Fiat DAO

Ben Strack

Casey Wagner

Today, enjoy the Forward Guidance newsletter on Blockworks.co. Tomorrow, get the news delivered directly to your inbox. <a href="https://blockworks.co/newsletter/forwardguidance">Subscribe to the Forward Guidance newsletter</a>.



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



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



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



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



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



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



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



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



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



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



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



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



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



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



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



— Ben Strack



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



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



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



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



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



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



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



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



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



— Casey Wagner



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



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



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



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



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



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



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

Katherine Ross

The FTX estate appeared in front of a court Monday for a hearing centered on its bankruptcy&nbsp;



plan, which was proposed back in May of this year.&nbsp;



After a hearing that spanned most of Monday, bankruptcy court Judge John Dorsey signed off on the plan, allowing FTX to move one step closer to fully winding down.&nbsp;



The judge praised the plan, calling it a “model case” for a “complicated” bankruptcy.&nbsp;



<a href="https://blockworks.co/tag/ftx">FTX</a>’s plan, which received “overwhelming” support from creditors, was presented to the Delaware Bankruptcy Court for confirmation. However, there’s been plenty of controversy around the plan, which would — upon winding down — distribute funds to creditors based on the asset prices of crypto back in November 2022.&nbsp;



Read more: <a href="https://blockworks.co/news/ftx-comparison-crypto-bankruptcies">Why FTX is different from other crypto bankruptcies</a>



Former FTX customers had previously fought for distributions <a href="https://blockworks.co/news/blockfi-ftx-bankruptcy-comparison">to be made in-kind</a>, meaning that customers would receive crypto instead of payments in cash.



However, during a cross-examination during Monday’s hearing, Alvarez &amp; Marsal’s Steven Coverick told the court that the debtors didn’t have the crypto in order to make in-kind distributions. Coverick and his firm worked with the debtors on the plan.&nbsp;



FTX, he added, “never had the crypto.”



The estate, per the May filing, owes creditors roughly $11 billion, and has managed to find somewhere between $14.5 billion and $16.3 billion in cash.&nbsp;



The hearing Monday confirmed that the estate researched ways to return crypto back to former customers, but it would have been expensive and would have lowered the amount returned, Coverick added.&nbsp;



Due to the way in which the estate would have to go about purchasing the crypto, the purchases would potentially “result in a run-up in the market,” he told attorney David Adler.



The plan, however, doesn’t rule out distributions made in stablecoins.



Per a May court filing, 98% of non-government creditors will <a href="https://blockworks.co/news/empire-newsletter-ftx-bankruptcy-finish-line">receive “at least” 118% of claims</a> in cash within two months of the plan being approved.&nbsp;



The hearing marks another milestone in the saga of FTX, which is coming up on the <a href="https://blockworks.co/news/ftx-meltdown-timeline">two-year anniversary of its collapse</a>. Since the November 2022 crash, former CEO Sam Bankman-Fried has both been tried in court and found guilty. He is serving a <a href="https://blockworks.co/news/sam-bankman-fried-sentenced">sentence of 25 years</a>. Former Alameda CEO Caroline Ellison has also been sentenced, she faces <a href="https://blockworks.co/news/caroline-ellison-sentenced-to-24-months">two years in jail</a>. FTX executive Ryan Salame faces a sentence of <a href="https://blockworks.co/news/former-ftx-exec-ryan-salame-sentenced">seven and a half years</a> in jail.



Nishad Singh and Gary Wang, both executives who testified at Bankman-Fried’s trial last year, are set to be sentenced next month.



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Judge approves FTX bankruptcy plan

Jack Kubinec

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Never ask a man his salary, a woman her age, or a crypto VC about their 2022 Solana investments.



A pair of research notes published a year apart by the crypto venture shop Lattice gives insight into how the year SOL cratered to $9 specifically affected Solana-based startups. Lattice published a 2021 seed round retrospective in 2023, and a 2022 retrospective recently in 2024.&nbsp;



26%, or more than a quarter, of 2022 Solana seed startups have already failed, and only 61% have managed to ship a product, <a href="https://www.lattice.fund/writing-and-press/2022-seed-stage-retrospective">according</a> to Lattice. Among crypto ecosystems, only Binance saw a lower percentage of projects shipping products. Binance, Avalanche and NEAR 2022 startups all topped Solana’s fail rate, too.&nbsp;



Still, it was a marked step down from 2021’s cohort of Solana startups. In Lattice’s retrospective on that year, <a href="https://www.lattice.fund/writing-and-press/2021-seed-stage-retrospective">published</a> in 2023, it found that 75% of 2021 Solana startups had already shipped a product, and only 11% had failed. Both figures are markedly better compared to 2022.



Meta, the pseudonymous co-founder of Solana-focused Lucid Ventures, said they don’t think Solana is “abnormal” in the VC world, where it’s “standard” for many projects to fail.&nbsp;



In Solana’s early days, a lot of projects garnered visibility from hackathons organized by the network — the sizable <a href="https://blockworks.co/news/lightspeed-newsletter-stake-auction-marketplace">liquid staking protocol</a> Marinade was started as a Solana hackathon <a href="https://x.com/MarinadeFinance/status/1799129421607256142">project</a>, for instance. This can gin up developer excitement, and other alternative blockchains are trying to recapture some of the same magic, it seems: Monad just <a href="https://x.com/monad_xyz/status/1842310910553326018">held</a> a pitch competition for the yet-unlaunched chain. But early, hackathon-era projects may not have a very high success rate.



SOL Big Brain, another pseudonymous VC, <a href="https://x.com/SOLBigBrain/status/1820861386991251726">posted</a> a list of projects they had been told to keep an eye on in 2021. Very few still garner any name recognition.



“Lessons in there for investors investing in new ecosystems,” they wrote.&nbsp;



Of the Solana startups that did survive 2022, however, some are now in the process of raising follow-on funding, and these bigger rounds are starting to touch down. Notably, Drift and Helius both announced rounds in excess of $20 million last month. By my count, this represented the largest Solana rounds in this market cycle for startups that aren’t aiming to build their own blockchains.



These rounds contributed to the $173 million in venture funding the Solana ecosystem hauled in in Q3 of this year, its highest quarterly total since Q2 of 2022, <a href="https://cdn.builder.io/o/assets%2Fce0c7323a97a4d91bd0baa7490ec9139%2Fe090cfa13cfc4e4e95a330c82b9d03a6?alt=media&amp;token=3b6792e5-fe9b-4551-88b0-91e4cf3fbc4b&amp;apiKey=ce0c7323a97a4d91bd0baa7490ec9139">according</a> to the Solana Foundation.



But while Solana may be once again putting up 2022 venture numbers, it will hope to avoid 2022 venture outcomes.



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



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1 in 4 Solana VC startups from 2022 have already failed 

Donovan Choy

Today, enjoy the 0xResearch newsletter on Blockworks.co. Tomorrow, get the news delivered directly to your inbox. <a href="https://blockworks.co/newsletter/research">Subscribe to the 0xResearch newsletter</a>. 



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<h2 class="wp-block-heading">A new EIP to make Ethereum faster</h2>



Everyone wants the Ethereum network to be faster. This can be achieved in one of three ways:



<ol class="wp-block-list">
<li>Reduce slot times (i.e. the time intervals between newly proposed blocks).</li>



<li>Make blocks bigger by increasing gas limits.</li>



<li>Improve blob (Binary Large OBject) transactions capacity, a temporary form of data structure introduced in EIP-4844 that allowed L2s to settle to Ethereum more cheaply.</li>
</ol>



This weekend saw the emergence of the newly proposed <a href="https://github.com/ethereum/EIPs/pull/8931">EIP-7781</a> aimed at the first.



Proposed by <a href="https://x.com/ben_a_adams">Ben Adams</a>, co-founder of Illyriad Games and Nethermind contributor, EIP-7781 wants to shorten slot times on the Ethereum L1 from from 12 seconds to eight seconds.



The proposal cites EIP-7781’s impact as an improvement in overall throughput by 33% and reduced latency for based L2 rollups, which roughly translates to a hypothetical gas limit increase from 30 million to 40 million or a blob count increase from six to eight.



Since block sizes remain unchanged, aggregate peak bandwidth demands will not rise either.



In other words, Ethereum would be faster, without increasing the bandwidth requirements on individual nodes (though the impact on hardware is up for debate).



