Markets
Cryptocurrency market bets on Solana ETF
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Hello and welcome to the FT Cryptofinance newsletter.
The arrival this week on the American markets of exchange-traded funds that invest in ether has raised the question: which cryptocurrency will be next?
The common consensus is solana, which is based on the blockchain of the same name.
It is being touted as a faster, cheaper rival to Ethereum, and can be used to handle the high volumes of payments that traditional finance regularly handles.
Traditional US fund manager Franklin Templeton, a brand few readily associate with crypto, summed up the excitement by describing Solana as one of the “exciting and major developments that we believe will drive the crypto space forward.”
This is a nice recognition for a token whose market capitalization of $82 billion makes it – stablecoins excluded – the third largest cryptocurrency, although it still represents only 3% of the overall cryptocurrency market value.
Solana made a comeback two years ago, when it was better known for its frequent outages and was championed by Sam Bankman-Fried (who?). It’s now attracting the attention of two different audiences.
It’s the perfect place to launch meme tokens based on dogs, animals, or parodies of political figures, because it can handle the vast trading volumes that these coins attract. In recent weeks, some of its most traded tokens have been those that track the fortunes of Kamala Harris and Joe Biden.
On the other hand, it is also used to tokenize real assets such as US Treasuries. This week, Hamilton Lane, an investment manager with over $920 billion in assets, launched a private credit fund on the Solana blockchain.
The Securities and Exchange Commission (SEC) must now make a decision on a Solana ETF by next March. VanEck and 21Shares filed applications with the SEC in early July.
The growing confidence in the move comes from the SEC’s unexpected approval of ether ETFs in May. The industry had interpreted the agency’s lack of commitment as a clear signal that the slew of applications would be rejected en masse, since ether could be used to generate yield, operating much like a security.
But the SEC got around the problem by prohibiting ETF issuers from generating a yield; once that problem was resolved and the regulator approved them, a switch was flipped.
This change of heart doesn’t make a Solana ETF a formality, however. For many years, the SEC has rejected Bitcoin Spot ETFs due to concerns about manipulation of the underlying market.
Bitcoin, and later Ether, futures markets on the CME, a federally regulated exchange, have gone a long way toward allaying this concern. However, there is no CME futures market for Solana.
“This cannot be approved [by March] “Unless there is a market that is acceptable and studyable for the SEC, which is not the case at the moment,” said Katalin Tischhauser, head of research at Sygnum Bank.
Even more troubling, the SEC filed lawsuits last year against Binance US, Kraken, and Coinbase, alleging that Solana is an unregistered security.
However, the fact that these obstacles are not seen as insurmountable obstacles but as obstacles to be overcome is indicative of the morale of the cryptocurrency market.
The initial hope is that a Donald Trump victory in November’s US presidential election will lead to a change of tone at the SEC. Last month, the regulator closed an investigation into possible sales of ether in securities transactions, raising hopes that it could also reverse its stance on Solana.
Matthew Sigel, head of digital asset research at VanEck, confirmed on X that his firm’s filing was a bet on a Trump victory. Cryptocurrency legislation in Washington could also address the issue. But with a March deadline set, “a lot of things have to change and they have to change pretty quickly,” Tischhauser said.
But even if March is too early, the question of a Solana ETF represents an inflection point for both the industry and the regulator.
Bitcoin, it can be said, is digital gold and is worth holding for diversification purposes and as a speculative asset. Ether remains the main player in the development of the cryptocurrency market as an alternative to the existing plumbing and infrastructure of the financial system. ETFs on both were simpler cases.
As the third-largest cryptocurrency, Solana’s name is much less well-known outside the industry. Then there’s a very long list of increasingly speculative projects, with lower liquidity and less maturity. This makes them less attractive as a basis for other crypto ETFs and adds to regulators’ unease about the integrity of the underlying market.
Like ether, solana can also be used to generate yield, so in theory, the regulator should be comfortable with the concept. The success of the application will likely depend on market demand.
“There is as much enthusiasm for [solana] “I want something different for my portfolio and a core technology,” said Adam Levine, head of corporate strategy at Fireblocks.
But there were two days of net outflows in spot Ethereum ETFs in the first three trading days, suggesting that institutional interest is more muted.
What has given the spot Bitcoin ETF applications an unstoppable boost are applications from traditional names like BlackRock and Fidelity. These names were later to the market than others in filing for crypto-related ETFs. They have not filed for a Solana ETF and until they do, it is unlikely that one will appear.
