Kambria

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

Katherine Ross

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>.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



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

Ben Strack

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

Donovan Choy

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?

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>.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



<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

Jack Kubinec

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<hr class="wp-block-separator has-alpha-channel-opacity"/>



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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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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Election outcome and SEC appeal to decide XRP ETF future

Felix Jauvin

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<h2 class="wp-block-heading">Digging into the data ahead of tomorrow’s big jobs report</h2>



In recent months, the balance of risks has shifted from fears about getting a handle on inflation to concerns around whether the Fed is late to the game, and how this ongoing growth slowdown may evolve into an outright recession.&nbsp;



Paired with that comes the market’s shift from caring about CPI prints to caring about employment data prints. With tomorrow’s important jobs report being a key macro driver at this stage of the business cycle, let’s dig into some of the data.



<h3 class="wp-block-heading">Labor market data signals resilience</h3>



After falling for multiple months, the job vacancy rate ticked up from 4.6% to 4.8%. This implies there were more jobs available than the previous month. And when considering a classic Beveridge curve type of analysis that compares job vacancy to unemployment rate, there is effectively a lower risk of an accelerating unemployment rate compared to the month before.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXc5wXtSKdyP3LIFJCYdCPZ4trPB2v1abGwL4rQIq9gq37mwL0oaIHCPbfW3u-BLV9rF-B2qGdHqP4KYVCDNUvfs8T2FNupdbrVaC4G_pDwGo86KXdfFrettW5mHREyg8XLkrBmvt0y0iJAvTTgGdFQ3LdE?key=hG3C0lldV5B70LcDHroRWg" alt=""/></figure>



But despite a solid JOLTS report in terms of the job openings, the quit rate headed lower — implying employees are not as confident as they were to leave their current job in the hopes of finding something better-paying. This provides a key cap on the amount of wage growth the labor market is experiencing, as it’s typically through job-switching that the largest wage growth impulses occur.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXeaETMGFfY-1_RFQdB32XWkrPjYLAYkl9EfL5EaNoHBx7x2bE5ZHa47A7LVlhQpl0NPDYDle01W3-P2aoJes-TgphObKswkjcwXCaVmYItfwVXdu_B8dtV25ccW4r8fUIwqcZlVOImR079Ydu6jjswx2nM3?key=hG3C0lldV5B70LcDHroRWg" alt=""/></figure>



Despite an upside surprise today in initial jobless claims of 225,000 (vs. the forecasted 220,000), the four-week average of jobless claims has been in a steady downtrend and hit its lowest level since June.



The previous three weeks were also downside surprises on jobless claims, which paints a high-frequency picture of a somewhat neutral labor market.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdXM7Mk6OdwWTaR1wU5SjMwm0krUPAjzdsJ4yoSr1g0VlpreoZE2nxHfQ2fJA-gHNXz2MyMlExAuPQ8_qdHye9LGFp2jvkE2l7ndu_EtGy8VIUf8Hu-30IwQIkjphsGH0x3fCUdKVntffZcJrpeaKPPXnc?key=hG3C0lldV5B70LcDHroRWg" alt=""/></figure>



Finally, the ADP employment change blew past expectations of 120,000 and printed at 143,000 — up from the prior month’s 103,000.



The ADP print is a solid gauge of what to expect in the upcoming jobs report. With such a huge upside surprise, it removes a lot of the tail risk behind potential negative outcomes tomorrow.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdbcEFwNG1_fWRpYIf71jDM4Gt093Ou-UPEcgMNmOGKvWH4IeLSfF_vtIq-xPYWFi_hzatl6Ot1I7utYMQpEGf8wZUqzPRt4gUXkOnSAVPzbLzwY9obh899fPLRVtV2XaCQa3tsJ6QOrQxB5ketY0UVtdnU?key=hG3C0lldV5B70LcDHroRWg" alt=""/></figure>



