ETH exchange traded-funds issuers were told by the SEC that funds can start trading July 23, according to sources.

The SEC had no further comments on the recently submitted S-1s and the final versions needs to be submitted by Wednesday.

ETH outperformed BTC on Monday, on the news of potential ETF trading approval.

Prospective issuers of a spot ether {{ETH}} exchange-traded fund (ETF) were told by the Securities and Exchanges Commission (SEC) on Monday that the funds can begin trading next Tuesday, two sources familiar with the matter told CoinDesk.

SEC officials told one issuer that the regulator had no further comments on the recently submitted S-1s and that the final versions needed to be submitted by Wednesday, one of the source said, adding that the funds can subsequently be listed on exchanges on Tuesday, July 23.

A second source said it's possible that trading could start on Tuesday, after the ETFs are deemed effective next Monday.

Bloomberg Intelligence senior ETF analyst Eric Balchunas first reported the development on a social media post.

Update: Nate's instincts were right, hearing SEC finally gotten back to issuers today, asking them to return FINAL S-1s on Wed (incl fees) and then request effectiveness on Monday after close for a TUESDAY 7/23 LAUNCH. This is provided no unforeseeable last min issues of course! https://t.co/D21FD9Qf94

— Eric Balchunas (@EricBalchunas) July 15, 2024

The issuers submitted amended S-1 documents last week but have yet to disclose some of the details, including how much management fee they will be charging investors. Only a few issuers, including VanEck and Invesco Galaxy, have so far revealed their fees.

Once live on the market, the spot ether ETFs could see inflows of up to $5 billion in the first six months, crypto exchange Gemini predicts. Steno Research said it expects inflows of up to $20 billion in the first year.

The price of ether rose as much as 7.3% on Monday, outpacing bitcoin's 6% gain, on the news of ETFs starting to trade next week. The broader market index CoinDesk 20 climbed 5.6% today.

Nik De also contributed to the reporting of this story

Read more: Ether Spot ETFs to See Up to $5B of Net Inflows in First Six Months: Gemini

Plaintiffs in an ongoing class action lawsuit against Tether and Bitfinex have filed a new, slimmed-down complaint accusing the crypto companies of manipulating the crypto markets and violating antitrust laws.

The second amended complaint, filed in the Southern District of New York (SDNY) on Monday, accuses Tether and its sister crypto exchange Bitfinex of operating a “sophisticated scheme to artificially inflate the price of cryptocurrencies” by pushing Tether’s dollar-backed stablecoin, USDT, into the cryptomarket without it being fully backed by U.S. dollars, therefore “creating the illusion of increased demand” for cryptocurrencies, “facilitating trading of [cryptocurrencies] on credit and loaned funds” and ultimately driving up crypto prices.

The complaint is the third to be filed in the same case, overseen by U.S. District Judge Katherine Polk Failla. The first complaint was filed in 2019 and an amended complaint followed in 2020.

Read more: Crypto Traders’ Lawsuit Claims Bitfinex, Tether Cost Market Over $1 Trillion

The case has had several hiccups, including the removal of the original plaintiffs’ counsel, crypto law firm Roche Freedman (now called Freedman Norman Friedland), after video recordings of attorney Kyle Roche appearing to admit to filing frivolous investor lawsuits to help client, surfaced in 2022.

In the newest iteration of the complaint, attorneys for the plaintiffs levied three causes of action against the defendants – violating the Commodities Exchange Act (CEA) via market manipulation, monopolization, and agreement in restraint of trade – the latter two causes of action both alleged violations of the Sherman Antitrust Act. It’s a slimmed down version of the previous complaints: the original complaint contained eight causes of action, and the amended complaint contained 12.

The suit contained chat and deposition logs from the companies' operators, allegedly admitting to manipulative actions.

"[Tether Chief Financial Officer Giancarlo] Devasini also acknowledged at his deposition that issuing a substantial credit line 'that is not backed by anything of an enormous amount of money' would cause customers to 'use this fake money to buy an enormous amount of Bitcoin and, therefore, the price will increase,'" the suit said.

A spokesperson for Tether said the claims in the second amended complaint, “as with the prior complaint” are “wholly without merit.”

“Ultimately, it is the facts and evidence that matters, not plaintiffs’ false and misleading allegations,” the spokesperson for Tether said. “We remain confident that we will prevail in this litigation, and that plaintiffs’ nonsensical conspiracy theories will be rejected.”

Last year, lawyers for Tether and Bitfinex filed a memorandum of opposition against the plaintiffs’ motion to amend their complaint for a second time, calling it “in reality a motion for leave to start over” after the discovery process had concluded, but in June, Failla ultimately granted the plaintiffs’ motion for leave to file the second amended complaint.

The lead plaintiffs in this case are U.S.-based crypto traders Matthew Script, Benjamin Leibowitz, Jason Leibowitz, and Pinchas Goldshtein, though several other civil class action suits and their plaintiffs have also joined the case.

Attorneys for the plaintiffs did not respond to CoinDesk’s request for comment.

Former President Donald Trump, the presumptive Republican nominee for leader of the U.S., announced he chose crypto-friendly Sen. J.D. Vance (R-Ohio) as his vice presidential candidate.

“After lengthy deliberation and thought, and considering the tremendous talents of many others, I have decided that the person best suited to assume the position of Vice President of the United States is Senator J.D. Vance of the Great State of Ohio,” Trump wrote on social media app TruthSocial.

“J.D. has had a very successful business career in Technology and Finance, and now, during the Campaign, will be strongly focused on the people he fought so brilliantly for, the American Workers and Farmers in Pennsylvania, Michigan, Wisconsin, Ohio, Minnesota, and far beyond.”

Read more: Crypto-Friendly Sen. JD Vance's Odds as Trump VP Pick Double on Polymarket

Vance’s odds of being nominated for vice president on crypto-based prediction market platform Polymarket stood at 70% on Monday, by far the highest among all competitors.

