701 new funds have spot BTC ETF Circle proposes capital risk framework

Headline

▌13F Reports: 701 New Funds Hold Spot Bitcoin ETFs

After the deadline for filing second-quarter 13F reports on Wednesday, 701 new funds reported holdings of bitcoin spot ETFs, bringing the total number of holders to nearly 1,950.  

Hedge funds, pensions and banks continue to invest heavily in bitcoin spot ETFs as more traditional investors begin to embrace the asset class. Capula Investment Management, Schonfeld Strategy Advisors and Steven Cohen's Point72 Asset Management also reported ETF holdings. Other buyers include the Wisconsin Investment Board and corporate market makers from Hong Kong to the Cayman Islands, Canada and Switzerland.

▌Circle Proposes New Capital Risk Framework for Stablecoins

Circle recently released a white paper titled "Risk Capital for Stable Value Tokens" that proposes a new risk-based capital management model for stablecoins and other digital cash tokens. The authors of the white paper believe that stablecoins require adequate capital reserve requirements that go beyond the current capital standards established under the Basel banking regulatory framework to mitigate risks unique to stablecoins, other legal equivalent tokens, and their issuers. According to the authors, these unique risks include, but are not limited to, a decline in token prices due to market trading and the prevalence of secondary markets, followed by a "run" on digital tokens due to excessive selling, operational risks, and technical risks.

Market

As of press time, according to Coingecko data:

BTC's latest transaction price is 57,620.75 US dollars, with a daily increase or decrease of -1.9%;

ETH's latest transaction price is 2,570.04 yuan, with a daily increase or decrease of -3.5%;

BNB's latest transaction price is 519.93 US dollars, with a daily increase or decrease of -0.8%;

SOL's latest transaction price is 142.85 US dollars, with a daily increase or decrease of -0.6%；

DOGE's latest transaction price is 0.1003 yuan, with a daily increase or decrease of -2.1%；

XPR's latest transaction price is 0.561 US dollars, with a daily increase or decrease of -1.3%。

Policy

▌JPMorgan Chase: Stablecoin regulation may pose a major challenge to Tether's market dominance

JPMorgan Chase pointed out in a research report on Wednesday that increasingly stringent stablecoin regulation may pose a major challenge to Tether's market dominance. Under the European Crypto-Assets Markets Act (MiCA), 60% of stablecoin reserves must be held in European banks, which may force Tether to adjust its reserve management strategy. Tether has previously come under regulatory scrutiny for its lack of transparency in the composition of its reserves, and the new regulations will further increase the pressure on it to disclose detailed information and conduct audits. JPMorgan believes that if it fails to comply with these new regulations, Tether's dominance in the stablecoin market will be threatened.

Blockchain Applications

▌Developer Robin Linus Releases "BitVM2" to Improve Bitcoin Programmability

Bitcoin developer Robin Linus released "BitVM2", an improved version of last year's "BitVM" paradigm, which aims to improve Bitcoin's programmability and push the concept closer to real-world applications. "BitVM2" introduces a "permissionless challenge" feature that allows anyone to question suspicious transactions, solving key deficiencies in the original version. The project uses advanced cryptography and new designs to create a secure "bridge" that enables Bitcoin to be transferred from the main network to the "rollups" secondary network and eventually back to the main network. Linus' project is seen as a breakthrough because it does not require changes to Bitcoin's underlying code. The new design simplifies bridge operations and improves capital efficiency, and is expected to bring broader application prospects to the Bitcoin ecosystem.

Cryptocurrency

▌Gift card giant Raise partners with WalletConnect to launch crypto payment function

Gift card company giant Raise has partnered with WalletConnect to add support for multiple mainstream digital wallets, including MetaMask, Phantom and Coinbase Wallet. Through this integration, users will be able to use ETH, DOT, BTC and SOL tokens as well as USDC and USDT stablecoins for in-app payments, and plans to add support for more cryptocurrencies.

