statement: &#8220;For digital assets and currencies to succeed on a global scale, it’s critical that they can seamlessly coexist with traditional forms of money.”



The upcoming pilots were born from ample prior experimentation.&nbsp;



Swift <a href="https://blockworks.co/news/swift-says-it-can-resolve-a-major-obstacle-to-cbdc-adoption">claimed</a> in 2022 it had successfully shown that CBDCs and tokenized assets can move seamlessly on existing financial rails. When establishing a global CBDC system, it added, familiarity (alongside the infrastructure) is an important facet.



Then last year, Swift sought to link private and public blockchains <a href="https://blockworks.co/news/banks-can-10x-the-blockchain-industry-says-chainlink-co-founder">in a trial collaboration</a> with Chainlink and finance giants such as BNP Paribas and BNY Mellon (tests it ultimately deemed <a href="https://blockworks.co/news/swift-tests-chainlink-ccip">successful</a>).



Swift also has its hand in other efforts related to tokenized assets — a space Standard Chartered <a href="https://www.sc.com/en/press-release/trade-finance-to-play-substantial-role-in-usd-30-1-trillion-tokenised-real-world-assets-market-by-2034/">said</a> could reach $30 trillion by 2034.



It is participating in Project Agora (led by the Bank for International Settlements), which is exploring how tokenization can enhance wholesale cross-border payments. Swift is also looking into how its “interlinking capabilities” could integrate the US <a href="https://blockworks.co/news/tradfi-blockchain-trials-mass-adoption">Regulated Settlement Network</a>, for example, with TradFi systems.



Visa and Mastercard said in May they would join banks like JPMorgan and Citigroup to test this so-called Regulated Settlement Network. Colin Butler, Polygon’s global head of institutional capital, said these entities getting closer to aligning on a standard represents “the 5-yard line for mass institutional adoption.”



While only time will tell what exactly we learn from these future trials, the prospect of financial institutions having a single point of access to digital asset classes and tokens appears bullish.&nbsp;



— Ben Strack&nbsp;



<h2 class="wp-block-heading">Bulletin Board&nbsp;</h2>



<ul class="wp-block-list">
<li>Payments giant Visa has <a href="https://blockworks.co/news/visa-to-help-banks-test-tokenized-assets-smart-contracts">created a platform</a> to try to help financial institutions issue fiat-backed tokens and test out their use cases. Spain-based BBVA has been working within the Visa Tokenized Asset Platform (VTAP) sandbox this year and looks to launch an initial pilot with select customers in 2025 on the Ethereum blockchain.</li>



<li>A CFTC subcommittee voted to pass recommendations related to policies to support the use of blockchain for non-cash collateral, Bloomberg <a href="https://www.bloomberg.com/news/articles/2024-10-02/use-of-blackrock-tokens-as-collateral-moves-closer-to-mainstream">reported</a>, citing unnamed sources “familiar with the matter.” The Global Markets Advisory Committee will now consider the recommendations and is expected to vote later this year. Such approval could make it easier for institutions to accept tokenized assets as collateral.</li>



<li>Grayscale Investments launched an Aave trust Thursday after introducing an XRP trust last month. The crypto-focused asset manager has been on a product-launching kick this year, also debuting trusts holding bittensor (TAO), sui (SUI), maker (MKR) and avalanche (AVAX) in August.</li>
</ul>



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What is the labor market signaling? Checking the data before tomorrow’s jobs report

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<h2 class="wp-block-heading">New US spot crypto ETF plans take shape</h2>



The spot bitcoin ETFs hitting US exchanges was the talk of the town in January (not to mention the months of anticipation after BlackRock jumped into that race).&nbsp;



Though ether ETFs haven’t seen as much investor interest (and weren’t expected to) since their July launches, that was deemed another milestone. Not to mention the iShares Ethereum Trust fairly quickly gathered $1 billion in assets.



As institutions wade deeper into crypto, ETFs have proven to be a gateway into the space. All this to say: New crypto ETF filings are pretty significant, particularly ones that would directly hold an asset not yet available in such a wrapper.



But for them to really change the game, of course, they need to be approved.



That preamble sets up what we saw today: Crypto-focused asset manager <a href="https://blockworks.co/news/bitwise-files-for-spot-xrp-etf">Bitwise filed for an XRP ETF</a>. Canary Capital also appeared to file for a similar product, the Delaware Division of Corporation website shows.



Bitwise decided to put out a press release — not exactly common after an <a href="https://www.sec.gov/Archives/edgar/data/2039525/000121390024084334/ea0216197-s1_bitwise.htm">S-1 filing</a>. In it, the firm mentions XRP’s role in facilitating cross-border payments and remittances — adding that the XRP Ledger public blockchain typically processes transactions in seconds, with fees under a cent.



