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This Week's Top Stories

"Morgan Stanley will allow its financial advisors to offer Bitcoin spot ETFs to qualified investors"

• Morgan Stanley on Friday told its army of financial advisors that it will soon allow them to offer Bitcoin spot ETFs to qualified investors. The firm’s 15’000 or so financial advisors can solicit eligible clients to purchase shares of two BTC spot ETFs starting August 7, 2024.
• As we have mentioned before, many big traditional finance firms have not yet internally approved the Bitcoin spot ETFs. Morgan Stanley is now among the first major Wall Street banks to do so, a promising step worth observing.

"Markets give off ‘Black Monday’ vibes as stocks tank"

• Japan’s Nikkei Index experienced its worst day since the 1987 Black Monday crash. The VIX volatility index shot up more than 170% to its highest level since the COVID crash in 2020, while the S&P500 and Nasdaq fell between 4% and 5% before the market opened on Monday. Bitcoin and the crypto market took a hit as well, with Bitcoin trading below $50’000 for the first time since February 2024.
• The market crash on Monday was driven by several key factors, such as last week’s BoJ rate hike, the second hike in 17 years, U.S. unemployment numbers, geopolitical uncertainty in the Middle East, and last week’s drop in 10-year Treasury yields. Our Bitcoin Suisse Research Team published this ad hoc report on the recent price developments on Monday. You can read it here.

"Jump Crypto moves hundreds of millions in crypto as prices slide"

• Addresses tagged as belonging to trading firm Jump Crypto have seen an inflow of about $300 million since over the weekend. It seems that Jump Trading has redeemed wstETH worth $410 million and then transferred them to exchanges. As Jump was transferring their ETH, the market continued to drop sharply over the weekend and on Monday.
• While there was already a lot of uncertainty in the crypto markets due to the previously mentioned macro factors, the news surrounding Jump Trading likely added fuel to the downward movement, as many media outlets and accounts on X were talking about it.

"Japan’s Nikkei sees best day since October 2008; logs record single-day jump in points"

•  Japan’s stocks rebounded sharply on Tuesday after the Nikkei 225 dropped over 12% in Monday’s trading session. Other Asia-Pacific markets were mostly higher.
• With Japan leading the rebound on Tuesday, U.S. markets also recovered most of their losses from Monday, starting on Tuesday. With the BoJ walking back on their talk of rate increases on Wednesday, some of the uncertainty in this regard was taken out of the market again.

"Ripple fined $125 million, court denies full SEC demand"

• Ripple has been fined $125 million as part of its years-long litigation with the U.S. Securities and Exchange Commission, which is a lot lower than the SEC's proposed $2 billion. Judge Torres also ordered Ripple on Wednesday to stop violating securities laws in the future. 
• The market interpreted the news regarding Ripple as positive, as XRP jumped up by almost 30% right after the announcement was published. The ruling is seen as a win for Ripple as it clarifies that while some of Ripple’s XRP sales were found to be unregistered securities offerings, XRP itself is not considered a security. It will be interesting to see how this eventually unfolds, as the SEC will continue to fight some aspects of the case.

Chart of the Week

This week we are looking at the Solana vs. Ethereum chart, which, despite the launch of the Ethereum spot ETFs two weeks ago, indicates an outperformance of Solana. This week, it reached a new all-time high against Ethereum with a bullish structure in place. As we have mentioned in previous Weekly Wraps, Solana is outperforming Ethereum in various areas, such as monthly DEX trading volume or the number of tokens issued per month.

What’s Happening On-Chain?

Eric Trump, son of former U.S. President Donald Trump, has hinted at a possible token launch in a post on X on Tuesday. He mentioned that he has truly fallen in love with crypto / DeFi and to stay tuned for a big announcement. Over the last few days, ‘on-chain degens’ have been very active in launching various coins, with tickers that could have a possible connection to Trump’s announcement. On Thursday, a token with the ticker RSR was making the round on X, and it was pushed by various influencers on social media. RSR stands for ‘Restore The Republic’ and the project reached a market capitalization of over $150 million before losing 95% of its value in a rug pull when Eric Trump tweeted that the official project has not been launched yet.