What do you think? Send me an email at philip.stafford@ft.com
Highlights of the week
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Coinbase Cryptocurrency Exchange was fined £3.5m fine by the UK regulator for providing payment services to more than 13,000 “high-risk” customers.
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Exchange-traded funds that invest directly in ether arrived in the United States this week and raised about $108 million. first day trading. BlackRock, Bitwise Investments and Fidelity emerged as the early leaders. Since then, there have been a few days of global outflows as the price of ether has fallen sharply. It is still early days.
Sound clip of the week
It’s the big Bitcoin conference happening in Nashville this weekend, with Donald Trump keynoting. Organizers were in talks to get Kamala Harris to attend, but she decided not to attend. She’s probably trying to juggle a lot of things. Whatever the reason, some took it as a huge snub, including Tyler Winklevoss of the Gemini exchange. In writing on X:
“The Biden-Harris administration has been waging an all-out war on the crypto industry for 4 years… What is it doing? It is refusing. It can’t even take the first step and show up to start repairing the damage. Our industry will not forget this. We will show no mercy in November.”
And finally . . .
Tonight is the opening ceremony of the Olympic Games. The French will have to do their utmost to surpass James Bond and the late Queen Elizabeth II. parachuting in the stadium. Good luck, my friends.
Cryptofinance was edited by Tommy Stubbington. To view previous editions of the newsletter, click on here
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Over the past 24 hours, Jupiter and JasmyCoin emerged as the top gainers among the top 100 crypto assets, while Bittensor and Mantra plunged as the top losers.
Top Winners
Jupiter
Jupiter (JUP) led the charge among the biggest gainers on July 27.
At the time of writing, the crypto asset had surged 12.6% in the past 24 hours and was trading at $1.16. JUP’s daily trading volume was hovering around $282 million, according to data from crypto.news.
JUP Hourly Price Chart, July 26-27 | Source: crypto.news
Additionally, the cryptocurrency’s market cap stood at $1.56 billion, making it the 62nd largest crypto asset, according to CoinGecko. Despite the recent price surge, the token is still down 42.6% from its all-time high of $2 reached on Jan. 31.
Jupiter functions as a decentralized exchange aggregator that allows users to trade Solana-based tokens. The platform also offers users the best routes for direct trades between multiple exchanges and liquidity pools.
In addition to being a DEX aggregator, Jupiter has expanded into a “full stack ecosystem” by launching several new projects, including a dedicated pool to support perpetual trading and plans for a stablecoin.
JasmyCoin
JasmyCoin (JASMI) has increased by 12% in the last 24 hours and is trading at $0.0328 at press time. JASMY’s daily trading volume has increased by 10% in the last 24 hours, reaching $146 million.
JASMY Hourly Price Chart, July 26-27 | Source: crypto.news
The asset’s market cap has surpassed the $1.5 billion mark, making it the 60th largest cryptocurrency at the time of reporting. However, the self-proclaimed “Bitcoin of Japan” is still down 99.3% from its all-time high of $4.79 on February 16, 2021.
JASMY is the native token of Jasmy Corporation, a Japanese Internet of Things provider. The platform seeks to merge the decentralization of blockchain technology with IoT, allowing users to convert their digital information into digital assets.
The initiative was launched by Kunitake Ando, former COO of Sony Corporation, along with Kazumasa Sato, former CEO of Sony Style.com Japan Inc., Hiroshi Harada, executive financial analyst at KPMG, and other senior executives from Japan.
Kaspa
Kaspa (KAS) saw a 100% increase in trading volume and an 8% increase in price over the past 24 hours, trading at $0.19 at the time of publication.
KAS Hourly Price Chart, July 26-27 | Source: crypto.news
According to data from CoinGecko, Kaspa now ranks 27th in the global cryptocurrency list, with a circulating supply of approximately 24.29 billion KAS tokens and a market capitalization of $4.59 billion.
Kaspa is a cryptocurrency designed to deliver a high-performance, scalable, and secure blockchain platform. Its unique Layer-1 protocol includes the GhostDAG protocol, a proof-of-work (PoW) consensus mechanism that enables faster block times and higher transaction throughput compared to standard blockchains.
Unlike Bitcoin, GhostDAG allows multiple blocks to be created simultaneously, speeding up transactions and increasing block rewards for miners.