XRP’s market capitalization of roughly $33 billion means it ranks seventh among crypto tokens.



“We believe blockchains will usher in new, apolitical monetary assets and permissionless applications for the 21st century,” Bitwise CEO Hunter Horsley said in a statement.&nbsp;



Last month <a href="https://blockworks.co/news/on-the-margin-newsletter-bear-market-vibes">I wrote</a> about how Grayscale’s XRP Trust launch didn’t necessarily mean such an ETF was coming. Sure, Grayscale has an intended product lifecycle that ends in an ETF listing; but the SEC has to allow such a conversion for that to be fulfilled.



Some have previously told Blockworks that spot crypto ETF approvals in the SEC (outside of BTC and ETH) might be tough given the precedent of the regulator wanting to <a href="https://blockworks.co/news/us-spot-crypto-etf-approvals-outlook">first see a regulated futures market</a>. None exist for XRP (or solana).



But the plans laid out from Bitwise and Canary seem to advance the growing perception that the US crypto regulatory winds are changing. Then again, it could just be wishful thinking.



While Bitwise declined to comment on that, a Canary Capital spokesperson told me there are indeed “encouraging signs of a more flexible regulatory environment.” The representative added: “This year&#8217;s approval of the spot Ethereum ETFs, following the earlier spot bitcoin ETF approvals, signals positive momentum, especially considering how long it took for ETH futures products to be approved. We&#8217;re optimistic about the next phase of developments in the space.&#8221;



Neena Mishra, director of ETF research at Zacks Investment Research, said Bitwise is preparing for an XRP ETF in case Trump wins the presidency. The former president did, after all, <a href="https://blockworks.co/news/donald-trump-speaks-bitcoin-2024">promise to “fire” SEC Chair Gary Gensler</a> if elected.&nbsp; “If Harris wins and Gensler remains SEC chair, the filing has no chance of approval, despite [Harris’s] <a href="https://blockworks.co/news/on-the-margin-newsletter-china-stimulus-stagnation">recent comments</a> about supporting digital assets,” Mishra argued.



Mishra’s thoughts are similar to ones expressed by VanEck’s Matthew Sigel after his firm <a href="https://blockworks.co/news/how-us-canada-solana-fund-filings-differ">filed for a solana ETF</a> in June. He had noted that filing was essentially <a href="https://x.com/matthew_sigel/status/1807775290396942559?lang=en">a bet on a Trump victory</a> in November, given the Republican nominee’s rhetoric in recent months.



Sigel did not want to comment on the latest Bitwise S-1 today, noting only: &#8220;We like SOL a lot more than XRP.&#8221;&nbsp;



Bitwise’s filing also comes as crypto enthusiasts monitor whether the SEC will appeal the ruling in the regulator’s legal battle with Ripple Labs. The court <a href="https://blockworks.co/news/ripple-fined-civil-penalty-sec-lawsuit">ordered Ripple to pay</a> a $125 million penalty — far below the $2 billion <a href="https://blockworks.co/news/empire-newsletter-ripple-sec-legal-battle">the SEC had sought</a>.



Judge Analisa Torres <a href="https://blockworks.co/news/judge-rules-ripple-xrp-not-security?utm_source=on-the-margin.beehiiv.com&amp;utm_medium=newsletter&amp;utm_campaign=new-day-sahm-rule&amp;_bhlid=e486fbf0e817113df4c1fb8a41cfff47c7497df6">last year ruled</a> that while Ripple’s institutional sales of XRP counted as an unregistered securities offering, programmatic sales did not. An appeal could delay clarity on XRP’s status, possibly impacting planned ETFs that hold the asset.



Ultimately, ETF issuers want to be ready for any scenario — particularly given the edge asset managers often gain from launching a product first, Mishra noted.



“Bitwise, well known for its crypto expertise, will likely launch this product in the future,” she explained to me. “Politics will determine whether this happens soon or in a few years.”&nbsp;



— Ben Strack&nbsp;



<h3 class="wp-block-heading">0 </h3>



The number of times crypto was mentioned during last night’s vice presidential debate.&nbsp;



We can’t say we were terribly surprised, but given Kamala Harris and Donald Trump do not have any more debates scheduled before Nov. 5, last night appeared to be a final pre-election opportunity to hear digital asset regulation discussed on a national stage.&nbsp;