<h3 class="wp-block-heading">Growth outlook looks decent</h3>



This morning, we received the ISM Services PMI. That came in significantly above expectations of 51.7, printing a 54.9. This is the highest print in over a year and an incredibly prescient indication that growth in the economy remains solid.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcBYxCYRU-ca9VlvkH8HzJnq8592aW_J2W1e9w8wc6EMsj8pLV6ULNBm29vWkID0Fv16Htw8wuaD2YXfTECFk5WB51EI2oMT_BwwfqWLGPIcHhWMoqiDgVmd9KMlw-jhPWjk7RvPRvZ-0OwHDCg1nY_DQ5n?key=hG3C0lldV5B70LcDHroRWg" alt=""/></figure>



Bringing all these data points together, let’s now look at the economic surprise index:<img loading="lazy" decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcbdHBjsEYtc6iBvc8VQmv8gS0vEF_04npoaVNKehHjD4j7PyFmSdvuyJTfWEDYPoRoi6Z89_JkDMcdk1lm0BV5tJz_O7RcWy2s77Q0T5PelYPrdoMHAHGfnctEMBYIGD7NV-uBVYB6AfkObd6G8V3y62kG?key=hG3C0lldV5B70LcDHroRWg" width="624" height="351">



After a huge move downward — implying worse-than-forecasted economic data prints — we have now reversed back into positive territory. What that leaves us with on the eve of the most important jobs report of our lifetime (until the next one comes out, of course), is that the economy is surprisingly resilient. Based on the higher frequency labor market data that’s come out this week, the jobs report tomorrow will probably be fine.&nbsp;



— Felix Jauvin



<h3 class="wp-block-heading">1&nbsp;</h3>



The number of equal-weight S&amp;P 500 sectors that outperformed their market cap-weighted counterparts during the first three quarters of the year. The sector in question was real estate.&nbsp;



Why does this matter? It shows us it&#8217;s not just tech leading the market cap S&amp;P to new heights this year.&nbsp;



The equal weight S&amp;P 500 index is up just over 12% in 2024, while the market cap-weighted version has gained close to 20% since the start of the year.&nbsp;



<h2 class="wp-block-heading">Did Grewal sell out?&nbsp;</h2>



The head of the SEC’s enforcement division will be <a href="https://blockworks.co/news/sec-enforcement-director-departure">departing the agency</a> next week.&nbsp;



Gurbir Grewal, who has led the US securities regulator’s enforcement operations since July 2021, joined the agency just months after Gary Gensler was sworn in as chair.&nbsp;



Crypto-related enforcement actions, which had been on the rise before Grewal and Gensler took over, were a significant part of Grewal’s tenure.&nbsp;



Under Grewal’s leadership, the agency issued 35 crypto enforcement actions in 2022 and 40 in 2023. Plus, the division of enforcement almost <a href="https://www.sec.gov/newsroom/press-releases/2022-78">doubled</a> its crypto assets and cyber unit in May 2022, bringing the team’s headcount to 50.&nbsp;



In 2024 (as of Sept. 6), the agency had brought 18 crypto enforcement <a href="https://www.sec.gov/securities-topics/crypto-assets#account">actions</a>.



Most notably, the agency’s cases against <a href="https://blockworks.co/news/judge-rules-against-coinbase-sec-dismissal">Coinbase</a>, <a href="https://www.sec.gov/newsroom/press-releases/2023-101">Binance</a>, <a href="https://www.sec.gov/newsroom/press-releases/2023-237">Kraken</a> and <a href="https://www.sec.gov/newsroom/press-releases/2024-79">Consensys</a> were all brought under Grewal. Each suit has, in part, addressed token classification — a major theme under the Gensler/Grewal regime. The SEC also launched and closed its so-called <a href="https://blockworks.co/news/consensys-files-lawsuit-against-sec">“Ethereum 2.0”</a> investigation under Grewal.&nbsp;



The agency, during Grewal’s tenure, has also shown significant increase in <a href="https://www.sec.gov/enforcement-litigation/administrative-proceedings/33-11305-s">NFTs</a>, which the SEC generally considers to <a href="https://blockworks.co/news/flyfish-settlement-sec-nfts">be securities</a>.&nbsp;