The new proposal has received the approval of Ethereum Foundation researcher <a href="https://github.com/ethereum/EIPs/pull/8931#issuecomment-2395026393">Justin Drake</a>, who agrees EIP-7781 would roughly increase throughput by 50%, make DEXs like Uniswap roughly 1.22x more efficient and reduce confirmation times of L1 contracts by one-third.&nbsp;



If passed, EIP-7781 would have significant positive impacts on based rollups like Taiko, whose architecture leverages the sequencer of the L1 (and thereby is constrained by L1 block times), as opposed to traditional rollups like Optimism and Arbitrum, who run their own centralized sequencers.



It’s a welcome change but one wonders if it’s just another EIP on an Ethereum roadmap already chock-full of EIPs waiting to be implemented.&nbsp;



Recall that the upcoming <a href="https://blockworks.co/news/testing-bottleneck-next-ethereum-upgrade">Pectra hard fork</a> (with already 20+ EIPs) that was scheduled in early 2025 was <a href="https://blockworks.co/newsletter/research/issue/post_a2d3d0b2-7573-4379-a2d8-db9d7c7dc488">split</a> in two during the last Ethereum All Core Developers (ACD) call.&nbsp;



ETH Core Dev Alex Stokes, who moderated the last ACD, <a href="https://hackmd.io/@ralexstokes/rJVuKtlpR">cited</a> Pectra as “one of the biggest hard forks we have had in Ethereum history.”



<h2 class="wp-block-heading">Chart of the Day</h2>



Polymarket hits all-time highs in daily trading volumes:&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdyTH-VvCX_CqNObVhkC9sV1_qTVGXpQi6x4ChVNpdXKjicjoF8Oi1qSfQByqGw7CM-1_cMMHX6RZfi_toKMWcqMUXAGeVV1JILvqZ7G5vrUF3wIXyCLpYoP26sqf619fh8_EAFnGUlI61LNIk1OB050Z0?key=26-qyIB22NbzOhdKnKWiqQ" alt=""/><figcaption class="wp-element-caption">Source: <a href="https://app.blockworksresearch.com/analytics/polymarket">Blockworks Research</a> (h/t <a href="https://x.com/smyyguy/status/1843278051142242528">Dan Smith</a>)</figcaption></figure>



Polymarket is racking up all-time highs in daily trading volumes. On Sunday, 82% ($79.3 million) of volumes came from the “elections” category. The biggest market by far is still the “<a href="https://polymarket.com/event/presidential-election-winner-2024?tid=1728309704050">Presidential Election Winner 2024</a>” prediction market, with about $1.38 billion worth of bets riding on it. It’s right now giving Trump a 51% lead compared to Harris’s 47.9%.



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



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New EIP-7781 to make Ethereum faster by 33%

David Canellis

Bitcoin has now been in a bull market for 686 days, ever since it bottomed out below $15,500 in November 2022 amid <a href="https://blockworks.co/tag/ftx">the FTX fiasco</a>.



The past three bull markets lasted between 1,047 and 1,278 days. That’s counting from when the price of bitcoin hits its local floor, past its cycle peak and finishes alongside its ultimate correction.



So, bitcoin is now firmly in the second half of its current bull market — if the cycles since 2011 are anything to go by.



We already know that bitcoin returns have diminished every cycle. As to be expected: Bitcoin went from a market cap of a few million to over $12 billion in its first major bull cycle starting in 2011, or up to 620x returns.



Read more: <a href="https://blockworks.co/news/bitcoin-halving-cycle-returns">Bitcoin halvings may be bullish — but returns have shrunk every cycle</a>



Then, it went from a few billion in 2015 to almost $300 billion in 2018 (103x returns) and then to $1.2 trillion by the 2021 peak (21x), which is more or less the market valuation it has today.



If bitcoin this time around were to undergo the same degree of growth as it did between 2018 and 2022, then it would need to rally from a $300 billion market cap to a $6.3 trillion one — which would make it almost twice as valuable as Apple stock.&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXeV26Q0CuGMlXXXDFHeYi8BvbjyMEsXCZm5gT4Os3Ddil-CZhdKwfRfv1AnaNViwRMZwmiSgjFC_3mfdG5Ef6BI6FHk_VArgFNYO3bAUJZtex7dQvtFx6uHDlLux33dHP-cNpkPbR4mzM__6ZhTg7Q4p_HB?key=eKh0n_CrFzmeX-nhdbM8CQ" alt=""/><figcaption class="wp-element-caption">Loyal <a href="https://blockworks.co/category/empire-newsletter">Empire newsletter</a> readers would recognize this chart. It plots bull markets against each other, as if they all started at once, to gauge just how high bitcoin goes, and for how long.</figcaption></figure>



If bitcoin were truly bigger than Apple right now, the price of BTC would be $1.32 million (current price: $63,000). For scale, Fundstrat managing partner and perennial bull-poster Tom Lee has previously <a href="https://www.dlnews.com/articles/markets/fundstrat-tom-lee-on-why-bitcoin-to-hit-500k-usd-in-5-years/">said</a> that BTC could hit $150,000 by the end of the year, and $500,000 in the next five years.



With this in mind, bitcoin has done remarkably well this cycle.&nbsp;



Notice that the purple line above — the current bull market — started off more or less in line with the three previous cycles, thanks to a monster opening in 2023.&nbsp;



But a brief reversal to below $20,000 saw bitcoin start to lag behind at around day 100, before catching up quickly after day 300. Hype around a potential BlackRock bitcoin ETF hype <a href="https://blockworks.co/news/crypto-media-slow-thoughtful-facts">really percolated</a> around then.



After that point, bitcoin was outpacing the 2018 to 2022 market cycle. It even briefly eclipsed the returns seen in the ripper price action between 2015 and 2018, culminating in a March all-time high which <a href="https://blockworks.co/news/history-of-bitcoin-halvings">atypically occurred before</a> the Bitcoin halving.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdmtuAuNnoK7V2K9lB5y7vvyniSLTNWzJCgfCCzMlIKR8-_fXPHEXnPHq9tqWAZT8_NZE64rwQBDFc2sTPWdDvBnctJBna6vr7bZAcAzBvn9A54y7PuLXjO3T7xOQ8FxCgs6KMen3232EgrFRbZLfKIjAAQ?key=eKh0n_CrFzmeX-nhdbM8CQ" alt=""/><figcaption class="wp-element-caption">Here’s a similar chart but for the cap growth for the rest of the crypto market. The current altcoin cycle is well below the previous two.</figcaption></figure>



But bitcoin has been trending sideways for long enough now that it is no longer outpacing any of the previous bull markets.&nbsp;



And it was about this time that each run really accelerated: Bitcoin has reached its cycle top somewhere between day 750 and day 1,060 into each bull market, and prices usually spent hundreds of days ramping up to reach those peaks.



It could be that bitcoin made most of its gains in the first 500 days of this bull market. That would certainly align with the trend of diminishing returns.



Or, bitcoin is simply late to the real bull run, due to crescendo over the next eight months or so — a period that would interestingly end about five months into the next US president’s first term, in June 2025.



Read more: <a href="https://blockworks.co/news/btc-uptober-market-odds">As BTC rallies after jobs report, what are the ‘Uptober’ odds?</a>



If there was a case to be made for the election outcome being pivotal for the state of crypto markets, this might just do it.&nbsp;



Still, at least going by how the previous bitcoin bull markets have played out, it could be that whatever immediate impact the election has marks the beginning of the end of the cycle.



A modified version of this article first appeared in the daily Empire newsletter. Subscribe <a href="https://blockworks.co/newsletter/empire">here</a> so you don’t miss tomorrow’s edition.



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



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



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Why the US election could put a timer on this bitcoin bull market

Today, enjoy the Empire newsletter on Blockworks.co. Tomorrow, get the news delivered directly to your inbox.&nbsp;<a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



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Good morning.&nbsp;



This week’s editions are going to look a smidge different, with so many of our folks on the ground at Permissionless in Salt Lake City.&nbsp;



For those with FOMO, we’ll keep you updated on what’s happening at the event, while also keeping an eye on crypto.&nbsp;



And if you haven’t secured your tickets yet, <a href="https://blockworks.co/event/permissionless-iii">grab them here</a>.&nbsp;



Hopefully, I’ll see you there. If not, we’ll catch you around your inbox.&nbsp;



— Katherine Ross&nbsp;&nbsp;



<h2 class="wp-block-heading">Unforgive-a-bull</h2>



The bitcoin bull run is officially late —&nbsp;or maybe it was really early.



Bitcoin has now been in a bull market for 686 days, ever since it bottomed out below $15,500 in November 2022 amid <a href="https://blockworks.co/tag/ftx">the FTX fiasco</a>.



The past three bull markets lasted between 1,047 and 1,278 days. That’s if you start counting when the price of bitcoin hits its local floor, past its cycle peak and finishing alongside its ultimate correction.



