Solana Reaches New Stablecoin Volume Record In January

Robinhood and Revolut are reportedly exploring the possibility of entering the stablecoin market, aiming to challenge significant dominance held by Tether. Thus far, neither company has made any formal announcements, and no representatives have commented publicly.

The timing seems advantageous, as Robinhood and Revolut are not the only notable firms investigating stablecoins. On Thursday, Ethena Labs introduced a new stablecoin backed by the BlackRock USD Institutional Digital Liquidity Fund (BUIDL). This stablecoin aims to mirror the stability of traditional options by linking its value to BUIDL, which consists of US dollars, short-term US Treasury bills, and repurchase agreements.

Competition Heating Up

The interest in stablecoins is largely driven by the upcoming MiCA regulations in the EU, which will impose strict rules on this market. While Circle has the necessary licensing to operate in the EU, it has not posed a serious challenge to Tether in over two years. Should Tether fail to comply, the EU market would present a prime opportunity for new entrants, particularly for major players like Robinhood and Revolut.

Thomas Eichenberger, Chief Product Officer at Sygnum, remarked on the appeal of the business models seen with companies like Circle and Tether, suggesting many may seek to replicate their success. Bloomberg highlighted that Tether employed about 100 people while generating $5.2 billion in profit this year, making it a significant player in terms of assets under management.

Global Expansion

The stablecoin market is expanding globally, especially in emerging economies, where an increasing number of users are utilizing them for savings or everyday transactions. Their role in helping users navigate US sanctions has also drawn considerable interest.

Even before the specific opportunities presented by MiCA, investors have been keen to disrupt the duopoly held by Tether and Circle. PayPal introduced its own stablecoin last year with this aim and is nearing a valuation of $1 billion, though the total assets of Tether stand at nearly $120 billion. If the EU market becomes available for competition, numerous challengers are expected to emerge.

As of September 26th, Solana leads in positive net flows, surpassing all other chains with a total of $1.0 billion over the past three months. It recorded the third-highest inflow at $1.5 billion and the seventh-highest outflow at $458.5 million, resulting in an overall positive net flow.

Data aggregator Artemis.xyz indicates that while Solana excels in net flows, Ethereum has the worst performance, showing a negative net flow of $871 million. 

Peak Net Flow

While Solana has topped the net flows list on at least seven occasions in the last three months, the peak net flow of $655.1 million occurred on September 12th. The altcoin led the list three times in July, twice in August, and matched its August performance in September, breaking the billion-dollar threshold.

The data further reveals that despite leading in both inflows and outflows, Ethereum underperformed overall. Arbitrum, which also reached the top a few times in the past three months, ranked second worst with a net flow of -$492.7 million, placing second in inflows ($3 billion) and outflows ($3.5 billion).

Still Struggling

Charts by Artemis illustrate that Bitcoin (BTC) and Binance (BNB) also struggled in various metrics. Bitcoin ranked tenth in inflows with $96.7 million, while Binance followed closely at eleventh with $96 million. In terms of outflows, Bitcoin held the eleventh position at $208.5 million, with Binance at fourteenth with $77.2 million.

Despite this, Binance slightly outperformed Bitcoin in net flows, achieving a positive net flow of $18.7 million in ninth place compared to Bitcoin's negative net flow of -$111.8 million in tenth. Further analysis of Artemis data indicates that Bitcoin managed to reach the top position only once in the last three months, recording a second-highest positive net flow of $6.6 million on August 24th.

Authorities in Dagestan, a republic of Russia, are stepping up efforts to eliminate illegal underground cryptocurrency mining operations, attributing regional power outages and electricity theft to these activities. Amid ongoing electricity shortages, local officials are urging law enforcement to increase actions against these covert setups.

A Tricky Operation

Recent reports revealed the discovery of multiple hidden crypto mining facilities. The Dagestan Prime Minister, Abdulmuslim Abdulmuslimov, has called for stricter measures, highlighting that miners are constantly innovating ways to conceal their operations. During a recent meeting, he mentioned that several unregistered mining farms have been located in underground caverns, making them more challenging to identify.

Footage was shown of a clandestine operation in the Sergokalinsky district, where a small opening at ground level led to a cavern containing over 15 mining machines cooled by fans. Abdulmuslimov pointed out that this was just one of many similar sites, noting that miners are increasingly using mobile installations to facilitate relocation.