Bonk
Bonk (BONK) is the only one coin meme which made it to this list of biggest gainers and jumped 8.6% in the last 24 hours. Trading at $0.000030, the Solana-based meme coin’s market cap has surpassed $2.1 billion, surpassing Floki (FLOKI), another competing dog-themed coin with a market cap of $1.78 billion.
BONK Hourly Price Chart, July 26-27 | Source: crypto.news
BONK’s daily trading volume hovered around $285 million. However, BONK is still down 33.5% from its all-time high of $0.000045, reached on March 4.
Bonk, a meme coin that rose to prominence in 2023, has contributed significantly to Solana’s value increase amid the meme coin frenzy.
Bonk started out as a simple dog-themed coin. It has since expanded its features to include integration with decentralized finance. The project also partners with cross-chain communication protocols, NFT marketplaces, and various other cryptocurrency ecosystems.
BONK trading pairs are now listed on major exchanges including Binance, Coinbase, OKX, and Bitstamp.
The big losers
Bittensor
Bittensor (TAO) was the biggest loser among the 100 largest crypto assets, according to data from CoinGecko.
At the time of writing, TAO, the native token of decentralized AI project Bittensor, was down 5%, trading around $344. The crypto asset had a daily trading volume of $59 million and a market cap of $2.43 billion.
TAO 24 Hour Price Chart | Source: CoinGecko
Bittensor, created in 2019 by AI researchers Ala Shaabana and Jacob Steeves, initially operated as a parachain on Polkadot before transitioning to its own layer-1 blockchain in March 2023.
Mantra
Mantra (OM) fell 6%, trading at $1.13 at press time. The digital currency’s market cap fell to $938 million. Additionally, the 82nd largest crypto asset has a daily trading volume of $26 million.
OM Price Hourly Chart, July 26-27 | Source: crypto.news
Mantra is a modular blockchain network comprising two chains, Manta Pacific and Manta Atlantic, specialized in zero-knowledge applications.
Coat
Coat (MNT) also saw a 2.4% drop in price, now trading at $0.8413. Currently, Mantle has a market cap of around $2.75 billion, which ranks 36th in the global cryptocurrency rankings by market cap, according to price data from crypto.news.
MNT Hourly Price Chart, July 26-27 | Source: crypto.news
Over the past 24 hours, MNT trading volume also fell by 6%, reaching $240 million.
Mantle, formerly known as BitDAO, is an investment DAO closely associated with Bybit. The MNT token is essential for governance, paying gas fees on the Mantle network, and staking on various platforms.
Built on the Ethereum network, Mantle provides a platform for decentralized application developers to launch their projects. It has become particularly popular for GameFi applications, leading to the formation of an internal Web3 gaming team.
Markets
Bitcoin Price Drops to $67,000 Despite Trump’s Pro-Crypto Comments, Further Correction Ahead?
Pioneer cryptocurrency Bitcoin has registered a 1.13% decline in the past 24 hours to trade at $67,400. Despite a strong pro-crypto stance from US presidential candidate Donald Trump at the Bitcoin 2024 conference, this massive selloff has raised concerns in the market about the asset’s sustainability at a higher price. However, given the recent three-week rally, a slight pullback this weekend is justifiable and necessary to regain the depleted bullish momentum.
Bitcoin Price Flag Formation Hints at Opportunity to Break Beyond $80,000
The medium-term trend Bitcoin Price remains a sideways trend amidst the formation of a bullish flag pattern. This chart pattern is defined by two descending lines that are currently shaping the price trajectory by providing dynamic resistance and support.
On July 5, BTC saw a bullish reversal from the flag pattern at $53,485, increasing its asset by 29.75% to a high of $69,400. This recent spike followed the market’s positive sentiment towards the Donald Trump speech at the Bitcoin 2024 conference in Nashville on Saturday afternoon.
Bitcoin Price | Tradingview
In his speech, Trump outlined several pro-crypto initiatives: he promised to replace SEC Chairman Gary Gensler on his first day in office, to establish a Strategic National Reserve of Bitcoin if elected, to ensure that the U.S. government holds all of its assets. Bitcoin assets and block any attempt to create a central bank digital currency (CBDC) during his presidency.
He also claimed that under his leadership, Bitcoin and cryptocurrencies will skyrocket like never before.
Despite Donald Trump’s optimistic promises, the BTC price failed to reach $70,000 and is currently trading at $67,400. As a result, Bitcoin’s market cap has dipped slightly to hover at $1.335 trillion.