Going by those figures, we can probably say that bitcoin is now firmly in the second half of its current bull market — if the cycles since 2011 are anything to go by.



We already know that bitcoin returns have <a href="https://blockworks.co/news/bitcoin-halving-cycle-returns">diminished every cycle</a>. As to be expected: bitcoin went from a market cap of a few million to over $12 billion in its first major bull cycle starting in 2011, or up to 620x returns.



Then, it went from a few billion in 2015 to almost $300 billion in 2018 (103x returns) and then to $1.2 trillion by the 2021 peak (21x), which is more or less the market valuation it has today.



If bitcoin this time around were to undergo the same degree of growth as between 2018 and 2022, then it would need to rally from a $300-billion market cap to $6.3 trillion — which would make it almost twice as valuable as Apple stock.&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXczAqSZWwekV1IolkLGj8JLdi-_DMhTxTCZzOhM4eqoBu3ZJBzMZAqEJ1U-fhogMZBBpSFCJ95PRae4ULBEDk3NL58ByXS7qxzw2o2aVVNTiOxQ7zCG5Om7t9sgejdulzCWRuseyBjd6ywzXBFnWFaVe92g?key=pHyXYR-eEVKNE47snoO54w" alt=""/><figcaption class="wp-element-caption">Returning Empire readers would recognize this chart. It plots bull markets against each other, as if they all started at once, to gauge just how high bitcoin goes, and for how long.</figcaption></figure>



If bitcoin were truly bigger than Apple right now, the price of BTC would be $1.32 million (current price: $63,000). For scale, Fundstrat managing partner and perennial bull-poster Tom Lee has <a href="https://www.dlnews.com/articles/markets/fundstrat-tom-lee-on-why-bitcoin-to-hit-500k-usd-in-5-years/">previously said</a> that BTC could hit $150,000 by the end of the year, and $500,000 in the next five years.



With this in mind, bitcoin has done remarkably well this cycle.&nbsp;



Notice that the purple line above — the current bull market — started off more-or-less in line with the three previous cycles, thanks to a monster opening in 2023.&nbsp;



But a brief reversal to below $20,000 saw bitcoin start to lag behind at about day 100, before catching up quickly after day 300. Hype for a potential BlackRock bitcoin ETF hype <a href="https://blockworks.co/news/crypto-media-slow-thoughtful-facts">really percolated</a> around then.



After that point, bitcoin was outpacing the 2018 to 2022 market cycle. It even briefly eclipsed the returns seen in the ripper market action between 2015 and 2018, culminating in a March all-time high which <a href="https://blockworks.co/news/history-of-bitcoin-halvings">atypically occurred before</a> the bitcoin halving.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXf-bLCWoju0H5XWkeDkhf3uF1sSYp8H9bIkCuVJ0l597ShDOqLZB5gnsSeysB81QNY8LELYdETVZyaycVuphIBgsLaGb8lr9VWaLnxXzXp2_v-ctuyVo8fcyv05Ed-6qg73aZbKpgoOVCndlInnlwlqlTOQ?key=pHyXYR-eEVKNE47snoO54w" alt=""/><figcaption class="wp-element-caption">Here’s a similar chart but for the cap growth for the rest of the crypto market. The current altcoin cycle is well below the previous two.</figcaption></figure>



But bitcoin has now trended sideways long enough that it’s no longer outpacing any of the previous bull markets.&nbsp;



And it was about this time that each run really accelerated: bitcoin has reached its cycle top somewhere between day 750 and day 1,060 into each bull market, and prices usually spent hundreds of days ramping up to reach those peaks.



It could be that bitcoin made most of its gains in the first 500 days of this bull market. That would certainly align with the trend of diminishing returns.



Or, bitcoin is simply late to the real bull run, due to crescendo over the next eight months or so.&nbsp;



If you needed a little extra hopium in your morning Monday coffee, that might do the trick.



— David Canellis



<h2 class="wp-block-heading">The Works</h2>



<ul class="wp-block-list">
<li>Did a new <a href="https://www.politico.eu/article/mystery-creator-bitcoin-identified-new-hbo-documentary-satoshi-nakamoto-crypto-currency/">HBO documentary</a> find the real Satoshi Nakamoto? The doc, which is set for a Tuesday premiere, may claim that Len Sassaman is the real Satoshi. Or, at least, that’s the <a href="https://www.coindesk.com/markets/2024/10/07/len-sassaman-gets-the-memecoin-treatment-ahead-of-hbo-bitcoin-creator-documentary/?utm_medium=referral&amp;utm_source=rss&amp;utm_campaign=headlines">outcome</a> that Polymarket bettors and memecoin makers are hoping for.</li>



<li>The inflow streak for crypto ETF products is over, thanks to the $147 million in outflows last week, CoinShares <a href="https://coinshares.com/us/resources/market-activity/fund-flows-07-10-24/">noted</a>.</li>



<li>EigenLayer “erroneously transferred” 1.6 million EIGEN ($5.7 million) to a “malicious attacker” after an investor’s transfer was <a href="https://x.com/eigenlayer/status/1842317191045157099">compromised</a>.&nbsp;</li>



<li>Leah Wald’s Sol Strategies (formerly Cypherpunk Holdings) is likely to reinvest a windfall from the bankrupt FTX estate back into SOL, she told <a href="https://coinshares.com/us/resources/market-activity/fund-flows-07-10-24/">The Block</a>.</li>



<li>Crypto M&amp;A activity may be on the rise, with FalconX shopping around for potential acquisitions, Bloomberg <a href="https://www.bloomberg.com/news/articles/2024-10-07/crypto-firm-falconx-hunts-for-acquisitions-after-record-quarter">reported</a>.</li>
</ul>



<h2 class="wp-block-heading">The Riff</h2>



Q: How’s crypto VC funding holding up?



We’re in the “keep on keeping on” stage of VC activity.&nbsp;



Crypto companies raised <a href="https://blockworks.co/news/humanode-ecosystem-funding-program-dapps">$823 million last month</a>, roughly $158 million lower than August’s total of $981 million.&nbsp;



So there’s not a huge discrepancy — which can be seen as a good thing — but we’re also not seeing a big boom. Something that PitchBook’s Robert Le has cautioned could be on the back burner until next year, at the very least.&nbsp;



With the election next month, it’ll be interesting to compare October’s figures to August and September.



DeFi has remained the top category for funding raises throughout the last two months, with over 63 companies raising.



While a lot of folks are hoping that we break out of this ‘will they, won’t they’ cycle when it comes to regulatory clarity (arguably one of the biggest holdups for the industry right now), Le isn’t too certain we’re on the quick path to anything concrete after the election.



“Currently there is not a strong imperative in Congress to push through crypto legislation, and we do not expect the legislative environment for crypto to change significantly after the election,” he wrote in a <a href="https://pitchbook.com/news/reports/q4-2024-pitchbook-analyst-note-us-presidential-election-guide?utm_term=&amp;utm_campaign=analyst_note&amp;utm_medium=newsletter&amp;utm_source=daily_pitch&amp;utm_content=q4_2024_pitchbook_analyst_note_us_presidential_election_guide">note</a> last week.



Let’s just hope something gives, because we need a catalyst stat.



— Katherine Ross



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Kicking the tires on this bitcoin bull market

$823 million.&nbsp;



That’s the amount raised by crypto companies in September alone. The sum is broken up across 200 different companies that raised last month, with Celestia’s ecosystem fundraise of $100 million topping that list.&nbsp;



Infinex was a close second, raising $65 million through public token sales.&nbsp;



Strategic funding, like Celestia, topped the amount of funding done last month, in part helped by TON Foundation’s raises for its ecosystem funds. But seed rounds are topping the charts, per TIE data. 41 companies raised seed rounds last month.&nbsp;



Read more: <a href="https://blockworks.co/news/celestia-raises-155m-a16z-decentralized-science">Funding Roundup: Celestia’s raised $155M</a>



Last month, DeFi companies raked in the funding money, with 33 companies announcing raises.&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXf0Q4CJcoGzqEAVTevMLV4mszgb50b2pcBceExmdcZfpTDhkl6XPCNZLSU0P0HOH6lQGe1E42u_4tkaQ35s1Crr7vq4hHc4ZFBStNeqi2St3oZI4uTUwMNNdA0MJkyclHW9KEdAFiKolKW3JeWquuLsFnJN?key=h7RFuDSkBC_2jtmxWOL6Pg" alt=""/><figcaption class="wp-element-caption">Source: The TIE Terminal</figcaption></figure>



But that group didn’t raise the most money. Instead, it was Protocol Development, which raised a total of $192 million, per the data.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXffgrNb3lbR_c400G3r-ZDhJHH8p0yIIL1YZ95IBT_FeBqLdFnpROVoN8RF9_wTRV-RUg3Aoh5k6u5Ahh3ywrt68fkMFJ2RzUJdX4IJRLIEww3FHj7YKGq-tyASf6IfMiY2bhJPI3Q7zDHNaPhCZr8yM5DV?key=h7RFuDSkBC_2jtmxWOL6Pg" alt=""/><figcaption class="wp-element-caption">Source: The TIE Terminal</figcaption></figure>



So far, October is looking quiet — aside from some token unlocks coming later this month. A reaction to the spooky season or are we just taking a collective breath? It’s too soon to tell.