The Legal Way

To regulate the sector, Russia has recently legalized cryptocurrency mining. In August 2024, President Vladimir Putin enacted a law granting legal status to the industry, which will take effect on November 1st, 2024. This legislation allows registered companies and individuals to mine legally, granting exclusive rights to registered miners, while those below government-set energy consumption limits can mine without registration.

However, Dagestan remains a hotspot for illegal crypto mining, with ongoing crackdowns on electricity theft. Reports indicate a rise in police raids in the region since late 2023, and Dagestan is believed to have the highest incidence of electricity theft related to mining in the country. Authorities suspect that these operations are responsible for significant electrical issues, including a recent fire at a substation that left parts of the area without power for several days.

Visa has officially launched a new platform designed to help financial institutions issue fiat-backed tokens and explore their applications. This initiative aims to establish global standards that enhance collaboration among financial entities in the blockchain space.

Cuy Sheffield, the Head of Crypto for the company, noted the growing trend of tokenizing real assets, such as real estate and debt securities, which is driving the need to integrate money into blockchain platforms for trading.

Previously, the global payment giant joined forces with Transak, a Web3 infrastructure provider, to unveil a solution for cryptocurrency withdrawals and payments through Visa Direct.

Renewed Interest

Visa has been monitoring renewed interest by central banks in tokenization and its capacity to modernize financial systems. The company has already piloted projects with HSBC and Hang Seng Bank as part of the Digital Hong Kong Dollar initiative, and is involved in a pilot for the digital real with the Central Bank of Brazil.

Banco Bilbao Vizcaya Argentaria (BBVA) in Spain is actively engaged with the new Visa Tokenized Asset Platform (VTAP). The bank is testing the issuance, transfer, and redemption of a bank token on a trial blockchain, aiming to launch an initial pilot project with select customers in 2025 using the Ethereum blockchain.

Facilitating Real-Time Transfers

Among the various applications for banks is the ability to facilitate real-time money transfers between their clients. Catherine Gu, who leads CBDC and tokenized assets at Visa, pointed out that cross-border transactions are particularly significant for banks, especially for multinational corporations that require around-the-clock money movement.

Sheffield anticipates that engagement with tokenized real-world assets could significantly influence market demand. For instance, a bank might enable its customers to use a fiat-backed token to buy tokenized commodities or Treasury securities with immediate settlement.

In any case, through the Visa Tokenized Asset Platform, the payments giant aims to foster the development of standards that ensure interoperability among financial institutions.

U.S. Congressman Tom Emmer has directly criticized SEC Chair Gary Gensler, calling him the most destructive and lawless chair in the history of the regulatory agency. As the upcoming Presidential Election looms, Kamala Harris insists on keeping Gensler where he is whereas Donald Trump has explicitly stated he plans to fire Gensler immediately if he wins.

A Shaky Foundation

Emmer accused Gensler of inventing the term crypto asset security without providing any regulatory clarity, which has fueled enforcement efforts by the SEC against the crypto industry for three years. Last week, the SEC retracted the term in a court footnote.

Emmer also challenged Gensler on the mishandling of the Debt Box case, where the SEC sued a crypto startup for an alleged $50 million fraud, resulting in a dismissal and a $1.8 million fee against the SEC. Gensler admitted the case was poorly handled. Mark Cuban outright called Gensler a blight and that his departure will greatly contribute to local GDP growth.

Fighting Back

SEC Commissioner Hester Peirce also criticized the agency for taking too long to retract the aforementioned term, suggesting that it should have acknowledged earlier that crypto tokens are not securities. She indicated that while congressional input on definitions would be helpful, the SEC could have provided guidance itself.

Despite calls by 42 lawmakers to revoke the SEC Staff Accounting Bulletin No. 121, which requires companies holding crypto to list it as a liability, Gensler confirmed it would stay in place, arguing it helps companies understand risks. Rep. Wiley Nickel countered that this rule could hinder banks and their ability to custody crypto products, creating greater risk by shifting control to non-bank entities.

Riot Platforms has ended its attempt to acquire Bitfarms, settling instead for a 19.9% ownership stake as both companies redirect their focus to their own strategies following the agreement. This settlement, announced on September 23rd, 2024, means Riot will not pursue an immediate acquisition.