The "Hillbilly Elegy" author and venture capitalist was a favorable choice among leaders in the crypto space given its previous efforts to bring clearer legislation. He most recently drafted a bill that would revamp how the U.S. regulates digital assets, according to Politico, which sources said would be even more crypto-friendly than a bill that was passed by the House in June.

North Dakota Governor Doug Burgum and Florida Sen. Marco Rubio were also seen as likely candidates to be Trump's running mate, but were reportedly informed earlier Monday that they were out of the running.

Vance has not disclosed buying or selling any cryptocurrencies in his most recent Senate financial disclosure.

UPDATE (July 15, 2024, 19:33 UTC): Adds Vance's financial disclosure.

Crypto exchanges appear to be cracking down on who is eligible for the discounted trading fees they offer to their largest customers.

OKX, the second-largest exchange, just asked prime brokerages for more information, following changes at larger rival Binance.

Cryptocurrency exchanges are cracking down on brokerages that bundle clients' orders to enjoy lower, VIP trading fees.

In a letter reviewed by CoinDesk, OKX, the second-largest exchange by volume, recently asked prime brokers for details of subaccounts including the names of the entities or individuals that control each subaccount and the jurisdiction in which they are located. OKX said it needs the information by July 17.

"A failure to do so may result in undisclosed subaccounts being restricted from trading and/or subaccount closure," the letter said.

Earlier this month, OKX's larger rival Binance changed its Link Plus interface, effectively closing a loophole that let prime brokers use a multitiered fee system to offer rebates to clients. Binance said the measure was "to uphold compliance and ensure a level-playing field for all users, whether they access Binance directly or via an intermediary." That news was first reported by Bloomberg.

Exchanges offer their biggest customers discounted trading fees, treating them like VIPs to boost the odds they'll stick around. Prime brokerages – firms that provide trading services for professional, and often large, investors – could, in theory, funnel several customers' trading through a single account at an exchange, qualifying for those lower fees.

"This is being done very much for the purpose of disbanding clients under brokers to price them separately," said a person familiar with the prime brokerage industry who asked to remain anonymous.

OKX declined to comment.

Bybit, another large crypto exchange, is "closely monitoring the recent developments regarding the removal of the prime brokerage multi-tiered fee structure by other platforms," said Eugene Cheung, the firm's head of institutions.

"However, we have no plans to make any changes to our fee structure. Our commitment remains steadfast in ensuring compliance and the best interests of our users," Cheung said in an email.

Former U.S. President Donald Trump is still scheduled to speak, in person, at a Bitcoin conference in Nashville later this month, despite injuries he sustained from a failed assassination attempt Saturday. For crypto, this is huge.

Crypto is now on the campaign trail in an official capacity, extending beyond throwaway lines to appease whichever voting demographic and fundraising PAC is to be appeased that day. The shred of legitimacy the industry has been begging for since its inception has arrived, embodied in an orange man at a conference about an orange coin.

I’m no political strategist, but I always found it strange when presidential candidates spend time campaigning in states they have no risk of losing. Trump, or any Republican candidate for that matter, is not going to lose Tennessee in the 2024 presidential election (let’s face it, folks: Joe Biden is no Bill Clinton). And yet, Trump is stopping by a Bitcoin conference in the Volunteer State, during the immensely busy campaign season, in the same way a candidate makes stump speeches in airplane hangars for the military vote and in front of factories in the name of the American blue collar, with Teamsters in tow, for the union vote.

Even though the polls and data suggest that most people don’t use or own crypto — 7% of American adults used or held crypto in 2023 (according to the Federal Reserve), 28% of Republicans hold or had once bought crypto (according to crypto investment firm Paradigm), 52 million Americans own it (according to crypto exchange Coinbase) — it’s still part of Trump’s reelection strategy. The GOP has even added crypto to its official platform marketing materials (in the unabridged, pdf-downloadable version) under the “Champion Innovation” subpoint, just above “Artificial Intelligence” and “Expanding Freedom, Prosperity, and Safety in Space.”

Trump’s appearance in Nashville has a clear message: The content of the conference is more important than the location. There are enough single-issue crypto voters out there to make a difference for Trump.

The Republicans have been jostling (against … no one, except maybe Independents or Libertarians) to be viewed as the pro-crypto party in the United States. One example is the preemptive anti-CBDC official declarations by people like Florida Gov. Ron DeSantis (perhaps to appear anti-China and pro-capitalism). Another is the voting effort in the House of Representatives to overturn President Biden's veto of a pro-crypto resolution falling neatly on party lines (save one Republican dissenter and some bipartisan support via 21 democrats).

To me, it appears that in this election cycle, crypto is standing in as a feather in the cap for the individual freedom talking point GOP voters love, to the point where Trump has completely backtracked on his anti-crypto rhetoric. In 2019 Trump tweeted: “I am not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air. Unregulated Crypto Assets can facilitate unlawful behavior, including drug trade and other illegal activity....” Then in 2021 he said Bitcoin is a scam against the dollar” during a Fox Business interview.

But then earlier this year at a Mar-a-Lago dinner he voiced his support, saying “…if you’re in favor of crypto, you better vote for Trump”.

I am not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air. Unregulated Crypto Assets can facilitate unlawful behavior, including drug trade and other illegal activity....

— Donald J. Trump (@realDonaldTrump) July 12, 2019

Clearly, there are votes to be won and Trump wants them.

50 million voters, 100,000 votes: It’s going to get weird

We’re due a healthy scoop of reality. Say there are 50 million crypto holders, as Coinbase suggests. Are they all really single-issue voters?

No. Of course not.

In an interview with CoinDesk’s Marc Hochstein last year, founder of crypto research firm Messari and social media rabble-rouser Ryan Selkis, who has declared "‘war" against Chairman Gary Gensler's SEC and Sen. Elizabeth Warren’s (D-Mass.) anti-crypto army, tacitly acknowledged that not everyone who held crypto would vote for the pro-crypto candidate.