Still, there is plenty of time left for Trump and/or Harris — plus their running mates — to share more information about their respective crypto platforms (or <a href="https://blockworks.co/news/on-the-margin-newsletter-fomc-meeting-takeaways">stop into an NYC bar and pay with bitcoin</a>).&nbsp;



<h2 class="wp-block-heading">More employment data boosts odds of a 25bps cut&nbsp;</h2>



Private sector employers added 143,000 jobs in September, up from 103,000 in August, ADP reported Wednesday. This beat the forecast of 128,000 new positions.&nbsp;



Hospitality led with 34,000 new jobs. Construction and education and health services posted 26,000 and 24,000 new positions, respectively.&nbsp;



The report noted too that wage growth is slowing, which we also saw in yesterday’s JOLTS report. ADP said the 12-month pay increase for employees who had not left their position was 4.7%, compared to 4.8% in August.&nbsp;



The JOLTS report showed that layoffs and discharges are leading quits on a percentage basis, but job openings are still up. Job openings — as a percentage of the overall US labor force — now sit at 4.77%, similar to where we were prior to the pandemic.&nbsp;



This data comes after Fed Chair Jerome Powell on Monday said the committee is not looking to rush interest rate cuts. The lowering cycle will continue, he added, “over time.”&nbsp;



Labor market health, as we’ve discussed in this newsletter before, is a top concern for Powell as he attempts a soft landing.&nbsp;



“We do not believe that we need to see further cooling in labor market conditions to achieve 2% inflation,” he said Monday.&nbsp;



Federal funds futures markets now show a 63% chance of a 25-basis point cut in November, according to CME Group <a href="https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html?redirect=/trading/interest-rates/countdown-to-fomc.html">data</a>.&nbsp;



Powell is going to want to see annual wage growth closer to the 3% to 3.5% level, which he’s said in the past is consistent with a 2% inflation rate. Still, I’d tend to agree with the futures markets here; these latest two reports are not convincing me that we’ll see another aggressive cut next month.&nbsp;



— Casey Wagner



<h2 class="wp-block-heading">Latest CME Group launch surpasses prior crypto product debuts&nbsp;&nbsp;</h2>



CME Group’s new Bitcoin Friday futures (BFF) are so far a smash hit — at least when considering day-one reception compared to its previously launched crypto derivatives offerings.



Sized at one-fiftieth of a bitcoin, the new contracts are cash-settled to the CME CF Bitcoin Reference Rate (New York Variant) at 4 pm ET every Friday. New contracts are listed every Thursday at 6 pm ET, and market participants can trade the nearest two Fridays at any given point.



CME Group noted Tuesday that 31,498 BFF contracts traded across two different contract weeks during the Sept. 30 debut.



A company spokesperson put this number into perspective. The highest-volume CME crypto launch prior to yesterday was micro bitcoin futures, which traded about 7,400 contracts when introduced in May 2021.



A majority of the volume — at 69% — came from investors in the Europe, Middle East and Africa regions, CME data shows. Those in North America and the Asia Pacific regions made up 19% and 12% of the volume, respectively.



The derivatives marketplace publicly plotted out the launch of these futures contracts in August. The concept was simple: to offer smaller-sized contracts in an effort to attract participation from more types of investors.



Institutions and retail traders alike “will be able to more accurately fine-tune their bitcoin exposure on a regulated exchange,” CME crypto products head Giovanni Vicioso said in a statement at the time.&nbsp;



Galaxy and Marex made the first trade of such contracts on Sept. 29, CME noted on Tuesday.



Marex’s co-head of derivatives engine, Harry Benchimol, said the weekly contracts are an efficient hedging tool and are closer to the perpetuals offered on crypto platforms.&nbsp;&nbsp;&nbsp;



Thus, he noted, “CME Group is closing the gap between traditional financial and crypto markets.”



Interest is coming “both on screen and in the block market,” Vicioso told Blockworks Wednesday.&nbsp;&nbsp;



This seems to give CME Group plenty of incentive to continue building out its crypto product lineup. It’ll be interesting to see what it comes up with next.&nbsp;



— Ben Strack&nbsp;



<h2 class="wp-block-heading">Bulletin Board&nbsp;</h2>



<ul class="wp-block-list">
<li>A federal appeals court has cleared prediction market platform Kalshi to reopen its US Congressional election betting markets. The ruling comes three weeks after a different appellate judge <a href="https://apnews.com/article/betting-on-elections-kalshi-gambling-c060aad4d12f9622d36f83e525088dcc">sided with the CFTC</a> and issued a temporary freeze on the markets. </li>



<li>Dockworkers from 36 ports on the East Coast continued their strike Wednesday as <a href="https://nam.org/manufacturers-call-on-president-to-invoke-taft-hartley-act-to-stop-port-strike-32188/?stream=series-press-releases">pressure mounts</a> for President Biden to invoke the Taft-Hartley Act and intervene. Biden has said he will not step in. </li>



<li>We are a week away from <a href="https://blockworks.co/event/permissionless-iii">Permissionless III</a>! Get your tickets now to hear Felix host  Forward Guidance live. (Word to the wise, we hear prices are increasing soon!)</li>
</ul>



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The XRP ETF filing: A sign of regulatory progress or wishful thinking?