The Calm Before The Storm

As part of the deal, Riot has retracted its request for a special meeting of Bitfarms shareholders. In exchange, Bitfarms has implemented several board-level changes to support its ongoing strategic review. Notably, Amy Freedman has been appointed to the Board, taking over for Andrés Finkielsztain, who has resigned. Freedman, recognized for her expertise in corporate governance, will actively participate in the Bitfarms Governance and Nominating Committee and Compensation Committee, and may also join special committees of independent directors as needed.

The interest by Riot Platforms in Bitfarms has been closely watched since its unsolicited $950 million acquisition proposal in May, followed by increased share purchases. In response, Bitfarms adopted a shareholder rights plan, often referred to as a poison pill, on June 20th, preventing any entity, including Riot, when it came to acquiring over 15% of company shares before a specified deadline. This strategy was aimed at safeguarding shareholder interests while considering other potential strategic options like mergers or sales.

Wait And See

Concerns arose within Bitfarms regarding Riot, particularly among its Special Committee of Independent Directors. They contended that the ongoing share acquisitions could jeopardize the integrity of the strategic review process which Bitfarms had meticulously crafted, arguing that Riot was undervaluing the company. This led the committee to adopt defensive measures to protect shareholder value.

Although the settlement has taken place, Riot continues to hold a significant stake in Bitfarms and may reevaluate its position in the future. According to its early warning report, Riot could present new proposals based on how Bitfarms performs as well as broader market conditions. For the time being, both companies are concentrating on their respective strategies and have seemingly established a temporary truce.

Caroline Ellison has often played a supporting role in both business and her personal life. About three years ago, the talented mathematician became co-CEO of the crypto trading firm Alameda Research, sharing the position with Sam Trabucco before eventually taking over completely.

Prior to this, she established herself within the inner circle of FTX, the sister exchange to Alameda, solidifying her status as a loyal deputy and confidante to its infamous founder and CEO, Sam Bankman-Fried.

Quite The Entanglement

Ellison will be in the spotlight at a federal court in Manhattan, where she is set to be sentenced for her involvement in the multi-billion-dollar collapse of FTX. Bankman-Fried received a 25-year prison term for his crimes and has since filed an appeal.

Caroline, now 29 years old, served as the former co-CEO of Alameda Research, a firm she joined in 2017. For several years, she was also in an intermittent romantic relationship with Sam Bankman-Fried, who oversaw FTX. In the wake of the FTX collapse in 2022, Ellison was dismissed regarding her position at Alameda and subsequently became a key witness in the criminal proceedings against Bankman-Fried.

Some Leeway
Ellison has had her sentencing scheduled for the U.S. District Court in Manhattan on Tuesday, September 24th, at 03:00 PM ET. Ellison pleaded guilty to two counts of wire fraud and conspiracy to commit wire fraud, along with one count each of conspiracy to commit money laundering, commodities fraud, and securities fraud. These charges could carry a maximum combined sentence of 110 years.
Although she could face a lengthy prison term, it is unlikely she would serve the maximum. Entering a plea deal with federal prosecutors in 2022, Ellison agreed to testify against Bankman-Fried in exchange for leniency. Her defense team has requested a supervised release without incarceration. Federal prosecutors have not specified a recommended sentence, praising her cooperation as substantial and exemplary.

Additionally, many in the crypto trading community are betting on a light sentence for Ellison, with a significant percentage predicting she will avoid prison altogether.

As October approaches, often dubbed Uptober in the cryptocurrency community, investor enthusiasm is palpable, particularly regarding the meme coin market. Three lesser-known contenders are capturing attention for their potential to rise significantly, Pepe Unchained (PEPU), Catizen (CATI), and DOGS (DOGS).

Competing With Ethereum

Pepe Unchained is currently developing a Layer-2 network tailored for meme coins, which aims to deliver faster transaction speeds and lower fees compared to Ethereum. The project has already seen success in its presale, raising over $14.7 million and offering impressive staking rewards for early investors, suggesting robust demand for its offerings.

