The Breakdown First Five - Monday, September 16, 2024

Welcome back to The Breakdown First Five — the 5 most interesting and/or important stories in bitcoin, crypto, and markets to start your day.

5. ETF Inflows Rebound

After a few dismal weeks, Bitcoin ETF inflows are starting to look up. Friday saw $263M added to the funds, the largest single day in almost two months. That capped off a $400M week, the first positive week of the last three. Fidelity, Bitwise and ARK all had strong inflows however Blackrock was negative on the week with zero flows on most days. The numbers were anomalous for the mega-fund which has typically led the way. 

4. Tether’s Government Relations

Tether has hired a new Head of Government Relations as they attempt to reset their compliance stance. Jesse Spiro will now be in charge of talking to government officials about Tether. He previously held a similar role with Paypal’s crypto division and formerly worked at Chainalysis. The move comes as Tether tries to revamp their public image by doubling down on compliance staffing and law enforcement cooperation. 

3. Kalshi Delisted

For a few brief hours, American citizens could bet on the election outcome in regulated markets. The CFTC has now appealed the decision in the Kalshi lawsuit, triggering an automatic stay and forcing the platform to delist election contracts. In weekend filings, the regulator warned that an imminent "explosion in election gambling will harm the public interest." The original judge had dismissed public interest in favor of the regulator sticking to their legislative mandate. 

2. 50bps Priced In

Markets have adjusted massively since the middling inflation print last week and are now pricing in a jumbo Fed rate cut. Fed funds futures are now around a 60% chance that the FOMC goes big on Wednesday, reducing chances that markets will be caught off side by a dovish Fed. Whether these are normalization cuts or fighting a recession, markets have given Powell approval to go as hard as he wants when the Fed begins their cutting cycle. 

1. No More “Crypto Asset Securities”

The SEC has walked back their legal theory, backing away from the term ‘crypto asset securities’. In an updated complaint in the Binance case, the SEC said it “regrets any confusion” caused by the term and they only even meant it as shorthand for more complete legal analysis. They claim they have “consistently maintained” the stance that tokens themselves are not securities, despite numerous contradictory legal filings.