Founded in 2012, the company has more than 6 million customers and has established direct partnerships with more than 1,000 major retailers. The company has facilitated more than $10 billion in transactions through its consumer apps, exchange, and B2B business, and Raise also plans to integrate blockchain more deeply into its technology stack and expand its crypto payment options to 30 countries by the end of this year.

▌Donald Trump Jr. Launches Telegram Channel "The DeFiant Ones" for His Crypto Project

Donald Trump Jr. announced the launch of the Telegram channel "The DeFiant Ones" on the X platform to introduce his upcoming crypto project. In a post on X, he said: "There are many rumors about our crypto project. To know the real situation and stay up to date with official announcements, join our official Telegram channel. Don't rely on speculation – get news directly here!" 

The name of the channel "The Defiant Ones" matches the recent trademark application. In July, a company called AMG Software Solutions filed trademark applications for "Be DeFiant", "World Liberty" and "World Liberty Financial". According to its application, this third trademark is used for "providing financial information in the field of decentralized finance (DeFi)". Coinbase returns to Hawaii to focus on European market expansion Coinbase has refocused on the EU and the UK after returning to the Hawaii market. Previously, Coinbase withdrew from the state in 2017 due to Hawaii's regulatory requirements, but the company re-entered the Hawaiian market as new regulations on July 1, 2024 eliminated the money transmission license required for digital currency activities. Faryar Shirzad, Coinbase's chief policy officer, said the move reflects the trend of gradual clarification of cryptocurrency regulation around the world. Coinbase is now able to provide services in all 50 states in the United States and plans to advance its business expansion in the European Union and the United Kingdom, especially in the context of the EU's "Markets in Crypto-Assets" (MiCA) regulations coming into effect in 2024. Coinbase has also obtained licenses in Germany, Ireland and other places, and is committed to developing the European Union into its main market outside the United States.

▌Soros and other billionaires' investment firms cut their holdings in the "Big Seven" tech stocks long before the summer plunge

Early before this year's euphoric rally in technology stocks turned into a sharp decline in mid-July, George Soros and Stanley Druckenmiller's investment firms cut their holdings in the "Big Seven" tech stocks. Soros Fund Management sold a portion of its Alphabet holdings totaling $58 million, and about $15 million of Amazon shares, according to regulatory filings for the three months ending in June. Druckenmiller was among the investors who cut their holdings in Nvidia. The market's enthusiasm for artificial intelligence companies has accompanied the chipmaker's stock price. His Duquesne Family Office reduced its holdings by more than 1.5 million shares, the filings show. Meanwhile, David Tepper's Appaloosa Management reduced its three largest positions - Amazon, Microsoft and Meta, continuing similar reductions disclosed in late March. David Bonderman’s Wildcat Capital Management also reduced its holdings in Meta during the quarter, selling $24 million worth of shares. ▌ GOAT Network, the Bitcoin L2 Protocol, Releases Economic Model GOAT Network, which calls itself “the first Bitcoin layer 2 with shared network ownership,” has released its economic model. According to the team: "The briefing outlines GOAT Network's economic model, reveals how its BTC layer 2 addresses challenges in security and limited BTC revenue, and leverages a decentralized sorter framework with shared rewards to create sustainable BTC returns for BTC holders in BTC numeraire." 

GOAT Network said: "GOAT Network uses decentralized sorters, BitVM2 and zkVM technology to create a platform that inherits the security of the BTC mainnet while meeting the diverse financial needs of investors."

▌Listed mining companies raised a total of $2.2 billion to cope with cash flow tightening after Bitcoin halving

After Bitcoin halving, listed mining companies are turning to debt financing to increase cash flow. According to data from BlocksBridge Consulting based on earnings reports, 9 of the 13 US listed companies raised a total of $1.25 billion through stock issuance in the second quarter of 2024. These include Bitdeer, Bitfarms, Cipher, CleanSpark, Core, HIVE, Marathon, Riot and Terawulf.  