Catizen, trading at $0.76 with a market cap of $231 million, stands out by integrating gaming and social features on the TON blockchain. Users can engage in managing virtual cat cafes and earn vKITTY tokens, making the platform both entertaining and rewarding. The recent launch of CATI on major exchanges like Binance has further fueled excitement and speculation about its future growth.

Letting The DOGS Out

Meanwhile, DOGS, currently priced at $0.00085, has emerged as the fifth most traded meme coin worldwide, with an impressive trading volume of $213 million just yesterday. The success of its August airdrop, which reached over 42 million wallets, highlights its expanding user base. The team behind DOGS has hinted at plans for tradable meme stickers and additional crypto rewards, reinforcing its community-first approach.

With all three coins demonstrating unique features and promising developments, they could be well-positioned for notable activity as Uptober unfolds, attracting the interest of both seasoned investors and newcomers alike.

Solana Breakpoint Day One kicked off with multiple significant announcements, including Firedancer, key updates by Jupiter, and Franklin Templeton revealing plans for a mutual fund on Solana. Day Two maintained the excitement with more major developments.

Key Details
Coinbase announced it will launch its wrapped Bitcoin version, cbBTC, on Solana. This addition aims to enhance liquidity and capital efficiency across DeFi applications. Following its impressive Day One, Firedancer announced its full validator client is now live on the Solana mainnet for non-vote transactions. A live demo showcased its ability to handle 1.04 million transactions per second.
Magic Eden also shared plans for new features, including the ability to swap fungible assets across different chains, and confirmed its upcoming $ME token will launch on Solana. Meanwhile, co-founder Alex Smirnov announced the highly anticipated $DBR token will go live on October 17th, along with new product features like gasless bridging. BONK, a beloved meme coin, also announced its growth and plans for a BONK ETP, indicating a possible future BONK ETF.

Other Notable Updates
Sanctum introduced Creator Coins for monetizing audiences, announced a new Sanctum card for real-world payments, and teased the return of its Wonderland incentives campaign. Pyth Network unveiled OIS (Oracle Integrity Staking) to enhance data accuracy and reward $PYTH stakers through various DeFi products.
Kamino Finance announced plans for Spot Leverage trading, with founder Marius Ciubotariu emphasizing its appeal to institutional investors. The event concluded with engaging debates on crypto trends and the future of the Solana Foundation. Dan Albert announced that planning for Solana Breakpoint 2025 is underway, set for December 11th-13th in Abu Dhabi.

Vice President Kamala Harris, who will compete against Donald Trump in the upcoming November election, expressed her support for emerging technologies like AI and cryptocurrency during a campaign fundraiser on September 22nd. Harris had previously been very much against promoting cryptocurrencies, but has apparently changed her mind since crypto has become such a prominent topic among US citizens.

A Change Of Heart

At an event held at Cipriani Wall Street in Manhattan, Harris emphasized that her administration would promote innovation while also ensuring the protection of investors and consumers. We will encourage innovative technologies such as AI and digital assets while safeguarding our consumers and investors, she stated.

With the cryptocurrency industry experiencing rapid growth in recent years, it has become a prominent issue as the election approaches, particularly as many executives and investors criticize the Biden administration and their strict regulatory stance. Some proponents of crypto viewed the statements made by Harris as a way to highlight her differing approach compared to President Biden, even if she personally does not support crypto.

A Stark Contrast

In contrast, her Republican opponent, Trump, has positioned himself as an avid supporter of the crypto sector, with him being the first ever former United States President to use BTC publicly. He has criticized current regulations and indicated plans to replace SEC Chair Gary Gensler if elected, aiming to create a more favorable environment for cryptocurrency. Recently, he even garnered attention by purchasing burgers with Bitcoin at a New York crypto-themed bar.

According to Bloomberg, the aforementioned fundraiser drew Wall Street donors, with contributions ranging between $500 to $1 million. The Vice President reportedly raised an additional $27 million for her campaign, following a strong fundraising month for the Democratic Party, which collected $361 million in August, compared to Trump who had $130 million.

Zulu Network raised an undisclosed amount in Seed funding with help by Draper Dragon. Zulu Network is a Bitcoin Layer 2 solution, introducing a two-layer architecture aimed at enhancing the capabilities of the Bitcoin Network.

Chaos Labs secured $4M in Undisclosed funding with assistance by PayPal Ventures. Chaos Labs is a platform that focuses on providing advanced risk management solutions for DeFi protocols.