Now onto a funding announcement&#8230;



Humanode exclusively told Blockworks that it was launching an Ecosystem Funding Program. The $10 million program aims to “support and nurture the next generation of Sybil-resistant projects on its chain.”



Read more: <a href="https://blockworks.co/news/grass-data-verification-depin-funding">Funding Roundup: HackVC leads funding round for DePIN Grass&nbsp;</a>



It’s unclear who participated in the raise, however, with the team noting that it was supported by “funds and angels.”



The program will initially focus on “consumer dapps with the potential to reach one million users. To many, that goal may seem small, however, the key here is that this will be on the Humanode EVM, utilizing crypto biometrics for Sybil resistance.”&nbsp;



Humanode plans to collaborate with the projects selected for the program, offering not only funding but also technical, media and community-building support. Both the founders and other members of the Humanode Core Team will assist these projects throughout the process.



Read more: <a href="https://blockworks.co/news/ethcc-2024-attendees-want-web3-apps">Web3 Watch: EthCC attendees ask: “Where are the apps?”</a>



They clarified in this case, &#8220;users&#8221; refers to unique individuals, not accounts.



“I know it sounds cliche, but we are investing in people and projects that have the drive and potential to hoist their flag, mark their place in the industry and understand the value of Sybil-resistance in their dapps,” Dato Kavazi, the co-founder of Humanode, said.



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Funding Roundup: Crypto companies raised $823M in September

A couple crypto exchanges named new leaders, while other executives have stepped back from their roles, or plan to do so soon.



A former Binance executive with various leadership stints at traditional finance companies has joined crypto exchange Bybit as its chief legal and compliance officer.&nbsp;



Robert MacDonald was Binance’s head of sanctions after working in a previous role there to build out the company’s anti-bribery and corruption program.



Read more: <a href="https://blockworks.co/news/changpeng-zhao-binance-next-steps">Former Binance CEO hints at potential next steps</a>



Prior to working at <a href="https://blockworks.co/tag/binance">Binance</a>, MacDonald held various compliance-related positions at Standard Chartered Bank and HSBC. Earlier on — from 2008 to 2011 — he was a compliance and legal officer at the UK Ministry of Justice.&nbsp;



Regulating stablecoins and ensuring compliance with anti-money laundering (AML) and know-your-customer (<a href="https://blockworks.co/tag/kyc">KYC</a>) regulations are pressing challenges, MacDonald said in a statement.&nbsp;



“These issues give legitimate crypto exchanges with the technical know-how and right culture an opportunity to change the digital asset industry for the better,” he added.&nbsp;



As for another people-related update at a crypto exchange, Jesse Pollak is set to expand his role outside of leading Coinbase’s layer-2, <a href="https://blockworks.co/tag/base">Base</a>. Pollak said in an X <a href="https://x.com/jessepollak/status/1840880049165365432">post</a> he will also lead Coinbase Wallet. “I’m really excited to take on this new mandate and to accelerate our mission of bringing a billion people and a million builders onchain,” he wrote.



<h2 class="wp-block-heading">Stepping away</h2>



Additional changes around the industry come as some step away from their positions.&nbsp;



Coinbase’s Manish Gupta has decided to “move on to take some well deserved time to recharge before starting his next chapter,” <a href="https://x.com/emiliemc/status/1840926313265447073?s=46">according to</a> Coinbase Chief Operating Officer and president Emilie Choi.



Gupta has been an engineering executive at the company for nearly five years, his LinkedIn <a href="https://www.linkedin.com/in/manish-gupta-9a9490/">page</a> indicates. He held similar roles at Lyft and Google prior to that.



A Chainalysis spokesperson <a href="https://www.theblock.co/post/319431/chainalysis-ceo-michael-gronager-steps-back-personal-issue">told</a> The Block that Chainalysis CEO Michael Gronager has been on leave since Sept. 25 due to &#8220;a personal issue.&#8221;



Sari Granat, Chainalysis&#8217; president and chief operating officer, is reportedly working as the company’s interim CEO. It is unclear whether Gronager could return to that role or when.



Others set to leave their posts are Coin Center leaders Jerry Brito and Robin Weisman.



Brito has been the crypto policy-focused nonprofit’s executive director since 2014, while Weisman has held the senior policy counsel role since that year, their LinkedIn pages indicate.



Peter Van Valkenburgh, who has served as Coin Center’s director of research, will take over as its executive director on Jan. 1, Brito said in an X <a href="https://x.com/jerrybrito/status/1840783764793737359?s=46&amp;t=yjAdM2ddX0KgGQimu7jcDQ">post</a>. Landon Zinda will take over the organization’s government outreach efforts as policy director, while Neeraj Agrawal and Antonie Hodge will have expanded roles in fundraising and management.



Read more: <a href="https://blockworks.co/news/coin-center-senior-staff-stepping-down">Coin Center senior staff to step down at end of year&nbsp;</a>



“Our goal at the outset was to secure time for Bitcoin to reach ‘escape velocity,’ and on that score, I think we succeeded,” Brito wrote on X. “The struggle is not over yet, though. We must remain vigilant and continue to fight for our rights to make and use crypto software, and to do so privately.”



And in case you missed it: Gurbir Grewal, the head of the Securities and Exchange Commission enforcement division since July 2021, <a href="https://blockworks.co/news/sec-enforcement-director-departure">will also be leaving his post</a>.



<h2 class="wp-block-heading">Other updates:</h2>



<ul class="wp-block-list">
<li>Prometheum named Jacek Bugaj as its head of product — a role in which he will work with the company’s broker-dealers and technology teams “to streamline the development of blockchain-enabled financial products.” Bugaj was previously head of macro product management at Two Sigma.</li>



<li>Singapore Gulf Bank, a digital bank backed by Bahrain’s sovereign wealth fund, appointed Ali AlShamma as chief financial officer and Elaine Leong as its chief operating officer. </li>



<li>Jack Lipstone is now the head of DeFi business development at Sei Foundation, he revealed in an X <a href="https://x.com/jacklipstone/status/1841490654414643553?s=61&amp;t=cTjnqXYLrQCkF9wwu7Yb2A">post</a>. </li>
</ul>



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Crypto Hiring: Coinbase, Bybit see changes; leaders step away

Buckle up, Lamborghinis are coming to the metaverse.



Automobili Lamborghini and Animoca Brands are collaborating to bring the iconic Italian luxury vehicles into “Fast ForWorld,” Automobili’s upcoming metaverse platform.



Players will be able to own and trade Lamborghini sport cars as interoperable digital assets across gaming platforms such as Torque Drift 2, REVV Racing and the Motorverse Hub.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">We are thrilled to announce our partnership with <a href="https://twitter.com/Lamborghini?ref_src=twsrc%5Etfw">@Lamborghini</a>! Together, we will drive digital vehicle culture forward to shape the future of brand engagement in the automotive industry. <a href="https://twitter.com/TheMotorverse?ref_src=twsrc%5Etfw">@TheMotorverse</a> is in on it 👀 Wen Lambo 🏎️ <a href="https://t.co/uBy9vfO7EE">https://t.co/uBy9vfO7EE</a> <a href="https://t.co/BeIFuCZ9vu">pic.twitter.com/BeIFuCZ9vu</a>&mdash; Animoca Brands (@animocabrands) <a href="https://twitter.com/animocabrands/status/1821517925804904590?ref_src=twsrc%5Etfw">August 8, 2024</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Fans will have to purchase a Lamborghini Revuelto digital asset in order to access the ecosystem, which will be available in November.



Read more: <a href="https://blockworks.co/news/dolce-gabbana-lawsuit-nft-collection">Web3 Watch: Naked in the metaverse</a>



Fast ForWorld is developed by Gravitaslabs, a Web3-focused game design technology company and Animoca Brands partner.