Gensler has plenty of time left in his term, so I don’t expect we’ll see a huge change in enforcement patterns under the next director. The current deputy director of the division, Sanjay Wadhwa, will step in as acting director starting Oct. 11. The SEC declined to comment on who will take over the role permanently.&nbsp;



If I had to bet, I’d say Grewal’s headed to the private sector, but we will just have to wait and see.&nbsp;



— Casey Wagner



<h2 class="wp-block-heading">Banks get set to use Swift for new transaction trials&nbsp;</h2>



It looks like we could see another big step forward on the crypto transaction front as banks get set for trials on a system powering billions of money transfers.



Financial institutions will be able to soon use Swift’s platform to test out the settlement of “digital assets and currencies,” the organization said Thursday.&nbsp;



These pilot transactions are set to start next year.&nbsp;



A quick reminder for those in need: 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.



Swift Chief Innovation Officer Tom Zschach put it simply in a statement: &#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.”



The upcoming pilots were born from ample prior experimentation.&nbsp;



Swift <a href="https://blockworks.co/news/swift-says-it-can-resolve-a-major-obstacle-to-cbdc-adoption">claimed</a> in 2022 it had successfully shown that 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</a> with Chainlink and finance giants such as BNP Paribas and BNY Mellon (tests it ultimately deemed <a href="https://blockworks.co/news/swift-tests-chainlink-ccip">successful</a>).



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 tokenization 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 TradFi systems.



Visa and Mastercard said in May they would join banks like JPMorgan and Citigroup to test this so-called Regulated Settlement Network. Colin Butler, Polygon’s global head of institutional capital, said these entities getting closer to aligning on a standard represents “the 5-yard line for mass institutional adoption.”



While only time will tell what exactly we learn from these future trials, the prospect of financial institutions having a single point of access to digital asset classes and tokens appears bullish.&nbsp;



— Ben Strack&nbsp;



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



<ul class="wp-block-list">
<li>Payments giant Visa has <a href="https://blockworks.co/news/visa-to-help-banks-test-tokenized-assets-smart-contracts">created a platform</a> to try to help financial institutions issue fiat-backed tokens and test out their use cases. Spain-based BBVA has been working within the Visa Tokenized Asset Platform (VTAP) sandbox this year and looks to launch an initial pilot with select customers in 2025 on the Ethereum blockchain.</li>



<li>A CFTC subcommittee voted to pass recommendations related to policies to support the use of blockchain for non-cash collateral, Bloomberg <a href="https://www.bloomberg.com/news/articles/2024-10-02/use-of-blackrock-tokens-as-collateral-moves-closer-to-mainstream">reported</a>, citing unnamed sources “familiar with the matter.” The Global Markets Advisory Committee will now consider the recommendations and is expected to vote later this year. Such approval could make it easier for institutions to accept tokenized assets as collateral.</li>



<li>Grayscale Investments launched an Aave trust Thursday after introducing an XRP trust last month. The crypto-focused asset manager has been on a product-launching kick this year, also debuting trusts holding bittensor (TAO), sui (SUI), maker (MKR) and avalanche (AVAX) in August.</li>
</ul>



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What is the labor market signaling? Checking the data before tomorrow’s jobs report

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Whenever a big name in the financial world saunters into blockchain, a healthy dose of skepticism is warranted. Institutional blockchain initiatives can oftentimes be more about firms saying they’re doing something than about actually doing something.



One initiative that I’ve been trying to tease apart the seriousness of is the “finternet,” a forward-looking financial system being championed by some of the contributors to India’s UPI digital money system.



The Bank for International Settlements penned a <a href="https://www.bis.org/publ/work1178.htm">paper</a> with the financial magnate Nandan Nilekani, who co-founded India’s sixth-largest company by market cap, about the finternet in April of this year. Since then, the team has been on the talk circuit.&nbsp;



In late August, Nilekani and Siddharth Shetty, who was formerly an advisor to the Indian Ministry of Finance, <a href="https://x.com/solana/status/1828779943880433806">demoed</a> the finternet in a talk at Global Fintech Fest. In the demo, the Indian businessman shows off the finternet sending 2,000 rupees and settling the transaction on Solana.