But you don’t even need that to win.

"Certain states are only won or lost by tens of thousands of votes. So you don't need to have 50 million people become single-issue voters. You only need a couple hundred thousand in the right areas," said Selkis.

He’s right. I submit that the 2024 U.S. presidential election will be decided by something like 100,000 votes (not the popular vote, of course, I mean net votes in the battleground states) and so if a candidate is to win, he needs as many votes as he can get in the high-stakes areas. And because President Biden appears to have no interest in dealing with or courting the crypto vote (a significant misstep, in my opinion, as appearing pro-crypto isn’t enough to turn people off a candidate so long as the positioning is correct), every single-issue crypto voter is likely to vote for Trump and try to influence those around them to also vote for Trump.

In this way, it makes perfect sense that the GOP believes crypto is a worthwhile place to win some of those critical votes.

What’s more, the conference is a spectacle which people are traveling to Tennessee for. Trump won’t be speaking to Tennessee voters, he’ll be speaking to a geographically diverse (dare I … say … decentralized?) cross-section of American voters (that is, if you can get Bitcoiners to vote …).

It simply makes too much sense. Crypto is very clearly now solidified in the mainstream. And even though crypto is weird, American politics has been weird too. And the weirdness will continue: it’s going to be weird having Secret Service agents scattered about the Bitcoin conference, it’s going to be weird that mainstream media (and not just their financial or tech reporters) will be in attendance to cover the proceedings, and it’s going to be weird when President Trump again says he wants all the remaining Bitcoin to be Made in America.

I guess that when the going gets weird, the weird turn professional.

Note: The views expressed in this column are those of the author and do not necessarily reflect those of CoinDesk, Inc. or its owners and affiliates.

BlackRock's Larry Fink said bitcoin is a legitimate financial asset that everybody should hold.

This comes as the asset manager on Monday posted better-than-expected second quarter earnings.

BlackRock's iShares Bitcoin Trust (IBIT) added $4 billion in assets during the quarter.

BlackRock (BLK) CEO Larry Fink reiterated his belief that Bitcoin {{BTC}} is an asset that everybody should consider holding as part of their portfolio.

“My opinion five years ago was wrong,” Fink said in an interview with CNBC. “I believe bitcoin is a legitimate financial instrument,”

Fink's appearance Monday morning came following BlackRock's second quarter earnings results, which topped analyst estimates as assets under management increased 13% year-over-year to $10.6 trillion.

Hard to overstate how big a deal it is for Larry Fink, who runs $10.6T, to keep giving these full throated endorsements of bitcoin as legit asset class for everyday portfolios. Buy in from BlackRock - as well as other legacy firms like Fidelity - gives boomer advisors comfort and… https://t.co/fu2EiRQco5

— Eric Balchunas (@EricBalchunas) July 15, 2024

A minor contributor to the company's AUM figure is its iShares Bitcoin Trust (IBIT), which launched in January and has accumulated more than $18 billion since, including $4 billion in the second quarter.

Bitcoin, Fink continued, should be part of every investor’s portfolio as it potentially allows for uncorrelated returns and provides financial control.

“It is an instrument that you invest in when you’re more frightened,” said Fink. "It is an instrument when you believe that countries are debasing their currency by excess deficits.”

“There’s a real need for everyone to look at it as one alternative,” he concluded.

It's a tale as old as crypto, and maybe finance itself: One little money mistake leads to another, and suddenly a company founder is down a deep hole, with investors clamoring for their funds back.

In this case one of the investors is Galaxy, the prominent crypto firm headed by former Goldman Sachs and Fortress Investment Group executive Mike Novogratz.

The company founder, Richard Kim, was previously a general partner at Galaxy Interactive, a gaming-focused venture fund under Galaxy. He also worked at the Wall Street banks JPMorgan and Goldman Sachs, following a stint at the prestigious law firm Cleary Gottlieb in the late 2000s, according to a bio. In an interview with CoinDesk, he said his cascading losses were fueled by a decades-long struggle with gambling.

Galaxy is one of several investors who have accused Kim of misappropriating at least $3.67 million of company funds belonging to Zero Edge, Kim's new blockchain startup.

Kim pitched Zero Edge as a first-of-its-kind crypto casino, meant to level the playing field and give gamblers transparency. The name suggests that the house in the casino has no advantage over its customers.

In an interview with CoinDesk, Kim said Zero Edge raised more than $7 million in funding from investors, officially closing on a seed round just two months ago. He stepped down from his role at the company after admitting to investors that he lost most of their funds in a series of bad crypto trades.

Kim told CoinDesk that the losses mounted as the bitcoin (BTC) price tumbled last month. The largest cryptocurrency's price has fallen to about $62,000 now from close to $70,000 at the start of June.

"Mr. Kim left Galaxy in March 2024 to start Zero Edge, a company in which Galaxy had an immaterial balance-sheet investment," a spokesperson for Galaxy told CoinDesk. "Upon learning of certain actions taken by Mr. Kim in his role at Zero Edge, we, along with other investors, reported his conduct to the authorities." Galaxy's spokesperson declined to specify the size of its investment into Zero Edge.

Kim said he also reported himself to the U.S. Securities and Exchange Commission's public tip line.

"Part of my rationale in reaching out proactively to the SEC was to say, OK guys, I really f—d up. I lost this money. It was grossly negligent. But I didn't intend to go run away with this money," Kim told CoinDesk.

In an email obtained by CoinDesk that was circulated to Zero Edge shareholders this month, the company said it closed a seed financing round on June 20. By the very next day, according to the email, Kim "had begun placing leveraged positions on some cryptocurrencies, resulting, over the course of the next several days, in the significant loss of company funds."

"The downfall began with a careless mistake - a phishing site that cost $80k," Kim said in his own recollection of what went wrong, which he shared with CoinDesk in a written statement. "This triggered my old demons, the need to 'make it back' to preserve my reputation."

According to Kim, he "started down a negative spiral of leverage trading, raising more capital, and hiding the truth."