<h2 class="wp-block-heading">Ubisoft to launch NFT collection via Magic Eden</h2>



Gaming juggernaut Ubisoft is launching the “Niji Warrior ID Cards” NFT <a href="https://www.prnewswire.com/news-releases/magic-eden-and-ubisoft-launch-nft-collection-on-arbitrum-for-captain-laserhawk-the-game-302267766.html">collection</a> on the Arbitrum layer-2 via the <a href="https://blockworks.co/tag/magic-eden">Magic Eden</a> marketplace.



The NFT mint will be a collection of 10,000 and will use dynamic metadata to reflect player activity in Ubisoft’s upcoming multiplayer shooter game Captain Laserhawk: The G.A.M.E., as well as governance over the game’s updates.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">Some partnerships just make sense. We’ve teamed up with <a href="https://twitter.com/Ubisoft?ref_src=twsrc%5Etfw">@ubisoft</a> to launch their newest game, <a href="https://twitter.com/EdenOnline_exe?ref_src=twsrc%5Etfw">@EdenOnline_exe</a>, built on the <a href="https://twitter.com/arbitrum?ref_src=twsrc%5Etfw">@arbitrum</a> blockchain. With this comes their upcoming NFT mint, and the first Arbitrum mint on Magic Eden. Welcome to the Home of Web3. <a href="https://t.co/k5xoORGbV6">pic.twitter.com/k5xoORGbV6</a>&mdash; Magic Eden 🪄 (@MagicEden) <a href="https://twitter.com/MagicEden/status/1842223904892313910?ref_src=twsrc%5Etfw">October 4, 2024</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Captain Laserhawk: The G.A.M.E. is inspired by the “Blood Dragon” video game from Ubisoft’s popular Far Cry series, which also has an accompanying animated TV series “Captain Laserhawk: A Blood Dragon Remix” on Netflix.



This marks Magic Eden’s first <a href="https://blockworks.co/tag/nfts">NFT</a> deployment on Arbitrum, as well as Ubisoft’s second foray into blockchain gaming. Its first, Champions Tactics: Grimoria Chronicles, is an upcoming gothic-themed turn-based RPG that is set to launch on the Oasys layer-1 blockchain.



<h2 class="wp-block-heading">One interesting stat:</h2>



<ul class="wp-block-list">
<li>Podcast NFT mints on the Pods dapp have <a href="https://x.com/podsdotmedia/status/1840064720017260796">seen</a> about 475,000 mints and $1 million in mint volume in the last year.</li>



<li>NFT trading volumes continue to trend down to <a href="https://x.com/punk9059/status/1840947500858962164">115,000 ETH</a> for the month of September, its lowest since January 2021. The number of unique NFT buyers is also down to <a href="https://x.com/punk9059/status/1841133514604880056">30,000</a>.</li>
</ul>



<h2 class="wp-block-heading">Also of note:</h2>



<ul class="wp-block-list">
<li>Pudgy Penguins is launching “<a href="https://x.com/pudgypenguins/status/1840496999457574915">Pudgy Arcade</a>” arcade machines across the US.</li>



<li>The first Bitcoin Ordinal NFT “<a href="https://x.com/ChristiesDigArt/status/1839353007261307134?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1839353007261307134%7Ctwgr%5E8d418a26defade81a84bfc41dc5535c51bc9848a%7Ctwcon%5Es1_&amp;ref_url=https%3A%2F%2Fopensea.io%2Fblog%2Farticles%2Fopensea-digest-october-2-2024">Ascend</a>” will go on sale on Oct. 10 at a live Christie’s auction.</li>
</ul>



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Web3 Watch: Lamborghinis are coming to the metaverse

Though bitcoin rallied Friday after a stronger-than-expected jobs report, industry watchers said geopolitical uncertainties could temper economic optimism in the coming weeks.&nbsp;&nbsp;



Crypto investors sometimes refer to October as “Uptober” due to the gains bitcoin has historically seen during the month.



BTC gains in October have averaged roughly 20% since the asset’s inception, noted 21Shares research head Adrian Fritz. The trend is even more pronounced in halving years, he added. These generally also coincide with election cycles.



“Global central banks are cutting rates and liquidity is beginning to trend upwards,” Fritz explained. “Historically bitcoin has performed well during periods of monetary easing.”



But XBTO Chief Commercial Officer Javier Rodriguez-Alarcon told Blockworks that the upcoming US elections, uncertainty around the Fed’s rate path and an escalating conflict in the Middle East could lead to significant disruptions.



Read more from our opinion section: <a href="https://blockworks.co/news/political-candidates-cannot-ignore-crypto-voters">Political candidates can no longer ignore crypto voters</a>



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



Bitcoin’s price jumped to roughly $62,000 soon after the US Bureau of Labor Statistics reported nonfarm payroll employment rising by 254,000 in September. That was up from a revised 159,000 increase in August. The unemployment rate, at 4.1%, was lower than the 4.2% expectation.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;



BTC fluctuated from there, ending up around $62,300 by 4 pm ET — up 2.5% from 24 hours prior.&nbsp;



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



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



The odds of a 25bps Fed rate cut next month sat at 95.5% at 4 pm ET, according to data from <a href="https://link.mail.beehiiv.com/ss/c/u001.ZaVO_gulYIDHwTR9OqetUwz1Kqf8ImYP6TW1jXQyp9xw5CeAV0W_M5FKcz_b8O-4NF3bR3wrHAu5oMbs0YwXQELa8-BDoFyB2wL7CY55dAcOGvva5Xmgh_BDiTJDi6hpOh4uaNA6egWH3zCtyjkQC-69gWVhJExzkjtADkPtjGbPYE5uMk6KPISDwXdCl_77i6td27f4nlEj9PtvLGbP20JMR3BxxyB5zjZo8Tql_ZAuVl_QiHcc4wiv_J-yKP0D9ya_0QqSOy8CghHY_da_2jJKnUXNPElTrChseOC5OYSgx4RRXwaKc88wtqxjNNI1-UhDClXuVB1U_dHm5s5AxtREgW3FFD-FkINe1vHxQS3Q8QpB3EpCLGGD1x5xu9YI/4ab/GQjfF9b0Qf6By-XxsIoFrg/h19/h001.zEqXeh3A39CJrTl1gRsx60oXpKcQlqYOGsocXjsUWVU">CME Group</a> — up from about 47% a week ago.&nbsp;



October kicked off with a downward market move spurred in part by an Iranian missile attack on Israel. That came after Israel launched a ground operation in Lebanon.&nbsp;



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



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



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



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



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



Political developments could also impact crypto prices in the coming weeks given the US <a href="https://blockworks.co/news/forward-guidance-newsletter-crypto-survey-data">presidential election</a> is just 32 days away.&nbsp;



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



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



Donald Trump and Kamala Harris have both made pro-crypto comments as some expect crypto holders to represent <a href="https://blockworks.co/news/political-candidates-cannot-ignore-crypto-voters">a key voting bloc</a> in November. While Trump has <a href="https://blockworks.co/news/on-the-margin-newsletter-trump-bitcoin-mining-meeting">voiced support for bitcoin miners</a> and <a href="https://blockworks.co/news/donald-trump-speaks-bitcoin-2024">vowed to halt government bitcoin sales</a>, Harris more recently <a href="https://www.bloomberg.com/news/articles/2024-09-22/harris-vows-to-grow-ai-crypto-industries-in-pitch-to-nyc-donors">said</a> during a fundraiser that her administration would help grow investment in the crypto and AI segments.



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



A modified version of this article first appeared in the daily Forward Guidance newsletter. Subscribe <a href="https://blockworks.co/newsletter/forwardguidance">here</a> so you don’t miss tomorrow’s edition.



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As BTC rallies after jobs report, what are the ‘Uptober’ odds?

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



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



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



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



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



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



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



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



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



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



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



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



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



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



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



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



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



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



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



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



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



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



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



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



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



— Ben Strack&nbsp;



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



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



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



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



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



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



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



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



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



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



— Casey Wagner



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



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



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



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



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



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



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



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



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



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



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



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



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



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



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



— Ben Strack 



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



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



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



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



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Exploring the ‘Uptober’ drivers and current outlook

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With <a href="https://blockworks.co/news/bitcoin-etf-inflows-interest-rate">spot bitcoin ETFs seeing successful launches</a> and MicroStrategy <a href="https://blockworks.co/news/corporate-bitcoin-purchases-accelerate">buying with reckless abandon</a>, the oldest cryptocurrency has proven its value — at least to some institutions.&nbsp;



Institutions are to blockchains what whale traders are to casinos; having just a couple can really drive up revenue. But for non-Bitcoin blockchains, the path to institutional adoption is a little less clear.