Coinhall obtained an undisclosed amount in M&A funding with support by Jupiter. Coinhall is a decentralized trading terminal for Solana and Cosmos blockchains. It offers real-time prices, charts, swap aggregations, and analytics across all Automated Market Maker (AMM) decentralized exchanges within the Cosmos ecosystem.

Helius acquired $21.75M in Undisclosed funding with help by Founders Fund. Helius aims to help creators by providing APIs to understand on-chain data and query transactions, as well as webhooks that enable automations and bots, plus the RPC nodes that let Solana apps interact with the blockchain.

Aptos Foundation secured an undisclosed amount in Strategic funding with support by Foresight Ventures. Aptos is a scalable Layer 1 blockchain that offers new and novel innovations in consensus, smart contract design, system security, performance, and decentralization.

Bool Network obtained $2M in Seed funding with assistance by Spark Digital Capital. Bool Network is an open, decentralized, and secure Bitcoin verification layer powered by MPC-based (Multi-Party Computation) distributed key management.

CUDIS raised $5M in Seed funding with help by Draper Associates. CUDIS is a Web3 AI wellness company that develops a smart ring for monitoring health metrics. The ring allows users to access their health data via the Solana blockchain and earn passive rewards.

Amnis Finance secured $2M in Seed funding with assistance by OKX Ventures. Amnis Finance is a DeFi protocol on the Aptos blockchain that focuses on liquid staking and yield tokenization. Users can stake their APT tokens through Amnis to earn staking rewards without locking up their capital or running a validator node.

Vana obtained $5M in Strategic funding thanks to support by Coinbase Ventures. Vana is a network designed for private, user-owned data. It is an EVM-compatible Layer 1 blockchain specifically created for collective ownership of private digital assets used in artificial intelligence systems.

Toncoin (by Telegram Messenger) raised $30M in Strategic funding with help by Foresight Ventures. Toncoin (TON) is the native cryptocurrency of The Open Network (TON) blockchain, which was originally created by Telegram in 2018. It was meant to be a competitor to Ethereum and is used for transaction fees, securing the blockchain, gas payments, and more.

The crypto markets had a solid week, but pullbacks are now visible across the charts. On a daily basis, altcoins are also showing losses, with the largest corrections affecting TON, AVAX, and NEAR among the major cryptocurrencies.

Just A Taste

After the Fed finally decided to cut interest rates, Bitcoin peaked at $64,000 but has since fallen by about $1,000, currently trading around $63,000. The week started with Bitcoin dropping to below $58,000 on Monday. Following the decision to cut rates by 0.5% on Wednesday, Bitcoin surged past $61,000 but could not maintain its upward trajectory.

The market cap of the flagship crypto is also just under $1.25 trillion, with its dominance over altcoins decreasing to 54.3%. Moreover, various altcoins, which initially saw notable gains, are now stabilizing. ETH, XRP, BNB, TRX, and SHIB have moved less than 1%, while SOL, DOGE, ADA, LINK, and BCH have dropped by 1% to 2%.

Notable declines include Toncoin, Avalanche, and NEAR. WIF has dropped nearly 10%, leading losses among the top 100 altcoins. The total crypto market cap has similarly decreased by about $40 billion, now below $2.3 trillion.

Other Markets

Some money managers are expressing concerns that the market seems overly relaxed about current issues, especially as the bold move to cut interest rates has pushed already high valuations even higher. At the Morgan Stanley Australia Summit, the Australian Treasurer shared optimistic insights about making progress in the fight against inflation.

In tech news, chipmaker Qualcomm is reportedly considering acquiring Intel, indicating potential shifts in the industry. In Brazil, a judge has imposed a ban on X while Elon Musk contests top court orders, though he has agreed to comply with legal directives. Market reactions are buzzing as polls suggest a landslide victory for Modi, reigniting global interest in Indian stocks during this ongoing bull run. Coffee roasters are bracing for price increases due to dwindling reserves in Vietnam, while a soggy crop in Asia signals continued price hikes for caffeine lovers.

Lastly, hedge fund titans are nurturing a $14 billion group of startup cubs. While these new firms boast substantial investor capital, their ability to replicate the success of their established predecessors remains uncertain.