"By the seed round's close," said Kim, "I was ready to rebuild, to start fresh, putting past demons aside. But the moment I received the proceeds, something snapped. I felt compelled to make up for my missteps. Within days, millions were in leveraged longs. When bitcoin crashed, I experienced a complete wipeout."

The Zero Edge incident is the latest shenanigan to hit the blockchain industry's growing venture capital scene, which has been marred by controversy since its inception. Just a week ago, CoinDesk reported that Niraj Pant, a former general partner at top-tier crypto venture firm Polychain, had broken the fund's policies by making a secret financial arrangement with a company that he helped the fund invest in.

The allegations amount to a dramatic fall from grace for Kim, who graduated from the University of Washington at age 18 and the prestigious Columbia Law School at only 21, in 2007.

Before joining Galaxy in 2018, Kim built an impressive resume in the traditional financial sector: From 2015-2018, he was a chief operating officer for Goldman Sachs' global foreign exchange and emerging markets trading division, where he helped to lead a buildout of the Wall Street firm's digital-assets franchise in 2018. Before that, he was the co-COO of global foreign exchange and emerging markets trading at JP Morgan.

Kim says he remains intent on building out his vision of a blockchain-based casino and "has every intention" of paying back his investors. He disagrees with decisions made by his partners and the company's board to, in his view, wind the company down.

Zero Edge did not immediately respond to a request for comment.

"We basically have a year of runway to build this thing," Kim said in his interview with CoinDesk. "Instead, the company was forced down the path – for reputational risk mitigation – to basically shut everything down, which, in my opinion, was not the optimal decision for the broader set of investors in the company."

"I messed up catastrophically. But I refuse to give up," Kim added in his written statement. "To my investors: you didn't just back a project; you invested in my vision, my potential. I will continue building because the world desperately needs what we started. It is precisely the fact that I have proven untrustworthy that compels me to create trustless systems."

In his statement, Kim cited the Jungian Swiss psychologist Marie-Louise von Franz, in turn quoting the Swiss psychiatrist Carl Jung himself as once saying, "To be in a situation where there is no way out, or to be in a conflict where there is no solution, is the classical beginning of the process of individuation. It is meant to be a situation with solution... Normally the anima does not take a man by the hand and lead him right up to Paradise; she puts him first into a hot cauldron where he is nicely roasted for a while."

Phnom Penh-based Huione Pay received the crypto between June last year and February this year.

Huione Pay is a payments company linked to Cambodia's ruling family.

A Cambodian currency exchange and payments company received over $150,000 worth of crypto from a wallet associated with North Korean hackers Lazarus, Reuters reported on Monday.

Phnom Penh-based Huione Pay received the funds between June last year and February this year, according to the report, which cited blockchain data. The crypto was stolen by hackers from Lazarus from three crypto companies in June and July last year, Reuters said.

Huione Pay said it did not know it had "received funds indirectly" from the hacks in a statement, according to the report.

The National Bank of Cambodia told Reuters that the company is not allowed to deal or trade crypto and that it would "would not hesitate to impose any corrective measures" against the platform.

Huione Pay is a payments firm linked to Cambodia's ruling family. Also part of the group in Huione Guarantee, a marketplace that crypto-tracing firm Elliptic said hosts merchants whose customers include scam artists such as those developing so-called pig-butchering schemes.

Huione Pay did not respond to CoinDesk's request for comment.

Read More: Be Warned, AI Crypto Scams Are on the Rise

CoinDesk Indices presents its daily market update, highlighting the performance of leaders and laggards in the CoinDesk 20 Index.

The CoinDesk 20 is currently trading at 2154.67, up 8.2% (+163.12) since last Friday's close.

All 20 assets are trading higher.

Leaders: ICP (+26.1%) and XRP (+13.7%).

Laggards: LTC (+1.2%) and UNI (+3.7%).

The CoinDesk 20 is a broad-based index traded on multiple platforms in several regions globally.

This week in prediction markets:

The head of the U.S. Secret Service will probably not be fired.

Trump's odds of victory in November remain at all-time highs while traders debate the would-be assassin's political leanings.

Bitcoin is going to stay above $58k by the end of the week.

The Wall Street Journal's front page spelled it out clearly: "Trump Shooting Is Secret Service’s Most Stunning Failure in Decades."

But will heads roll?

Probably not, says a Polymarket contract asking if the director of the U>S. Secret Service will be fired.

"Yes" shares are trading at 71 cents, meaning the market sees a 71% chance that Kimberly Cheatle will still be in her job on Sept. 1, when the contract expires.

Each share pays $1 if the prediction turns out to be correct, and zero if not. The bets are settled in USDC, a stablecoin, or cryptocurrency pegged to the dollar, and programmed into a smart contract, or software application, on the Polygon blockchain.

Volume for this contract is thin, to be sure, just shy of $7,000, paling in comparison to the hundreds of millions riding on the outcome of the presidential election on Polymarket.

The shooting at Trump's rally Saturday created severe concerns about the Secret Service's planning. As the Journal reported, a nearby rooftop with an exposed view of the podium was not closed off prior, giving Thomas Matthew Crooks, identified by authorities as the would-be assassin, a vantage point. An eyewitness who spoke with the BBC claimed he spotted the gunman moments before shots rang out, compounding the narrative that this was a stunning failure on the authorities' part.

Congress is demanding answers.

The Secret Service slip-up has prompted lawmakers to propose enhanced protections, including for independent candidate Robert F. Kennedy Jr., who has relied on private security after being denied a Secret Service detail. Last September, an armed individual impersonating a U.S. Marshal was arrested at one of Kennedy's events.

The top holder of the No side of the Polymarket contract, who goes by the handle 69696969, also holds a $9,100 position taking the view that Biden will finish his term, and a $4,400 position that Trump will not be in prison before election day.

Other shooting-related contracts have popped up.