Ether spot ETFs <a href="https://blockworks.co/news/education-required-to-spur-eth-etf-outflows">have so far been uninspiring</a>, and large companies don’t seem to be putting non-bitcoin assets on their balance sheets with nearly as much gusto. Solana is likely far from seeing a spot ETF of its own, but it’s making a run for institutions, and some see it as having more institutional potential than Ethereum.



I got thinking about this after receiving a note from Katalin Tischhauser, Sygnum’s head of investment research.



Tischhauser said Solana has made “real progress” as a layer-1 in the past year and a half, but expectations that it would make a serious run for Ethereum’s “leading position” among smart contract blockchains were misplaced. Ethereum still wins in market share, plus Solana’s volume metrics are “overstated” and based on memecoins, which is a fragile place to make hay, Tischhauser said.



But Tischhauser said the way she thinks Solana can pass Ethereum is by drawing institutions for tokenization platforms and stablecoins.



“[T]here have been indications recently that even conservative institutions may place greater emphasis on Solana’s scalability over Ethereum’s greater stability and security,” Tischhauser wrote. She added that PayPal and Visa both praised Solana’s fast and cheap architecture when <a href="https://blockworks.co/news/paypal-pyusd-stablecoin-live-on-solana?utm_source=lightspeed-4bed7b.beehiiv.com&amp;utm_medium=newsletter&amp;utm_campaign=are-we-there-yet">rolling out initiatives</a> using the blockchain.



In a separate note, B2BINPAY chief marketing officer Georgy Slavin-Rudakov said Solana’s “efficiency and institutional adoption” could help it challenge Ethereum, citing tokenization and stablecoins as sectors where Solana could see growth.



In a text, Solana Foundation head of institutional growth Nick Ducoff cast stablecoins as a near-term means to gin up demand for real-world assets. In the long run, tokenization could make the pie bigger by bringing more diverse users and assets to Solana, Ducoff added.



Or perhaps institutional adoption could come from the Solana SVM being used by permissioned blockchains.&nbsp;



Earlier this week, <a href="https://x.com/Lightspeedpodhq/status/1841531249091121254">I spoke with Arnold Lee</a> from Sphere about the payments infrastructure startup’s plans to launch SphereNet, which will be a private shared ledger running on Solana’s software — the type of thing that helps institutions and fintechs stay compliant. The project has a <a href="https://www.anza.xyz/blog/an-architectural-overview-of-spherenet">co-sign</a> from Anza, which is the engineering firm spun out of Solana Labs.



“Permissioned blockchains in some sense are still successful; we just don’t think of them as blockchains,” Lee said.



He added that the closest example would be Ripple, which acts as a permissioned counterparty on the financial network RippleNet, and has shown surprising resilience as a layer-1 (it’s still the seventh-largest crypto) despite being out of the spotlight <a href="https://blockworks.co/news/sec-files-ripple-appeal-precedent">and in regulators’ crosshairs</a> in recent years.



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



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Institutions could be Solana’s edge against Ethereum

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<h2 class="wp-block-heading">Funding science onchain with BIO protocol&nbsp;</h2>



The general way a scientist would bring their lofty academic ideas to market is to first get published in a peer-reviewed journal, spend years setting up a BioTech company as a CEO and then raise funding for that idea.



But if a collective group of individuals could raise a whopping $47 million on the blockchain to purchase an original copy of the US Constitution back in 2021, then surely the same model could be applied to fund niche fields of scientific research.



That’s what the nascent subsector of decentralized science (DeSci) has been attempting for the last few years. According to <a href="https://www.coingecko.com/en/categories/decentralized-science-desci">CoinGecko</a>, DeSci today comprises about 25 tokens with a total market cap of $459 million.



The most prominent DAO at the forefront of this effort is the <a href="https://blockworks.co/news/vitadao-pfizer-biotech-arm">longevity-focused VitaDAO</a>, which previously <a href="https://www.vitadao.com/blog-article/vitadao-closes-4-1m-fundraising-round-with-pfizer-and-shine-capital">raised</a> $4.1 million in January 2023 from Pfizer Ventures, alongside Bryan Johnson and Balaji Srinivasan. 



Today, VitaDAO is one of eight BioDAOs that are partnered with BIO.xyz, a traditional accelerator by Molecule that launched in 2022. BIO.xyz will eventually spin out a decentralized protocol and dapp of the same name that is expected to launch on the Ethereum L1 early next year.&nbsp;



The BIO dapp will effectively serve as a Y Combinator-like accelerator program to fund a <a href="https://blockworks.co/news/daos-web3-future">variety of scientific DAO project</a>s dedicated to specific areas of research.



For instance, HairDAO is trying to solve hair loss, CyroDAO is researching cryopreservation, AthenaDAO is focused on women&#8217;s reproductive health and PsyDAO is looking at the use of psychedelics for mental health.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXd0u7xq653Wo0jnCH_ohW8lnvTGIKWpbNLSpCmJLZiu-vrINIMgNvoxg1DIeSFYkbjC1oXe6q4yJBiJKHERIsbqObbuJaTgIut44a85GpPuhCeHuu-4DXeQZSgTDI4IlS4ndbFuTM8XEwCc2rzkFtvlNps?key=yECc-QPO3h709JdfvfadbQ" alt=""/></figure>



“After we built VitaDAO, we were approached by many people [who] wanted us to build a DAO for other biotech fields other than longevity,” Kohlhaas told Blockworks.



The need to create a unifying piece of liquidity infrastructure came naturally as an idea to unify the many illiquid tokens of these DAOs, Kohlhaas said.



The first $BIO token fair launch mint occurred in Q2 2024 and raised $8.25 million. The token remains non-transferable (though it is currently <a href="https://app.bio.xyz/genesis/round2">swappable</a> for specific BioDAO tokens) and is going through its second fair launch round, having raised about <a href="https://app.bio.xyz/genesis">589 million</a> BIO so far.



For now, aspiring BioDAOs need to be first whitelisted by BIO protocol before proceeding to a DAO token holder vote, though the plan is for this process to be fully permissionless.



Put simply, it’s an alternative funding model using the Web3 tools of tokenization for scientists (or patients like Ron Woodroof in the Oscar-winning film Dallas Buyers Club) who are restricted from the thick political bureaucracies of the pharmaceutical industry.



It’s the <a href="https://blockworks.co/news/decentralize-science-research-data">familiar DAO model</a> that we’ve seen replicated across Web3 from financial products and social media platforms to games. Even the prestigious scientific journal Nature has <a href="https://x.com/NatureBiotech/status/1708892918700769698">acknowledged</a> scientists should “get on board” with the model.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">The community of the DAO Decentralized autonomous organizations are growing as alternative research funding models, but are also strong scientific communities. We should get on board <a href="https://t.co/x8wigDxOIh">https://t.co/x8wigDxOIh</a> <a href="https://t.co/0PRv5OrZi4">pic.twitter.com/0PRv5OrZi4</a>&mdash; Nature Biotechnology (@NatureBiotech) <a href="https://twitter.com/NatureBiotech/status/1708892918700769698?ref_src=twsrc%5Etfw">October 2, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



BIO protocol offers an initial funding seed of about $100k to $250k for approved BioDAOs, as well as connections with service providers in their network and help with legal, branding and tokenomics.



In exchange, BIO protocol receives 6.9% of the token allocation of each BioDAO and some ownership in the BioDAO’s NFT intellectual property.



“We want these scientists or patients to be focused on doing the research, not flying around to crypto conferences and trying to figure out what a SAFT, or Univ3 liquidity position or multisig is,” Kohlhaas said.



After DAO approval, $BIO stakers can receive $BIO emission rewards and are whitelisted for priority access to the intellectual property-NFT funding rounds of respective BioDAOs. At that stage, they may decide what future BioDAOs should be approved onto the protocol.



Each BioDAO pursues one branch of scientific research (e.g. longevity, hair loss), though they may also work on several research projects at any given time.&nbsp;



Each piece of research is typically tokenized as a specific NFT, or “IP-NFT,” which offers a quick way for investors to fund a specific research project and own a piece of the pseudo-patent.



One VitaDAO research project offers a concrete example of the benefits behind marrying markets with scientific research in its very early stages. A project behind new gene therapy to target aging saw a 150% jump in value for its <a href="https://www.coingecko.com/en/coins/vitarna">VITARNA</a> token after <a href="https://drive.google.com/file/d/1ffqxicY_S9cohtkEloi6sCwrDgkA2Wad/view">positive results</a> were published on in-vitro tests.



These BioDAOs technically operate under a non-profit structure, yet some have chosen to monetize their work in order to fund further research. <a href="https://www.hairdao.xyz/">HairDAO</a>, for instance, has an actual <a href="https://shop.hairdao.xyz/">shampoo</a> product on the market, with its related tokenized $POO tokens.