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Welcome to the Forward Guidance Newsletter, brought to you today exclusively by Casey Wagner. Here’s what you’ll find in today’s edition:



<ul class="wp-block-list">
<li>With the election just over a month away, we break down the latest crypto-focused voter surveys. </li>



<li>The KYC process for Donald Trump’s DeFi project is officially open. What, exactly, is the project? TBD.  </li>



<li>The week of jobs data is not off to the best start. Here’s why.</li>
</ul>



<hr class="wp-block-separator has-alpha-channel-opacity"/>



<h2 class="wp-block-heading">What the numbers have to say about the ‘crypto voter’</h2>



We know it’s election season because political polls are popping up everywhere.&nbsp;



(Well, that and the incessant commercials, but I don’t have cable, so I’ve been mostly spared.)&nbsp;



<a href="https://consensys.io/blog/half-of-all-us-voters-support-pro-crypto-policies">Consensys</a>, <a href="https://assets.ctfassets.net/sygt3q11s4a9/7oELfEbBOMbx3GPgyMswFE/169fee00ffc261bed675586c6b3f50c7/StateofCrypto_Q32024_Report__1_.pdf">Coinbase</a> and <a href="https://www.grayscale.com/globalassets/harris-poll/grayscale-crypto-election-research-report.pdf">Grayscale</a> have all published crypto-focused political surveys in recent days. Each crypto firm partnered with a polling company (HarrisX, Morning Consult and The Harris Poll, respectively), and findings focused on one central theme: The number of voters who own crypto is increasing, and most of this demographic is at least considering a candidate’s crypto policies when casting their vote.&nbsp;



Of course, it’s important to remember the sources here — and keep in mind that data can be presented in a way that shows just about any trend the presenter wants, so I encourage you to unpack the reports yourself and consider the methodology of each.&nbsp;



That being said, here are some of the most notable findings from the surveys:&nbsp;



<ul class="wp-block-list">
<li>Voters currently seem pretty split between Democrats and Republicans. Consensys reported that 35% of respondents most trusted Republicans on crypto policy. Coinbase found that 47% of crypto owners will vote for Kamala Harris and 47% will vote for Donald Trump. Grayscale’s survey says 34% of voters think Republicans are more favorable to the industry, vs. 33% who said the same for Democrats. </li>



<li>Crypto owners generally want to see more regulation, all surveys found. Coinbase’s report states that 72% of crypto owners would “consider greater involvement” in the industry <a href="https://blockworks.co/news/crypto-must-work-closely-with-regulators">if regulations were more clear</a>. 44% of crypto owners think the US government is doing “too little” to support the industry, according to Consensys, and 80% of US voters think regulators have a role in overseeing emergency technology, per Grayscale’s report.</li>



<li>Crypto just may be a swing state issue. Consensys found that 59% of voters in Michigan “prefer a free market approach to crypto” vs. the 44% who think the government should oversee the industry. Coinbase says one in eight crypto owners lives in a swing state (they included seven states here: AZ, GA, MI, NC, NV, PA and WI). </li>



<li>Americans are primarily concerned with economic issues this election year, Grayscale found, with 30% of voters ranking inflation as the “most pressing problem” in the US and 15% ranking the “state of the economy” as their top concern. </li>



<li>And last but not least, Coinbase found that 71% of Gen Z crypto owners think about crypto as much, if not more, than they think about Taylor Swift. The survey interviewed 1,577 crypto owners in the US who are eligible to vote, but did not reveal exactly how many are Gen Z. </li>
</ul>



We are now 35 days away from Nov. 5. While both <a href="https://blockworks.co/news/on-the-margin-newsletter-trump-crypto-promises">Trump</a> and <a href="https://blockworks.co/news/on-the-margin-newsletter-china-stimulus-stagnation">Harris</a> have made comments about digital assets and revealed some of their policy intentions, we have yet to see a formal, comprehensive crypto plan from either candidate.