In addition, Iris Energy raised $458 million in the last quarter, bringing the total amount raised by miners to more than $1.7 billion. Another $530 million has been raised so far in the third quarter, bringing the total amount to more than $2.2 billion.

▌Analysis: Bitcoin's divergence from the US stock market today may be related to the crypto market's concerns about the liquidation and distribution of Mt.Gox

Adam Button, an analyst at the financial website Forexlive, believes that the crypto market is usually the leader of stock market sentiment, but this is not the case today. The price of Bitcoin fell 3%, but the stock market was at its high for the day, and the Nasdaq 100 rose 2.5%. This divergence may be related to the crypto market's concerns about the liquidation and distribution of Mt.Gox. In any case, the Nasdaq is now almost back to where it closed on July 31st. At that time, the Fed's decision caused the Nasdaq to rebound sharply, but then there was a brutal global crash. The rebound of the Nasdaq since last Monday has been very significant, especially compared with the intraday low on August 5th. The Nasdaq has risen 12% since then, which is a rich return for most fund managers in a full year. Part of the reason behind this rebound trade is the rebirth of artificial intelligence trading, but it is mainly due to renewed confidence that global economic growth is in good shape.

Important Economic Dynamics

▌Institution: Strong US consumer spending dispels concerns about recession

US retail sales spending rose 1% month-on-month to $709.7 billion in July, dispelling concerns that the economy may fall into recession. Although the slowdown in hiring caused a brief but sharp market panic last week, the strong retail data showed that the impact of any contraction has not spread to consumers. "The slowdown is happening, but it's definitely measured and there's really nothing to worry about," said Jeffrey Roach, chief economist at LPL Financial. ▌ U.S. Money Market Fund Assets Hits Record High U.S. money market fund assets hit record highs as money further flocks to quality assets after a global sell-off in risk assets last week sent investors scurrying for cash. About $28.4 billion flowed into U.S. money market funds in the week ended Aug. 14, pushing total assets to an all-time high of $6.22 trillion, according to the Investment Company Institute. Retail investors have piled into money funds since the Federal Reserve began one of its most aggressive tightening cycles in decades in 2022. So far, inflows have continued even as investors expect the Fed to start cutting interest rates soon.

▌The probability of the Fed cutting interest rates by 25 basis points in September has risen to 74%

According to CME's "Fed Watch", the probability of the Fed cutting interest rates by 25 basis points in September is 74%, and the probability of cutting interest rates by 50 basis points is 26%. The probability of the Fed cutting interest rates by 50 basis points by November is 63.8%, the probability of cutting interest rates by 75 basis points is 32.6%, and the probability of cutting interest rates by 100 basis points is 3.6%.

▌Powell will have a window to set the tone for the September interest rate cut next Friday

Fed Chairman Powell is scheduled to speak on the economic outlook at 10:00 p.m. Beijing time next Friday, the first full-day meeting day of the Kansas City Fed's annual economic seminar in Jackson Hole, Wyoming. The annual gathering of global central banks provides Powell with an opportunity to give an updated assessment of the trajectory of the U.S. economy and the outlook for monetary policy between the Fed's July and September policy meetings. Last month he said the Fed could consider a rate cut at its next meeting if inflation and the labor market continue to cool.

Golden Encyclopedia

▌What is Zero-Knowledge Proof

Zero-knowledge proof (ZKP) is a cryptographic method that allows multiple parties to verify the authenticity of a statement without revealing information other than the statement itself. Many blockchains utilize ZKP to improve the security of interactions involving sensitive data. As a result, participants in a blockchain with ZKP can interact with greater confidence because private information is less likely to be leaked or exploited by malicious actors.

Disclaimer: As a blockchain information platform, the content of the articles published by Golden Finance is for information reference only and is not intended as actual investment advice. Please establish the correct investment concept and be sure to enhance risk awareness.