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 🚬 No cigar

Gary Gensler. The IMF and the World Economic Forum. Inflation.

If crypto were Arya Stark from Game of Thrones, these boogeymen would high up on her death list.

Why not pour fuel on the fire? 

Despite popular belief, bitcoin has not actually returned to its all-time high set in November 2021, all because of inflation. 

What was a bitcoin all-time high of $68,998 back then would be the equivalent of $77,975 in today’s money. 

That’s 13% cumulative inflation across nearly three years, per US consumer price index data.

So, after adjusting for inflation, bitcoin still needs to rally by more than $9,100 to break that price record — a 14% jump. 

Before adjusting for inflation, bitcoin is only $4,900 away, or 6.7%.

Inflation never stops, so bitcoin’s inflation-adjusted all-time high continues to rise as time goes on. 

When bitcoin hit its local top in March, that figure was $76,744, which means it really stopped about 4% short when it peaked at $73,738. 

The same goes for ether and solana. ETH at $2,490 is actually a gut-wrenching 55% below its current inflation-adjusted price record of $5,513. 

ETH had to have reached $5,426 to break an all-time high in March. So, when it hit $4,090, that was actually 22% below the mark, rather than 14%.

Right now, SOL is otherwise 44% below its own adjusted all-time high of $294, and was 28% below in March.

What does it all mean? It’s unlikely that crypto will break from the rest of the finance world and consider only inflation-adjusted prices as the true value of assets. 

Although, there is an argument to do so during periods of high inflation, as was the case in the years during and after the worst of the pandemic.

More critically, it’s just further proof that inflation really sucks the fun out of everything — bitcoin all-time highs included.

— David Canellis

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• BTC has now been stuck below $70,000 for three days straight amid consolidation (current price: $69,120).

• SUI, DOGE and MKR lead the front page for weekly gains — between 12% and 7%. Most other top-100 cryptocurrencies are in the red.

• ETH is now 107,740 tokens away from undoing all burns since the Merge. It inflates by 2,100 ETH per day right now, which at this rate means there’s 51 days to go.

• $133.55 million in longs have been liquidated on CEXs in the past day, compared to $92.34 million in shorts.

• Volumes on Solana DEX Raydium are down 21% week-on-week.

 😲 Incoming!

It’s been a minute since we checked in on the activity over in the tokenized fund space. 

Late Friday, UBS — the Swiss bank with $5.7 trillion in assets under management — announced that it was launching uMINT, or the UBS USD Investment Fund built on Ethereum. 

“Tokenholders can now access UBS Asset Management’s institutional grade cash management solutions underpinned by high quality money market instruments based on a conservative, risk-managed framework,” the press release said. So it’s unfortunately a bit unclear what financial instruments will make up the fund, whereas other popular funds right now hold US Treasuries. 

To give you some perspective: roughly $2.4 billion of total real-world asset value is US Treasury debt, with commodities coming in second at $1.1 billion, per RWA.xyz data. To be clear, the below chart isn’t including Treasurys held by stablecoin issuers such as Circle and Tether.

The co-head of UBS Asset Management APAC, Thomas Kaegi, acknowledged the “growing investor appetite” in the space. Right now, three firms: BlackRock through its Securitize partnership, Franklin Templeton and Ondo dominate the tokenized fund space. 

While BlackRock’s BUIDL and Franklin’s funds might be some of the most well-known, it’s actually Ondo that holds the biggest market cap at $655. Securitize is about $100 million shy, coming in at $533 million (which is BUIDL’s market cap). Franklin Templeton has a market cap of roughly $408 million.

UBS itself acknowledged that this launch is a sign that the firm is serious about the potential of tokenization, which isn’t a surprise given that it’s a participant in the Project Guardian initiative (the Monetary Authority of Singapore’s tokenization pilot) and has previously partnered to issue tokenized notes in China.

Outside of UBS, it’s worth noting that Securitize surpassed $1 billion in tokenized RWA onchain last week. As I noted above, the RWA platform has seen success through BlackRock’s tokenized fund. And Franklin Templeton launched its OnChain US Government Money Market Fund on Base. 

Tokenization may not be one of the sexiest crypto topics, but there certainly is a lot of movement happening in the space.

— Katherine Ross

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• Coinbase’s Paul Grewal said that he’s found over 20 examples of the FDIC warning banks to hold off on offering crypto banking services after the exchange sued the FDIC under FOIA.

• Zodia, Standard Chartered’s crypto custodian, is in talks to raise $50 million, according to Bloomberg. The raise would help Zodia expand its current footprint and branch out to new locations.

• Ethereum Foundation’s Dankrad Feist and Justin Drake both resigned from their EigenLayer advisory roles after stirring up conflict of interest concerns earlier this year.

• The US government wants to claw back $13 million worth of political donations made by former FTX executives.

• Former President Donald Trump leads Vice President Kamala Harris on Polymarket and Kalshi, though he only leads 54% to 46% on the latter, a US-based prediction market.

Q: How are you interpreting prediction markets right now?

I’m more skeptical of Polymarket now, but I do think that overall prediction markets give us some insight into where folks stand with the candidates.

I actually check Kalshi more often, given that it operates in the US and therefore the participants can have some skin in the game. Not to say some bettors on Polymarket aren’t also US-based (shh, your secret’s safe with me) but it’s admittedly a lot harder to be active since, you know, it’s not legally allowed to operate in the US.

Am I fully bought into prediction markets being a clear read for the election though? Absolutely not. 

Just because people are putting money in doesn’t mean that we’re getting an accurate depiction of what people are thinking going into election day. It’s just too early for that in my humble opinion. 

— Katherine Ross