Digital Asset Fund Flows

Digital asset investment products were not immune to last week’s macro turmoil and saw outflows for the first time in a month, with a total of $528 million of outflows. Bitcoin made up the largest part of the flow, with $400 million flowing out of Bitcoin products. While the U.S. and Hong Kong saw outflows, the U.S. had $531 million and Hong Kong had $27 million, respectively. Switzerland saw inflows of more than $27 million last week. Ethereum saw outflows of $146 million last week.

This week, the BTC spot ETFs started with outflows on Monday and Tuesday but have since recovered and saw inflows on Wednesday and Thursday. As of Thursday, the week so far sits at outflows of $77 million for the Bitcoin spot ETFs. On Monday, the daily volumes for the BTC spot ETFs reached a new multi-month high. Interestingly, for Ethereum, it was the exact opposite, starting the week with two inflow days and now sitting at weekly inflows of $121 million so far after two days of small outflows. Something to note here is that the outflows from Grayscale have slowed down significantly over the last two weeks.

While there are no other crypto spot ETFs approved in the U.S. and we are still waiting on a decision for a Solana spot ETF, which is expected to be made in spring 2025, the Brazilian Securities and Exchange Commission (CVM) has approved the first Solana spot ETF this week. Currently, the ETF is in its preliminary operational phase and still requires approval from B3 due to regulatory reasons. It is expected to be launched within 90 days.

Market Sentiment

On Monday and Tuesday this week, the crypto market sentiment reached new lows, with the crypto fear and greed index dropping deep down into Extreme Fear territory (17), its lowest level since the end of 2022 – the time when Bitcoin was trading below $16’000 in light of the FTX crash. Market sentiment has recovered quite a bit since then, with the index being in Neutral territory at 48 today. The stock market is still in Extreme Fear today at 24, and it also visited lower levels during the week, reaching 16, its lowest level in more than a year. Investor sentiment is a good metric to keep track of. Do you remember in our Weekly Wrap on July 19, 2024, when 52.7% of AAII members were bullish on the stock market? It was the first time in a while that more than 50% were bullish, well, now this number has dropped to 40.5%, with the amount of people being bearish (37.5%) being at the highest level since the beginning of November last year.

In Other News

• Nasdaq and BlackRock plan to list and trade options for its Ethereum spot ETF – link
• Michael Saylor owns more than $1 billion in Bitcoin – link
• Kamala Harris flips Donald Trump on Polymarket betting odds for first time – link
• Weekly jobless claims fall to 233’000, less than expected, in a positive sign for the labor market – link
• Tether plans to double its staff to 200 in the next year to strengthen compliance, etc. – link
• UPDATE: There's definitely some movement on Bitcoin ETF options – link

The Week Ahead

While we have experienced a very rough start to the week, with Bitcoin trading below $50’000 and Ethereum reaching its lowest price since January this year, prices have since recovered quite a bit. Bitcoin is trading at $61’000 at the time of writing, with a green weekly candle. The weekly close on Sunday will be important to observe, managing to close the week positively would be a good sign for the markets. With market sentiment reaching new lows this week and prices rebounding, it is difficult to know where we are headed. While it is possible to trade lower in the short term, indicators such as the activity of large Bitcoin holders are signaling that 'smart money’ is betting on a rather positive development in the longer term, as we have mentioned in our ad hoc report on Monday. The release of next week’s inflation data will be a key release of economic data, and remember to keep an eye on the target rate probabilities for the Fed meeting in September.

Below you can find some of the key data releases to watch out for next week.

Monday, 12 August 2024

• Japan – PPI

Tuesday, 13 August 2024

• U.S. – PPI, Core PPI

Wednesday, 14 August 2024

• EUR – Inflation data in Great Britain and France
• EU – GDP
• U.S. – CPI, Core CPI
• Japan – GDP

Thursday, 15 August 2024

• CH – PPI
• U.S. – Initial Jobless Claims