Kohlhass likened it to a university endowment fund that actively invests to grow the university’s treasury.



It’s a pretty complex structure, and this attempt at disrupting the fundraising process around the trillion dollar industry of Big Pharma is just one subsector of DeSci.



Other DeSci verticals are targeting the problems involved in academic peer-review publishing, including Research Hub, a project founded by <a href="https://blockworks.co/news/brian-armstrong-tokens-for-science">Coinbase’s Brian Armstrong</a>.



<h2 class="wp-block-heading">Chart of the Day</h2>



NFT trading volumes at a low:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdo_9-exxzKXs7nXFd97zoou9VzG46HelKCb0PjxpYt0LD-6LqL7nJrJAztdj_vYdPgDwV5fhLUPcxLLPzWkRc1ORU9ZLj2evdgnMfu5lvvm1mHa8NLUGba_lsErH2MPNCM5adRRzH6QYV-XVRVvHdyN4gT?key=yECc-QPO3h709JdfvfadbQ" alt=""/><figcaption class="wp-element-caption">Source: <a href="https://x.com/punk9059/status/1840947500858962164">Twitter</a></figcaption></figure>



NFT trading volumes in September are at all-time lows of 115k ETH ($272 million), the lowest since January 2021. Based on <a href="https://coinmarketcap.com/nft/?page=1">CoinMarketCap</a> data, the total market cap of NFTs is about $29.9 billion.



Updated October 4, 2024 at 4:49 pm ET: Removed mention of Vitalik Buterin&#8217;s participation in a funding round.



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BIO protocol is pushing scientific funding onchain

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Happy Fri-yay!



It’s been a weird week as we not only clean the skeletons out of our closets but also prepare for the last few months of the year.&nbsp;



But no one’s had a worse week than ETH, which is down 10% so far this week (though things are starting to look up today). So much for a bullish start to Q4.&nbsp;



All that aside, there are some bullish trends on the horizon. For example, Permissionless is just a few sleeps away and there’ll be plenty of folks weighing in on where we go from there with a healthy sprinkle of what’s making people bullish…or bearish.&nbsp;



Now I’m off to pack my bags. See y’all next week!



— Katherine Ross



<h2 class="wp-block-heading">The clock’s ticking</h2>



By now, most loyal Empire readers know about Binance executive Tigran Gambaryan and his ongoing imprisonment by the Nigerian government.&nbsp;



But, ICYMI, Gambaryan was detained in Nigeria at the beginning of this year after taking a meeting with government officials on behalf of Binance. The country and Gambaryan’s employer are — to put it lightly — not on great terms. And, unfortunately, Gambaryan became a pawn in the ongoing dispute between the two.&nbsp;



Fast forward to now, and <a href="https://blockworks.co/news/continued-detainment-binance-executive-outrageous">Gambaryan’s suffering</a> from health issues yet is still imprisoned at the Kuje Prison. And I wish I could report that there was, well, more to report. But unfortunately, at this point, there’s not.&nbsp;



Gambaryan will appear in court next Wednesday, Oct. 9 for a hearing where the judge will decide whether to release him on bail



However, I wanted to bring him up not only because of the ongoing situation, but also because the more I’ve looked into Gambaryan, the more I’ve realized just how extensive his crypto ties are.&nbsp;



When I first started reporting on the situation back in February, I referred to Tigran as an ex-IRS official. But, dear reader, did you know he became a specialist (according to a 2015 affidavit, which we’ll get to) in digital currency back when he was with the IRS?&nbsp;



Wired’s Andy Greenberg — who wrote the book Tracers in the Dark: The Global Hunt for the Crime Lords of Cryptocurrency with Gambaryan as the protagonist — called the former IRS agent “kind of a legendary figure in the crypto crime investigation world.”



Gambaryan served as a special agent involved in taking down former Drug Enforcement Administration agent Mark Force and former Secret Service agent Shaun Bridges, who were both involved in the Silk Road.&nbsp;



He wrote that the two “abused their positions” as federal agents in a <a href="https://www.justice.gov/sites/default/files/opa/press-releases/attachments/2015/03/30/criminal_complaint_force.pdf">2015 affidavit</a>. When detailing his experience, he said that he “developed a specialty in cyber and digital currency crimes.”



Following his government career, Gambaryan went on to join Binance just over three years ago, in 2021.&nbsp;



“Tigran led several multi-billion dollar cyber investigations, including the Silk Road corruption investigations, BTC-e bitcoin exchange, and the Mt. Gox hack,” Binance said in its <a href="https://www.binance.com/en/blog/leadership/former-irsci-special-agent-tigran-gambaryan-joins-binance-as-vp-of-global-intelligence-and-investigations-421499824684902817">press release</a> announcing the hire.



Earlier this week, Tigran’s wife, Yuki Gambaryan, did an interview with Illicit Edge’s new podcast “Designated” about his imprisonment.&nbsp;



“Tigran is innocent, he didn’t do anything wrong,” she told host Yaya Jata Fanusie. She also pushed for more “decisive actions” from the US government.&nbsp;&nbsp;



“I am having this constant fear of losing Tigran,” Yuki went on to say.



— Katherine Ross



<h2 class="wp-block-heading">IYKYK</h2>



Could BitGo’s stablecoin offering dump the entire stablecoin market on its head?



Empire’s Jason Yanowitz seems to think so. In <a href="https://blockworks.co/podcast/empire/21735e1a-81fd-11ef-a35d-57be37edf4f0">today’s Empire episode</a>, he mused that the launch of USDS could spur more companies to launch their own stablecoins.



“We&#8217;re going to see the custodians launch stablecoins. We&#8217;re going to see the exchanges launch stablecoins. We&#8217;re going to see FinTechs like Robinhood launch stablecoins…Visa is helping BBVA launch a stablecoin. We&#8217;re going to see the banks launch stablecoins. Everybody and their mother is going to launch a stablecoin,” Yanowitz said.&nbsp;



We have to note, though, that <a href="https://blockworks.co/news/robinhood-retail-user-engagement">Robinhood’s Johann Kerbrat told us</a> earlier this week that they’re not currently looking into a stablecoin.



Yanowitz also thinks that the stablecoin issuers’ “hands are going to be forced and they&#8217;re going to need to figure out how to give yield back to the users. And the way that they&#8217;re going to do that is not by giving yield directly to the users, but by giving it to the people, probably the exchanges who are sitting on the yield.”



Perhaps this could be enough to dethrone Tether. Perhaps not.&nbsp;



And now you know.&nbsp;



It’s officially Q4 (where did the time go?) which might just be the perfect time to take a look back at last quarter and see if we can parse the tea leaves here.&nbsp;



Admittedly, unrest in the Middle East makes those leaves a bit murkier than we perhaps would have hoped. But, without counting unknown events or catalysts, the general expectation for Q4 is a positive one.&nbsp;



I know we’ve been light on the charts this week, so I’ve dug up a few to end the week, starting with this one courtesy of a CoinMarketCap <a href="https://x.com/CoinMarketCap/status/1841795552570441979">report</a> that recapped last quarter.&nbsp;



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="1089" src="https://blockworks-co.imgix.net/wp-content/uploads/2024/10/unnamed.png?w=1024&amp;h=1024" alt="" class="wp-image-92653" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2024/10/unnamed.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/unnamed.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/unnamed.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/unnamed.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/unnamed.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/unnamed.png?w=378 378w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/unnamed.png?w=383 383w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/unnamed.png?w=322 322w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/unnamed.png?w=80 80w" sizes="(max-width: 1600px) 100vw, 1600px" /><figcaption class="wp-element-caption">Source: CoinMarketCap</figcaption></figure>



We already covered why this might not be an Uptober earlier this week, but perhaps there’s still a chance for either/both November and December to take on a more positive tone.



A rising tide floats all boats, right? Well, some sectors of crypto might not even need bitcoin to go on a green spree to notch gains.&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXd5xrTtTyBU_56bbTlfctBaoNnaqBj9iyQMUXerfjy_GuF3cBmW2OH7BkvIDk1ejmjkB8DUPfxFJ0XiuqC2kEKmdz3svkR-_zlp-7uAb1r4wrcmROjwXaJYeQLFK8CWBLIrPaUuuX4UGa-M1tEGZ5pi5kgw?key=PqCWdb8L6LEdmA7UJgYy_g" alt=""/><figcaption class="wp-element-caption">Source: CoinMarketCap</figcaption></figure>



To no one’s surprise, memes were on fire last quarter. But, perhaps slightly surprising, the data from CMC shows a “shift from DeFi and infrastructure projects towards more speculative and consumer-focused sectors like AI, media, and memes in the past quarter.”