Bettors are saying there's a 94% chance the gunman was a rogue actor not affiliated with a larger entity ($27,510 bet), while surprisingly there's an 83% chance his political leanings were Republican ($121,494).

Failed Assassination Plot Boosts Trump's Victory Odds

Trump's defiant fist was seen around the world in the moments after the failed assassination attempt in Pennsylvania.

Bettors on Polymarket believe this momentum will bolster his chances of re-taking the White House in November, as the "Yes" side of a contract asking if he'll win the election has edged past 70 cents to 71 cents, representing a 71% chance of his victory.

This is Polymarket's largest contract, with $258 million staked.

All the while, many of the largest traders on both sides of the debate kept their positions static, neither adding nor selling off their holdings.

The only two large traders that made any sort of move were Xav, who purchased almost $9,000 of the no-sided contracts starting an hour after the event, and GenMaiCha, who added over $16,000 on the Yes side the day following the shooting. Most of the new volume has come from new traders to the contract.

Bitcoin Steady, Will Remain Above 58K by Week's End, Say Bettors

Bitcoin began the week strong, as a Trump bump pushed the world's largest digital asset up 7% to above $62,500.

As CoinDesk reported earlier, some market observers have said that the assassination attempt on the pro-crypto presidential candidate increased market speculation about his potential election victory, which is seen as favorable for the cryptocurrency market due to his supportive stance on crypto regulation.

Polymarket bettors are saying the price is stable, at least for now, as there's a 93% chance of it trading above $58,000 by the end of the week.

The next Federal Open Market Committee is scheduled for the end of July, and a weakening labor market could prompt the Fed to cut rates even though inflation is still above its 2% target, which, in turn, would be bullish for the price of risk assets including crypto.

And if not in July, there's a 79% chance of a Fed rate cut by September, according to traders on Kalshi, a U.S.-regulated prediction market site where bets are settled in greenbacks.

And, Lastly...

He either does or doesn't, two options: 50/50

— tabula rasa delenda est (@robvfour) July 15, 2024

This article originally appeared in First Mover, CoinDesk’s daily newsletter, putting the latest moves in crypto markets in context. Subscribe to get it in your inbox every day.

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Bitcoin rose to over $62,500 following the weekend attack on Donald Trump, which seems to have also boosted the former president's chances of winning a second term in November. Having cemented himself as the pro-crypto candidate compared with President Joe Biden, Trump's election prospects have become a metric for the cryptocurrency market. BTC has rallied over 7% since the failed assassination attempt in Butler, Pennsylvania. At the time of writing, it is priced at $62,476, an increase of 3.95% in the last 24 hours. The broader digital asset market, as measured by the CoinDesk 20 Index (CD20), has risen by 3.32%.

The probability of Donald Trump retaking the White House jumped to an all-time high on Saturday after the shooting at the Pennsylvania rally, according to traders on Polymarket. "Yes" shares in Polymarket's contract on whether Trump will win the presidency climbed 10 cents after the incident to 70 cents, meaning the market now sees a 70% chance he will prevail in November's election. Each share pays out $1 if the prediction comes true, and zero if not. Meme tokens named after Trump also surged after the shooting. MAGA, for example, rose 34% on a 24-hour basis to $8.38, according to CoinGecko data, and the satirical TREMP added 67% to $0.6471. BODEN, a joke asset named after Biden, slipped about 15% over 24 hours to $0.0333115.

Alexey Pertsev, the co-founder and developer behind Tornado Cash, was denied bail by a Dutch court on Friday. Pertsev's lawyers were seeking bail to allow the Russian to prepare for his appeals process, but the court said "that continuing his detention does not obstruct his possibility to prepare his defense,” Keith Cheng, Pertsev's lawyer said according to the report. Pertsev was found guilty of money laundering by a Dutch judge at the s-Hertogenbosch court in May and handed 64 months prison time by the court. The verdict sent shock waves within the community leaving several outraged. The case has been described as the most pivotal legal case in crypto.

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Gradwell becomes head of economics at Tether, having spent over six years at Chainalysis.

His goal at Tether is to help communicate how USDT is supporting dollar hegemony.

Tether has hired the chief economist from blockchain analytics firm Chainalysis, Philip Gradwell, to take up a similar position at the stablecoin giant, where he will be responsible for quantifying the Tether economy to regulators, the company said on Monday.

Gradwell spent over six years as chief economist at Chainanalysis, and will take up the role of head of economics at Tether.

Tether, which mimics the U.S. dollar with blockchain-based token USDT, is far and away the largest stablecoin in circulation, with over $112 billion market capitalization.

“My goal at Tether is to shift this conversation towards understanding how digital assets are used in the real economy, and how USDT is supporting dollar hegemony,” Gradwell said in a statement.

The world's largest asset manager, BlackRock (BLK), said assets under management (AUM) climbed through $10 trillion in the second quarter.

AUM rose almost 13% from the year-earlier period to $10.6 trillion, while earnings per share (EPS) rose to $9.99 from $9.06, the company said in a statement. Revenue increased 7.7% to $4.8 billion.

BlackRock is the largest public holder of bitcoin by virtue of its iShares Bitcoin Trust (IBIT) exchange-traded fund (ETF), which now holds more than 300,000 BTC

BLK shares rose 1.2% to $838 in pre-market trading.

Read More: BlackRock's BUIDL Fund Tops $500M as Tokenized Treasury Market Soars

Alexey Pertsev was denied bail by a Dutch court on Friday, according to DLNews.

Pertsev's lawyers were seeking bail to allow the Russian to prepare for his appeals process

Alexey Pertsev, the co-founder and developer behind Tornado Cash, was denied bail by a Dutch court on Friday, according to DLNews.

Pertsev's lawyers were seeking bail to allow the Russian to prepare for his appeals process but the court said "that continuing his detention does not obstruct his possibility to prepare his defense,” Keith Cheng, Pertsev's lawyers said according to the report.