However, this pullback is justified, as Bitcoin price has recently seen significant growth over the past three weeks, which has significantly improved market sentiment. Thus, price action over the weekend could replenish the depleted bullish momentum, potentially strengthening an attempt to break out from the flag pattern at $70,130.
A successful breakout will signal the continuation of the uptrend and extend the Bitcoin price forecast target at $78,000, followed by $84,000.
On the other hand, if the supply pressure on the upper trendline persists, the asset price could trigger further corrections for a few weeks or months.
Technical indicator:
- Pivot levels: The traditional pivot indicator suggests that the price pullback could see immediate support at $64,400, followed by a correction floor at $56,700.
- Moving average convergence-divergence: A bullish crossover state between the MACD (blue) and the signal (orange) ensure that the recovery dynamics are intact.
Related Articles
Frequently Asked Questions
A CBDC is a digital form of fiat currency issued and regulated by a country’s central bank. It aims to provide a digital alternative to traditional banknotes.
The proposal for a strategic national Bitcoin reserve is a major confirmation of Bitcoin’s legitimacy and potential as a reserve asset. Such a move could position Bitcoin in a similar way to gold, potentially stabilizing its price and encouraging other countries to adopt similar strategies.
Conferences like Bitcoin 2024 serve as essential platforms for networking, knowledge sharing, and showcasing new technologies within the cryptocurrency industry.
Markets
Swiss crypto bank Sygnum reports profitability after surge in first-half trading volumes – DL News
- Sygnum says it has reached profitability after increasing transaction volumes.
- The Swiss crypto bank does not disclose specific profit figures.
Sygnum, a Swiss global crypto banking group with approximately $4.5 billion in client assets, announced that it has achieved profitability after a strong first half, with key metrics showing year-to-date growth.
The company said in a Press release Compared to the same period last year, cryptocurrency spot trading volumes doubled, cryptocurrency derivatives trading increased by 500%, and lending volumes increased by 360%. The exact figures for the first half of the year were not disclosed.
Sygnum said its staking service has also grown, with the percentage of Ethereum staked by customers increasing to 42%. For institutional clients, staking Ethereum has a benefit that goes beyond the limitations of the ETF framework, which excludes staking returns, Sygnum noted.
“The approval and launch of Bitcoin and Ethereum ETFs was a turning point for the crypto industry this year, leading to a major increase in demand for trusted, regulated exposure to digital assets,” said Martin Burgherr, Chief Client Officer of Sygnum.
He added: “This is also reflected in Sygnum’s own growth, with our core business segments recording significant year-to-date growth in the first half of the year.”
Sygnum, which has also been licensed in Luxembourg since 2022, plans to expand into European and Asian markets, the statement said.
Markets
Former White House official Anthony Scaramucci says cryptocurrency bull market could be sparked by regulatory clarity
Anthony Scaramucci, founder of Skybridge Capital, says the next cryptocurrency bull market could be sparked by a new wave of clear cryptocurrency regulations.
In a new interview On CNBC’s Squawk Box, the former White House communications director said he and two other prominent industry figures traveled to Washington, D.C. to speak to officials about the dangers of Sen. Elizabeth Warren and U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler’s hardline approach to cryptocurrency regulation.
“Mark Cuban, myself, and Michael Novogratz were in Washington a few weeks ago to speak with White House officials and explain the dangers of Gary Gensler and Elizabeth Warren’s anti-crypto approach. I hope that message gets through…
“Overall, if we can get regulatory policy around Bitcoin and crypto assets in sync, we will have a bull market next year for these assets.”
Scaramucci then compares crypto assets to ride-hailing company Uber, saying regulators were initially wary of the service but eventually decided to adopt clear guidelines due to public demand.
“Remember Uber: Nobody wanted Uber. A lot of regulators didn’t want it. Mayors and deputy mayors didn’t want it, but citizens wanted Uber and eventually accepted the idea of regulating it fairly. I think we’re there now.”
The CEO also says young Democratic voters believe their leaders are making the wrong choices when it comes to digital assets.
“I think President Trump’s move toward Bitcoin and crypto assets has shaken Democrats to their core, and I think very smart, younger Democrats are recognizing that they are completely off base with their positions, completely off base with these SEC lawsuits and regulation by law enforcement, and now they need to get back to the center.”
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