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXctzBmtucpahAoonrCZsN9rXDhMMt8R9Pzqrdr_TdgAHc-nJch2bGxXKGQD7SJNqT6wM0dqIgUye0MmT19XXNWzQw6dfZ8Q6fepEbQvqFNSK71TiwQ1uTNHS0jbLCDpCmKde4Z227JzUSSf4Kyk69ht06VU?key=PqCWdb8L6LEdmA7UJgYy_g" alt=""/><figcaption class="wp-element-caption">Source: CoinMarketCap</figcaption></figure>



Analysts at CMC are in general consensus with other folks I’ve talked to: Q4 could be more positive because it gets a lot of unknowns out of the way, such as the US presidential election.&nbsp;



“Historically, Q4 has often been a strong period for Bitcoin, and on average BTC has yielded 90.33% price increase in Q4 for the past 10 years. Especially, this year we’re entering Q4 from a relatively low price level. With these factors in mind, there’s a significant chance that we could see a price pump during the remainder of the year, potentially even pushing Bitcoin towards another all-time high,” analysts wrote.



But more unknowns will probably lead to drawdowns. If only we had a crystal ball to steer the course.



— Katherine Ross



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Imprisoned Binance exec a ‘legendary’ crypto crime investigator

Banks are gearing up to trial crypto transactions on the Swift network as the industry’s shift toward tokenization accelerates. Financial institutions will soon use Swift’s platform to settle “digital assets and currencies,” with pilots kicking off next year.&nbsp;



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



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



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



<a href="https://blockworks.co/tag/swift">Swift</a> is not new to experimenting in this space.&nbsp;&nbsp;



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



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



Read more: <a href="https://blockworks.co/news/swift-tests-chainlink-ccip?utm_source=forward-guidance.beehiiv.com&amp;utm_medium=newsletter&amp;utm_campaign=the-pre-jobs-report-primer&amp;_bhlid=9480eda1bf4cd1651ee170ae17f872d90c639d0a">Swift details findings in tests of Chainlink’s cross-chain interoperability</a>&nbsp;



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



It is participating in Project Agora (led by the Bank for International Settlements), which is exploring how <a href="https://blockworks.co/tag/tokenization">tokenization</a> can enhance wholesale cross-border payments. 



Swift is also looking into how its “interlinking capabilities” could integrate the US <a href="https://blockworks.co/news/tradfi-blockchain-trials-mass-adoption">Regulated Settlement Network</a>, for example, with traditional financial systems. Visa and Mastercard said in May they would join banks like JPMorgan and Citigroup to test this network&nbsp;



Colin Butler, Polygon’s global head of institutional capital, previously told Blockworks that such entities getting closer to aligning on a standard represents “the five-yard-line for mass institutional adoption.”



Swift’s announcement came the same day that Visa <a href="https://blockworks.co/news/visa-to-help-banks-test-tokenized-assets-smart-contracts?utm_source=forward-guidance.beehiiv.com&amp;utm_medium=newsletter&amp;utm_campaign=the-pre-jobs-report-primer&amp;_bhlid=e33af5294e963eb96c509b5096cfbdbd2ab07dc5">created a platform</a> in a bid to help financial institutions issue fiat-backed tokens and test out their use cases.&nbsp;



Spain-based BBVA has been working within the Visa Tokenized Asset Platform (VTAP) sandbox this year and looks to launch a pilot with certain customers in 2025 on the Ethereum blockchain.



A modified version of this article first appeared in the daily Forward Guidance newsletter. Subscribe <a href="https://blockworks.co/newsletter/forwardguidance">here</a> so you don’t miss tomorrow’s edition.



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Banks to use Swift network for crypto transaction trials

With spot crypto ETFs gaining momentum, many expect the upcoming US election to influence their approval.



The Securities and Exchange Commission’s recent appeal of the court ruling in its case against Ripple Labs could also hinder those types of funds getting the regulatory green light.&nbsp;&nbsp;



Investment firm Bitwise on Tuesday filed for an ETF that would hold Ripple (XRP) directly. Canary Capital appeared to file for a similar product, according to the Delaware corporation website.&nbsp;&nbsp;&nbsp;



Read more: <a href="https://blockworks.co/news/bitwise-files-for-spot-xrp-etf">Bitwise files SEC paperwork to launch spot XRP ETF</a>



The digital asset that powers the XRP Ledger public blockchain, XRP helps facilitate cross-border payments and remittances, Bitwise mentioned in a Tuesday press release. XRP’s market capitalization of roughly $33 billion means it ranks seventh among crypto tokens.



“<a href="https://blockworks.co/tag/bitwise">Bitwise</a>, well known for its crypto expertise, will likely launch this product in the future,” said Neena Mishra, director of ETF research at Zacks Investment Research. “Politics will determine whether this happens soon or in a few years.”



Mishra argued that Bitwise is prepping the product in case Donald Trump wins the presidency. The Republican nominee noted in July that <a href="https://blockworks.co/news/donald-trump-speaks-bitcoin-2024">he would, if elected, fire SEC Chair Gary Gensler</a>.



“If Harris wins and Gensler remains SEC chair, the filing has no chance of approval, despite her recent comments about supporting digital assets,” Mishra told Blockworks.&nbsp;



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



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



<h2 class="wp-block-heading">SEC appeal as potential hurdle</h2>



Bitwise’s filing came just before the SEC decided to appeal Judge Analisa Torres’s decision in its case against Ripple Labs.



Read more: <a href="https://blockworks.co/news/sec-files-ripple-appeal-precedent">SEC files Ripple appeal, cites ‘conflicts’ with Supreme Court precedent</a>



Torres <a href="https://link.mail.beehiiv.com/ss/c/u001.VIz4fB9RgLaqgT0Ji6lSIMhLGx1BG6y6FX8v5LSXYwgZ_W5tvYvea-IfSqLr3nJXpIA3vIAFGNst1MaNWJOYVkNgYFh81sJdpEepU8W-I_OZwBwGUC-1-9q_P2y493vqQ3OdXBaaUWBc9LssQjC2MlR7X2kJas9vwmje0jyemnzy65BoiCO7pcP2PftUDH0clDhOlJWJtLCgQHUMydHJ6pLOWhtWtPudg6pEvM9AcW9H5Jrk3uKodPgwKeJgnu_9gWY81aK542ZEnbx-u7g93Q/48q/qapqBNfASl6k7V9un5nfmQ/h20/h001.aOT8BasaR3Hqz_avf7sKTdYMeSn2lSojohVHULKrCw8">ruled</a> last year that while <a href="https://blockworks.co/tag/ripple">Ripple</a>’s institutional sales of XRP counted as an unregistered securities offering, programmatic sales did not. Then, in August, the court <a href="https://blockworks.co/news/ripple-fined-civil-penalty-sec-lawsuit">ordered</a> Ripple to pay a $125 million penalty — <a href="https://blockworks.co/news/empire-newsletter-ripple-sec-legal-battle">far below</a> the $2 billion the SEC had sought.



While we know the <a href="https://blockworks.co/tag/sec">SEC</a> has 240 days to approve or deny the Bitwise XRP ETF from the date it publishes the plans in the federal register, the timeline around the steps following the regulator’s appeal remain unclear.&nbsp;



Either way, industry watchers have signaled the agency’s action would delay clarity on XRP’s status, possibly impacting planned ETFs that hold the asset.&nbsp;



Alex Thorn, head of research at Galaxy Digital noted in a Tuesday <a href="https://x.com/intangiblecoins/status/1841214766607384582">X post</a> that the likelihood of Bitwise’s XRP ETF “succeeding” would drop to “near zero” if the SEC chose to appeal.&nbsp;



Bitwise’s planned XRP ETF is the latest planned US fund that would hold a crypto asset directly.&nbsp;&nbsp;



Spot bitcoin and ether ETFs hit US exchanges in January and July, respectively. VanEck and 21Shares have also <a href="https://blockworks.co/news/how-us-canada-solana-fund-filings-differ">revealed plans to launch spot solana funds</a>.&nbsp;



Some segment observers previously told Blockworks that spot crypto ETF approvals by the SEC — outside of BTC and ETH — might be tough given the precedent of the regulator wanting to first see a regulated futures market. None exist for XRP or solana.



But the plans laid out from Bitwise and Canary seem to advance the growing perception that the US crypto regulatory winds are changing.&nbsp;



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



A modified version of this article first appeared in yesterday’s Forward Guidance newsletter. Subscribe <a href="https://blockworks.co/newsletter/forwardguidance">here</a> so you don’t miss tomorrow’s edition.



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