Pertsev was found guilty of money laundering by a Dutch judge at s-Hertogenbosch court in May and handed 64 month prison time by the court. The verdict sent shock waves within the community leaving several outraged. The case has been described as the most pivotal legal case in crypto.

Last month, Pertsev was denied digital facilities like a computer despite an 18 point presentation by Cheng to reflect that the case revolves around technical aspects of DeFi. Pertsev is a crucial source of knowledge for the kind of preparation that "cannot be done by a lawyer," Cheng told DLNews.

Ameen Soleimani, Pertsev's friend who has started JusticeDao to help coordinate the legal defense in the Tornado Cash cases, wrote on X that "even if his appeal attempt is accepted, he will have to sit in prison for the next year or so while his defense lawyers prepare for the appeal hearing."

Read More: Crypto Community Voices Outrage at Tornado Cash Developer Verdict

The Spain National Fan token (SNFT) has dropped 20% in the past 24 hours.

The losses likely represent "sell-the-fact" losses following Spain's victory in UEFA championship.

Spain is reveling in the UEFA 2024 soccer championship victory, but the national team's official cryptocurrency, the Spain National Fan token (SNFT), is unenthused.

On Sunday, Spain defeated England in the finals of the UEFA tournament, clinching a record fourth European Championship title as England's decade-long wait for a major tournament win continued.

Still, the SNFT token has dropped by 20% to $0.024 in the past 24 hours and had a market capitalization of $565,000 at press time, according to Coingecko. Meanwhile, leading fan tokens like the Paris Saint-Germain Fan and FC Barcelona Fan tokens traded 2% to 4% higher alongside a renewed upswing in market leader bitcoin's price.

The national team launched the SNFT token in 2021 in partnership with the Royal Spanish Football Federation and the Turkish blockchain platform Bitci. The token aims to enhance fan engagement and deliver a privileged experience for sports enthusiasts and investors.

SNFT's price swoon likely represents a "sell the fact" loss. Prices surged just over 70% to $0.03845 in the three days leading up to the final. According to a research paper, fan tokens generally tend to experience anticipatory gains before the tournament and slide following the event. The so-called "buy the rumor, sell the fact" phenomenon was observed in the fan token market during the FIFA World Cup of 2022.

That said, researchers are divided on the impact of soccer tournaments on the market value of fan tokens.

A 2022 paper by Mieszko Mazur and Miguel Vega studied the correlation between fan tokens and field performance. The study showed that team performance does not affect fan token valuation irrespective of the tournament, and it added that these tokens tend to be volatile.

"Even though a high first-trading day return of 150% was found, in the long-term, fan tokens underperform major crypto benchmarks such as Bitcoin (BTC) and decentralized finance (DeFi) coins," the study said.

Meanwhile, another study showed bigger tournaments like the Champions League affect fan tokens due to the broader audience and high tournament prestige compared to the regional leagues.

BTC tops $62,000 as Trump shooting boosts odds of election victory.

Yuan and Mexican peso trade weak, while Treasury futures point to higher yields.

Assets linked to U.S. Republican candidate Donald Trump's probability of winning the Nov. 4 elections are seeing renewed volatility following an attempted assassination of the former president on Saturday.

Bitcoin {{BTC}} has rallied 7% to $62,500 since the weekend attack, which has boosted the pro-crypto candidate's probability of winning the elections to 70% on Polymarket.

The leading cryptocurrency by market value has surpassed the crucial 200-day simple moving average (SMA), a widely-tracked gauge of long-term trends and a trendline characterizing the downtrend from early June highs in a positive sign for momentum traders, CoinDesk data show. Trump-themed Polifi tokens, marking the intersection of politics and finance, have surged as well.

In recent months, Trump has reversed course and embraced crypto to outflank his rival, Joe Biden, and win over the supposedly single-issue crypto community, which is seeking a friendlier regulatory environment for the industry. As such, bitcoin and the broader crypto market have become bets on Trump's victory. The former president is committed to speaking at the Bitcoin 2024 conference in Nashville, Tennessee, on July 27.

"The biggest fundamental news over the weekend was the Trump assassination attempt. Absolutely insane. This has improved the odds of a Trump presidency. Trump being the pro-crypto president should help galvanize the cryptocurrency bids," Greg Magadini, director of derivatives at Amberdata, said in an email.

Elsewhere, the Chinese yuan (CNY) traded lower against the U.S. dollar as a potential Trump victory could mean higher trade tariffs. Early this year, Trump suggested revoking China's "most favored nation" status for U.S. trade and imposing tariffs of more than 60% on Chinese goods. The Mexican peso (MXN) also slipped due to Trump's terse relations with the Latin American nation during his previous Presidential reign.

Prices for futures tied to the 10-year Treasury note fell, hinting at higher yields as Trump's return to the White House would mean more spending, tax cuts, and higher budget deficits. Several investment banks are betting that potential Trump victory would steepen the presently inverted yield curve in the coming months. Historically, sharp steepening has led to broad-based risk aversion in financial markets.

Futures tied to the S&P 500 traded 0.18% higher as of writing, signaling a positive open on Monday even as Asian stocks dipped on the back of disappointing economic growth figures in China. The dollar index, which tracked the greenback's value against major fiat currencies, traded 0.10% higher at 104.19, according to TradingView.

Former U.S. president Donald Trump's probability of retaking the White House jumped to an all-time high Saturday after he was injured from a shooting at a rally in Pennsylvania, according to traders on Polymarket.

A Secret Service spokesman said the Republican presidential candidate was "safe" after the shooting, according to The New York Times. A suspected gunman was killed, and a spectator died as well, the newspaper said. Photos and video footage of a defiant Trump with blood on his face pumping his fist in the air circulated on social media, following two weeks in which the national conversation had focused on the frailty and gaffes of his opponent, incumbent President Joe Biden.