Then last month at Solana Breakpoint, Shetty gave a talk about the finternet which admittedly was a bit of crypto word salad, but he did get into the idea of assets being tokenized on multiple interoperable financial ledgers — that is, building the economy on blockchain rails instead of traditional financial rails.



The finternet is in its very early stages, one person who helped work on the demo told me. And the finternet team, obviously, is not the first to have the idea of moving economic activity onchain. But what interests me is the names involved — and what they imply about the potential stakes for a project that’s integrated itself with Solana.



Nilekani’s Infosys IT company is worth $94 billion, and he and Shetty were involved in building India’s Unified Payments Interface, or UPI, the Solana Foundation and Shetty have said. The Indian government rolled out UPI in 2016 as part of a broader digitization movement in the country. It’s a quite ambitious, albeit offchain, digital payments program that <a href="https://economictimes.indiatimes.com/tech/technology/total-upi-transactions-cross-100-billion-mark-in-2023/articleshow/106492917.cms?from=mdr">processed</a> over 100 billion transactions between Indians in 2023.&nbsp;



The finternet is wholly distinct from UPI, according to multiple people I spoke to. It’s more about unifying the financial system across asset types and geographies.



The Solana Foundation and Superteam India — a Solana community organization — are both listed as contributors to the finternet sandbox.&nbsp;



At the end of the day, maybe the finternet project won’t turn out to be much. But when we talk about large institutional projects involving Solana — the Visas, PayPals, and Stripes of the world — perhaps it’s worth throwing the finternet in there as well.



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Indian tech magnate teases Solana-built ‘finternet’ for an economy onchain

Macauley Peterson

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<h2 class="wp-block-heading">New tech for cross-chain interoperability</h2>



Several teams are making strides to enhance the crypto developer experience, offering advanced tech stacks with the ultimate goal of simplifying the onboarding experience for new users.



OKX has launched <a href="https://www.okx.com/web3/build/docs/waas/okx-waas-what-is-waas">OKX OS</a>, an open-source infrastructure suite of tools, SDKs and APIs needed to build applications across a wide range of blockchains, including Ethereum, Bitcoin and Solana.



This new stack allows developers to leverage the same technology that powers the OKX Wallet, and aims to simplify and scale development for 100+ chains, the company announced Monday.



Another new path toward an omnichain user experience is Axelar’s Mobius Development Stack (MDS).



The tech stack, unveiled today, is offered as vendor-agnostic architecture integrated into popular OpenZeppelin libraries.



Axelar’s MDS also marks the mainnet debut of its <a href="https://blockworks.co/news/axelar-interchain-amplifier-liquidity-flow">Interchain Amplifier</a> for permissionless cross-chain connections at the smart-contract layer. The Interchain Amplifier is secured by staked AXL, or restaked assets like ether and bitcoin.



This approach places cross-chain interoperability front and center, spanning diverse L1s including Solana, Stellar and XRP Ledger — without requiring bridges. But it also offers a way to connect off-chain resources, like zk or AI co-processors.



Features such as the Interchain Token Service (ITS) facilitate native cross-chain tokens, with use cases such as tokenizing real-world assets, enhancing liquidity and enabling fractional ownership across different chains.



According to Axelar co-founder Georgios Vlachos, MDS is “empowering developers to build decentralized applications that compose resources, logic, value and network effects freely across a truly global internet landscape.”



OKX and Axelar’s recent launches tie into a broader trend in the Web3 space around improving developer experiences and user onboarding through enhanced infrastructure.&nbsp;



W3.io, launched in September, is building the Orchestration Cloud, an industry utility that aims to bring the benefits of an orchestration layer — long proven in Web2 environments — into Web3.