I’ll keep my eyes peeled, but I am not holding my breath.&nbsp;



<h3 class="wp-block-heading">36&nbsp;</h3>



The number of US ports where longshoremen are on strike. The walkout, which began when the contract between the ports and members of the International Longshoremen&#8217;s Association expired at midnight Monday, marks the first strike since 1977.&nbsp;



The longer it continues, the more pressure the supply chain will face, potentially leading to higher prices for consumers. The Conference Board <a href="https://www.conference-board.org/press/port-workers-strike-could-cost-economy">says</a> a one-week strike could cost the economy $3.78 billion.&nbsp;



With a very tight presidential election just weeks away, the situation may quickly become a campaign talking point.&nbsp;



<h2 class="wp-block-heading">World Liberty Financial is open, as long as you have $1M</h2>



Enrollment for the <a href="https://blockworks.co/news/world-liberty-financial-kyc-starts">Donald Trump-backed crypto project is underway</a>, the former president announced Monday.&nbsp;



Details about World Liberty Financial, the DeFi project Trump and his family <a href="https://blockworks.co/news/on-the-margin-newsletter-trump-family-defi-venture">have been teasing for months</a>, have been slow to emerge. But yesterday we learned one more important detail: If you are a US resident looking to buy WLFI, you must be an accredited investor.&nbsp;



Because of “outdated” regulations, the whitelist is only available to accredited investors in the US, the project confirmed in the World Liberty Telegram channel Monday. Specific regulations preventing the team from opening the project to all investors were not disclosed. A second whitelist will be available for “non-US persons.”&nbsp;



The team behind the project includes Trump’s sons, Donald Jr., Eric and Barron. Chase Herro and Zachary Folkman are also involved.&nbsp;



Herro, who describes himself as “the dirtbag of the internet” founded the now-shuttered crypto trading firm Pacer Capital. Folkman and Herro also collaborated on building Dough Finance, the Aave-based DeFi platform that was exploited over the summer for $2 million.&nbsp;



The current KYC process asks users to confirm their country of residence, link their wallet, submit a proof of identification and complete a “liveness check.”&nbsp;



Accredited investors, per SEC <a href="https://www.sec.gov/resources-small-businesses/capital-raising-building-blocks/accredited-investors">guidelines</a>, are those with a minimum net worth of $1 million and individual income of $200,000. Couples can qualify with a combined income of $300,000. So, not exactly your average American.&nbsp;



We’ll be continuing to update you on World Liberty’s launch, so keep an eye on Blockworks.co for the latest.&nbsp;&nbsp;



<h2 class="wp-block-heading">Happy jobs data week!&nbsp;</h2>



Well, “happy” may not be the right word. Things kicked off a bit rocky today with latest data from the Bureau of Labor Statistics showing that job openings jumped in August.&nbsp;



There were 8 million positions open at the end of last month, compared with 7.71 million at the end of July, Tuesday’s JOLTS <a href="https://www.bls.gov/news.release/jolts.nr0.htm">report</a> shows. Analysts had expected 7.68 million openings.&nbsp;



Openings are, however, down 1.3 million year over year.&nbsp;



Overall, it’s a weak report. Job openings are up, hiring is about the same (5.3 million hires were reported at the end of August), quits are down and layoffs/firings are about the same (1.6 million in August). Translation: It’s hard to find a job.&nbsp;



With labor currently being the Fed’s number one priority, the report unsurprisingly moved expectations of a 50-basis point cut in November up. Odds of a 25bps decrease now sit at 61%, compared to 65% yesterday, according to data from <a href="https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html?redirect=/trading/interest-rates/countdown-to-fomc.html">CME Group</a>.&nbsp;



This is one of many reports this week though, so we’ll have to see what the other numbers say before drawing any major conclusions about the health of the labor market. Next up is the ADP employment report on Wednesday, followed by initial jobless claims and the September labor report on Thursday and Friday, respectively.&nbsp;



<h2 class="wp-block-heading">Bulletin Board&nbsp;</h2>



<ul class="wp-block-list">
<li>Robinhood Crypto today launched crypto transfers in the EU, enabling European customers to deposit and withdraw more than 20 cryptocurrencies, the company <a href="https://www.globenewswire.com/news-release/2024/10/01/2955809/0/en/Robinhood-Crypto-Launches-Crypto-Transfers-in-Europe.html">announced</a>. It’s also offering a 1% deposit match for a “limited time.” </li>



<li>Crypto hacks increased during the third quarter, with a total of $753 million exploited, according to a new report from cybersecurity team Certik. </li>



<li>Excited for Permissionless III next week? We are too! Escape the conference center for a bit and sign up for the <a href="https://edgein.io/events/pickleball-tournament/">official pickleball tournament</a>. Spots are limited, so act fast. </li>
</ul>



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