Appears he’s ok; pumping his first here. My lord, this is crazy pic.twitter.com/N5Mp8Ible1

— @jason (@Jason) July 13, 2024

"Yes" shares in Polymarket's contract on whether Trump will win the presidency climbed ten cents after the incident, to 70 cents, meaning the market now sees a 70% chance he will prevail in November. Each share pays out $1 if the prediction comes true, and zero if not. Bets are programmed into a smart contract on the Polygon blockchain and settled in USDC, a stablecoin, or cryptocurrency that trades 1:1 for dollars.

"Polifi" meme tokens named after Trump also surged. MAGA, for example, was up 34% on a 24-hour basis to $8.38, according to CoinGecko data, and the satirical TREMP had climbed 67% to $0.6471.

The CoinDesk 20 index, a proxy for the overall cryptocurrency market, is up 3.31% on a 24-hour basis. Bitcoin, the oldest and largest cryptocurrency by market cap, is up 3.26% to $59,735.17. Trump has expressed wholehearted support for crypto on the campaign trail, and the Republican platform vows to halt the Biden administration's "crackdown" on the industry.

Polymarket, founded four years ago by Shayne Coplan, has seen boffo trading volumes in 2024 amid enthusiasm for political betting ahead of the U.S. election. The U.S. presidential winner contract has a total of $252 million in bets placed, a record for the company and for crypto-based prediction markets, if not all prediction markets.

PredictIt, an older, more traditional betting site where wagers are settled in fiat, showed a similar trend, with Trump shares climbing from 59 cents before the shooting to 66 cents before leveling off at 65 cents.

Prediction markets are often called a more reliable gauge of sentiment and method of forecasting than polls because the people making predictions are putting money on the line, and are therefore incentivized to do thorough research and express honest opinions.

Most of us don’t think twice when popping something into ChatGPT. We’ve gone from expecting results for “Thai food near me” in a few seconds to itineraries for a two-week food tour around Thailand just as quickly. The end-user experience for this doesn’t feel very different. But from an energy standpoint, a lot has changed.

A ChatGPT search reportedly uses ten times as much power as a Google search query. With the current energy infrastructure already nearing its limits, the GenAI industry is worried about overloading data centers and returning to non-renewable energy sources. Even Open AI’s Sam Altman has called for clean energy to solve the impending GenAI compute crisis.

This op-ed is part of CoinDesk's new DePIN Vertical, covering the emerging industry of decentralized physical infrastructure.

Decentralized compute networks offer a promising answer to the GenAI energy question. Leveraging DePIN will encourage technology development, democratize access to powerful resources, and onboard more users into web3. Who says crypto can’t be green?

DePIN’s energy potential

The solution to powering the GenAI explosion could very well be in your home office. Decentralized networks can leverage the power of edge nodes operated from computers and laptops. If a computer meets the minimum hardware requirements, a user can set up the node operating dashboard in a few minutes. The network then uses untapped GPUs to run compute tasks in the background. Decentralized edge computing can also help balance the computational load more effectively. By processing data closer to its source, edge AI reduces latency and enhances efficiency.

DePIN compute networks aren’t only providing new power sources, but also rewarding the power suppliers. At Theta, for example, EdgeCloud node operators earn TFUEL or TNT-20 tokens for completing compute jobs. They can further stake these tokens to help govern and secure the blockchain from EdgeCloud clients. It’s similar to NEAR’s cloud computing for blockchain projects or Flux for dapps. Participants receive tokens to lend their resources to a network.

Decentralized compute networks present a win-win scenario. Node operators can exchange their reward tokens for other assets, and GenAI applications can harness their necessary energy. Through attractive rewards, DePIN also effectively lowers the barriers to web3 entry. And as countless airdrops have shown us, rewards are an easy way to encourage more users to explore and contribute to the ecosystem at large.

Sustainability

Environmentalists will tell you that re-using existing resources is one of the most beneficial climate actions you can take. DePIN protocols apply this idea to computing networks by providing new utility to underutilized hardware. Very few home computers are running at full power 24/7. DePIN repurposes their CPU/GPU and, in turn, reduces the need to manufacture new devices. This approach maximizes available resources while enhancing network efficiency. While the total energy usage might increase due to the higher availability of GPUs, the decentralized model ensures that this energy is used sustainably.

Despite its potential, skepticism from the general public during the DePIN rollout is practically a given. The industry has a lot of work to do before it can prove it’s matured past FTX-level disasters. Environmental concerns around mining are still popular arguments against cryptocurrencies. This means DePIN use cases that protect the climate are incredibly valuable. DePIN providing green solutions for our favorite AI tools is even better. It’s another proof point for DePIN being a solid path toward mainstream adoption.

Democratizing GenAI access

It’s not just an energy question. Access to high-performance GPUs has traditionally been limited to large enterprises. Cloud providers are expensive, and their packages often don't match small business needs. This exclusivity has prevented smaller institutions from leveraging advanced AI tools. It’s a repeat of an all-too-common technology phenomenon – financial barriers ensure those with capital stay in power. GenAI can support breakthroughs from new rare disease treatments to completing crypto transactions. These must not be limited to just a few actors.

Thankfully, DePIN democratizes GPU access by making it affordable and accessible to a broader audience. Universities, startups, and independent researchers can now harness the power of AI without financial concerns. This mission aligns with one of the blockchain community’s main goals of financial inclusion and connecting more people to digital assets.

It also speaks to the power of moving away from centralized providers. Unfortunately, the crypto industry is intimately familiar with the dangerous impact of a single bad actor. Providing more institutions with access to decentralized GPUs prevents an overreliance on a single data center or AI company. If AI penetrates our lives the way experts predict, it’s imperative that no single company has too much say in what this looks like.

The future of DePIN and GenAI

This year’s DePIN summer is also an AI summer. As hundreds of thousands flock to warm destinations with cold drinks, they’ve likely already been aware of AI’s influence. Maybe they had facial recognition at their boarding gate, or perhaps ChatGPT helped them find their dream resort. Behind the scenes, these applications were gathering vast amounts of energy to make our lives easier.