Backed by an impressive cadre of crypto builders, W3 functions like an advanced oracle and is designed to string together multiple services to support complex transactions across Web3.



Similar to Axelar’s MDS, W3 also looks to enable developers to build applications that not only function efficiently across blockchains but also integrate off-chain resources.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcToQY7_SakDzRyUKygy3d_AQijjwiL6esFBGyQJ57Xkq5oiN36qtvXxjZwiTAJEmPNpgy_1NEtclysGh4TvyQQZNXDD0vyNON_W1qNLYE77lAv4i38DZvER8o8z8Y8aT1PVIN83oA9TAXyHguKu0W1WJo?key=Fg21ruo8oQ1_UB1OqbE92Q" alt=""/></figure>



W3.io can simplify the process of coordinating multiple actions, according to Scott Dykstra, co-founder and CTO at Space and Time.



“The challenge that developers have right now is stringing together a bunch of different services to accomplish very complex onchain tasks,” Dykstra told Blockworks.



For example, it could help a game manage steps such as tracking player achievements, minting NFTs and updating the game server with new data. W3.io acts as middleware that connects off-chain and onchain actions seamlessly.



Together, these technologies point to the creation of a holistic ecosystem where developers can build decentralized applications that are interoperable, scalable and easier to use across the entire Web3 space.



— Macauley Peterson



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



Base increases gas limits:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXea8tr69lP15mz3TFA5mEbokMlkeyL2I98nJadL-FUGz8gKZ_aDW-Pxx0d2Q0RPp6HujPaCMkVjW9JrUUvav16lFCnp0bCsKTSjoSipY6UbhY8fHrP3IBOprgzaTqonOaT_Rzaoa7gkz5lss1-VsfHxE7c?key=Fg21ruo8oQ1_UB1OqbE92Q" alt=""/><figcaption class="wp-element-caption">Source: <a href="https://x.com/base/status/1838639094995521831">Base</a></figcaption></figure>



In pursuit of scalability, Base continues to ramp up gas limits per block. 1 Megagas/s per block will be added weekly, with this week’s increment going from 11 to 12 Megagas/s. Base’s stated goal is to reach 1 Gigagas/s capacity eventually.



L2s drastically increasing gas limits have some subtle, but far-reaching implications for Ethereum’s grand roadmap. As explained on <a href="https://youtu.be/yvP39-EOADU">The Rollup podcast</a> by Justin Drake, raising gas limits reduces the baseline profitability accrued from priority transaction fees paid by users, which in turn increases the dependency on centralized sequencer profits (MEV).



Since MEV profits for L2s outweigh transaction fee profits, this may ultimately reduce the incentive for L2s to decentralize its sequencer and enter into a multichain-like shared sequencer arrangement, sometimes referred to in Ethereum research circles as “synchronized composability.”



— Donovan Choy



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OKX and Axelar launch tech development stacks

Hold your horses, the battle between the Securities and Exchange Commission and Ripple isn’t quite over yet.



Yesterday, the SEC filed to appeal the <a href="https://blockworks.co/news/ripple-fined-civil-penalty-sec-lawsuit">$125 million judgment</a> in its case against Ripple.&nbsp;



The case, which is now as old as a human toddler — with its four-year anniversary coming up in December — has been a long and hard-fought court case between the two parties.



Both the SEC and Ripple had until Oct. 7 to decide if they were going to pursue an appeal.&nbsp;



An SEC spokesperson told Blockworks that it filed the appeal because it believes the decision “conflicts with decades of Supreme Court precedent and securities laws.”&nbsp;



Read more: <a href="https://blockworks.co/news/sec-enforcement-director-departure">SEC’s enforcement director announces departure&nbsp;</a>



While there are a lot of unknowns about what the appeal will look like, one thing’s for certain: The appeal will not only draw out the process, but also could have some implications beyond just <a href="https://blockworks.co/tag/ripple">Ripple</a> and the <a href="http://v">SEC</a>.