Many don’t realize that DePIN applications will start to pop up just as quickly. We’ll be given more opportunities to monetize our resources, whether that’s CPU, GPU or GPS history. There’s no reason these developments must be at odds with each other. In fact, they should develop in tandem. DePIN can help ensure AI development is energy-efficient and climate-friendly. In the AI age, GPU is the new oil, and we should treat it as such.

Note: The views expressed in this column are those of the author and do not necessarily reflect those of CoinDesk, Inc. or its owners and affiliates.

Thursday's CPI report showed further signs of cooling prices although inflation is far from the Fed's 2% goal.

However, the Fed might be more focused on the labor market, which could become a threat if it slows down significantly more.

Odds for a rate cut in September have increased to nearly 95%.

Markets, including crypto, briefly rose after Thursday’s Consumer Price Index (CPI) report which showed that prices cooled more than expected in June, spurring hope among traders that the Federal Reserve could indeed cut interest rates this year.

Even though Friday’s less-closely watched Producer Price Index (PPI) data came in hotter than expected, traders remained confident that the central bank will cut rates in September. Odds for that are currently just under 95%, according to CME’s Fed Watch tool.

The Fed has a dual mandate – to keep prices stable while also promoting maximum employment. A weakening labor market might thus force the Fed to begin easing monetary policy well before inflation returns to its 2% target (June's CPI data showed inflation rising at a 3% year-over-year pace).

The U.S. unemployment rate has increased for three consecutive months to 4.1% in June from 3.8% in March.

“I do believe the labor market is going to be the bigger risk to the economy going forward,” said John Leer, head of economic intelligence at Morning Consult. “While it shows signs of cooling, it remains very strong by historical standards," he added. "It would be a historical anomaly if the Fed manages to successfully engineer a soft landing, i.e., tame inflation without triggering a recession.”

Fed Chair Jerome Powell acknowledged the slowdown in the labor market at an appearance on Capitol Hill earlier this week, saying that it is no longer “a source of broad inflationary pressures for the economy."

“The Fed will be worried that the negative trend may be a turning point for additional weakness in the labor market down the road,” said Olu Sonola, Fitch Ratings' head of U.S. economic research. “Chair Powell did signal earlier this week that the balance of risk between the unemployment rate and inflation is now two-sided and the labor market is now back in balance. This gives them an incentive to start cutting rates sooner than later, now that inflation seems to be back on that path down to 2%.”

Even if the Fed starts to cut rates, this might not be as bullish of a signal as some traders think, 10x Research’s Markus Thielen said, given that investors in a weakening economy might choose to pull money out of risk assets – crypto included – in order to allocate it to safer investments.

MakerDAO announced on Thursday an open competition to invest $1 billion in tokenized U.S. Treasury offerings.

Top issuers such as BlackRock-Securitize, Ondo Finance and Superstate are planning to apply, they told CoinDesk.

Crypto lending platform MakerDAO, the protocol behind the $5 billion stablecoin DAI, is planning to invest $1 billion of its reserves in tokenized U.S. Treasury products. Top players in the space including BlackRock's BUIDL, Superstate and Ondo Finance are lining up to apply for the proposal.

"We think this is a very good move from MakerDAO and we are excited to participate with Blackrock's BUIDL," Carlos Domingo, CEO of tokenization platform Securitize, BlackRock's issuance partner, said in an email to CoinDesk. "As the leading tokenized treasury issuer, we will certainly apply.”

"Superstate's USTB is an ideal partner for MakerDAO," Rob Leshner, founder of Superstate, told CoinDesk "We're excited that MakerDAO is creating an open process where we can introduce USTB to the community."

Ondo Finance {{ONDO}}, the $550 million RWA platform, also plans to participate. "It's a natural fit in our mission of bringing institutional-grade financial products and services to everyone," Nathan Allman, founder of Ondo Finance, said in a Telegram message. "We look forward to participating."

MakerDAO's plan means a significant reshuffle of its reserve strategy as the protocol, one of the first players in decentralized finance (DeFi), ushers into a next era under founder Rune Christensen's Endgame Plan. The protocol has spearheaded crypto's real-world asset (RWA) trend, backing its decentralized stablecoin in part by U.S. government bonds and bills held off-chain with a range of partners.

Read more: Rune Christensen Explains Why He Wants to Remake Maker and Kill DAI

The open competition to allocate $1 billion to tokenized offerings was announced on Thursday at ETHCC in Brussels, Belgium and also outlined in a governance post. Applications will open on August 12, the post said.

@AesPoker of @SteakhouseFi annoucing the @MakerDAO RWA Grand Prix. 1,000,000,000$ to be invested in tokenized money market funds. Competition opens August 12th. pic.twitter.com/EmwwfOG4cA

— Sébastien Derivaux (@SebVentures) July 11, 2024

The investment will be funded from redirecting $500-$500 million of reserves from vaults managed by Monetalis Clydesdale and Andromeda BlockTower, Sebastien Derivaux, co-founder of Steakhouse Financial, a DeFi consulting firm that was also the author of the tokenized treasury proposal.

Monetalis will offboard MakerDAO after community backlash for failing to present adequate reporting about the reserves in a timely manner.

Big boost for tokenized treasuries

MakerDAO's investment would mean a huge boost for the tokenized real-world asset protocols due to its sheer size.

U.S. Treasuries have been at the forefront of tokenization efforts of digital asset firms and traditional financial institutions alike. These products are attractive for protocol treasuries as a low-risk instrument where they can park their blockchain-based cash and earn a stable yield without leaving the blockchain ecosystem.

The market for these products tripled in a year to $1.85 billion, according to data provider rwa.xyz.

MakerDAO's allocation would mean another 55% growth.

This is not the first similar action, though.

ArbitrumDAO, an ecosystem development organization of Ethereum layer-2 Arbitrum, finalized a similar contest called STEP on Thursday to allocate the equivalent of 35 million of Arbitrum's native tokens {{ARB}} – roughly $27 million worth – in tokenized offerings.