It could, for example, dampen the hopes for a potential Bitwise XRP ETF. The <a href="https://blockworks.co/news/bitwise-files-for-spot-xrp-etf">firm filed its registration statement</a> for a potential ETF on Wednesday. Galaxy Digital’s Alex Thorn warned that the likelihood of success from <a href="https://blockworks.co/tag/bitwise">Bitwise</a> “drops to near zero” with an appeal.



<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">SEC has until next week (Oct. 7) to appeal Judge Torres’ July 2023 ruling (which held that secondary sales of XRP through exchanges were not securities) likelihood of this ETF filing succeeding drops to near zero if they do appeal (i’ll be very surprised if they don’t appeal) <a href="https://t.co/FBGVZPNvwV">https://t.co/FBGVZPNvwV</a>&mdash; Alex Thorn (@intangiblecoins) <a href="https://twitter.com/intangiblecoins/status/1841214766607384582?ref_src=twsrc%5Etfw">October 1, 2024</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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Ripple and the SEC both notched wins and suffered some losses throughout the years.&nbsp;



In July of last year, Judge Torres <a href="https://blockworks.co/news/judge-rules-ripple-xrp-not-security">handed the two parties</a> the biggest decision yet: Ripple’s programmatic sales of XRP didn’t constitute investment contracts. However, the double-edged sword was that Torres ruled the institutional sales did.



“The vast majority of individuals who purchased XRP from digital asset exchanges did not invest their money in Ripple at all. An Institutional Buyer knowingly purchased XRP directly from Ripple pursuant to a contract, but the economic reality is that a Programmatic Buyer stood in the same shoes as a secondary market purchaser who did not know to whom or what it was paying its money,” she wrote at the time.&nbsp;



At the time, the SEC sought to file an interlocutory appeal on the decision but was later denied.&nbsp;



And now we’re here. It’s not a huge surprise that the SEC would appeal. After all, they didn’t necessarily win on the final judgment. Though, one could also argue that Ripple didn’t either. And <a href="https://blockworks.co/news/empire-newsletter-ripple-sec-legal-battle">lawyers we spoke to after the decision</a> said they wouldn’t be surprised if an appeal was filed.



Basically, the SEC sought an <a href="https://blockworks.co/news/sec-wants-multi-billion-sum-from-ripple">eye-watering sum of $2 billion</a> in the final judgment. Ripple, on the other hand, wanted a <a href="https://blockworks.co/news/ripple-counters-sec-penalties">far lower sum of $10 million</a>. In the end, Torres announced that Ripple would pay $125 million. It’s fair to say the sum falls closer to what Ripple wanted rather than the multi-billion dollar sum the SEC wanted.



Ripple’s Chief Legal Officer Stuart Alderoty was also not surprised, calling the appeal filing “disappointing.”&nbsp;



“The Court already rejected the SEC’s suggestion that Ripple acted recklessly, and there were no allegations of fraud and, of course, there were no victims or losses,” he added.&nbsp;



<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">(1) The SEC&#39;s decision to appeal is disappointing, but not surprising. This just prolongs what&#39;s already a complete embarrassment for the agency. The Court already rejected the SEC’s suggestion that Ripple acted recklessly, and there were no allegations of fraud and, of course,… <a href="https://t.co/PQozMMtthf">https://t.co/PQozMMtthf</a>&mdash; Stuart Alderoty (@s_alderoty) <a href="https://twitter.com/s_alderoty/status/1841596012588114116?ref_src=twsrc%5Etfw">October 2, 2024</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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CEO Brad Garlinghouse <a href="https://x.com/bgarlinghouse">reiterated</a> that Ripple will continue to fight. He didn’t mince words about the appeal.&nbsp;



“If Gensler and the SEC were rational, they would have moved on from this case long ago. It certainly hasn’t protected investors and instead has damaged the credibility and reputation of the SEC,” Garlinghouse said. “Somehow, they still haven&#8217;t gotten the message: They lost on everything that matters. Ripple, the crypto industry, and the rule of law have already prevailed.”



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