gm 05/09

Summary
gm, US Bancorp resumed its Bitcoin custody services with support for Bitcoin ETFs after a pause since 2022, signaling improved regulatory clarity for banks handling digital assets. Meanwhile, stablecoin innovation accelerated with Stripe and Paradigm unveiling Tempo, a new layer-1 blockchain specifically designed for stablecoin payments, while Fireblocks launched a dedicated payment network connecting fintech companies and stablecoin issuers. In market news, Bitcoin maintained bullish momentum above $112,000 as ETFs saw their largest inflows since early August ($633 million over two days), while Ethereum showed strength with on-chain data revealing whales have increased their ETH holdings by 14% since April, with exchange reserves reaching a three-year low due to increasing institutional demand through ETFs and corporate treasuries.

News Headlines
💰 Ray Dalio Links Bitcoin's Rise to Potential US Economic Crisis

• Billionaire investor Ray Dalio warns that the US economy faces a "debt-fueled heart attack" due to excessive government debt, which could force the Federal Reserve to either raise interest rates or print more money, diminishing the dollar's value.
• Recent surges in Bitcoin (up 20% to $112,000) and gold (reaching $3,530) reflect investor concerns about fiat currencies, with Dalio recommending allocating 15% of portfolios to Bitcoin and gold as hedges against market risks.

💼 SEC's Agenda Proposes Major Crypto Regulatory Reforms

• The SEC has announced a new rulemaking agenda with nearly half of its 20 proposed rules focused on easing regulations for the crypto industry, including potential crypto asset trading on U.S. securities exchanges.
• Under Chair Paul Atkins, the agency aims to create clear regulations for crypto asset issuance and trading while deterring fraud, representing a significant shift in approach to integrate cryptocurrency into the broader U.S. economy.

🔄 Grayscale Launches Ethereum Covered Call ETF for Income Generation

• Grayscale has introduced the Ethereum Covered Call ETF (ETCO), which generates income by systematically selling call options on Ethereum-linked exchange-traded products and distributing premiums to shareholders bi-weekly.
• The ETF aims to provide investors with steady income while maintaining some exposure to Ether's price movements, serving as a complement to existing Ethereum investments as ETH has outperformed Bitcoin this year with a 34% gain.

📈 Ether Exchange Reserves Fall to 3-Year Low as Institutional Demand Grows

• Ethereum reserves on centralized exchanges have reached a three-year low of 17.4 million ETH, decreasing by nearly 10.7 million ETH since September 2022 as institutional investors accumulate the asset.
• This supply reduction is driven by $13 billion in net inflows to ETH ETFs since July 2024 and significant corporate treasury purchases, with 17 publicly traded companies now holding over 3.6 million ETH collectively.

🚨 Hackers Using Ethereum Smart Contracts to Hide Malware

• Security researchers have discovered hackers using Ethereum smart contracts to facilitate malware downloads through compromised Node Package Manager (NPM) packages that appear legitimate to developers.
• This sophisticated attack method, linked to North Korean threat actors, embeds malware within code libraries and uses the blockchain to evade detection, highlighting the urgent need for vigilance among programmers using open-source code.

Market Metrics

Fundraising & VC
1. Aria Protocol (Seed, $15M) - RWA + IP tokenization platform
2. Maiga AI (Strategic, $2M) - Web3-native AI agent platform
3. Aspecta (Strategic, Undisclosed) - AI-powered profile builder for developers

Regulatory
🌐 UK Drafts Stricter AML Rules for Crypto Firms

• HM Treasury has published draft reforms to AML regulations that would lower the threshold for change-in-control notifications from 25% to 10% for crypto businesses.
• The proposals introduce broader "fit and proper" testing for controllers of crypto firms to enhance regulatory oversight.

🔮 CFTC Commissioner Warns of Prediction Market Risks

• Outgoing CFTC Commissioner Kristin Johnson issued a warning about insufficient regulatory oversight in prediction markets despite their growing popularity with retail investors.
• Johnson criticized firms exploiting licensing loopholes to offer leveraged prediction contracts without adequate regulatory safeguards.

🏛️ Ukraine's Parliament Advances Crypto Legalization Bill

• Ukraine's parliament passed the first reading of a bill to legalize and tax cryptocurrency, with 246 votes in favor.
• If enacted, the legislation will impose an 18% income tax, a 5% military tax on profits, and a temporary 5% tax on fiat conversions during its first year.

⚖️ Japan Proposes Moving Crypto Under Securities Law

• Japan's Financial Services Agency has proposed transferring crypto regulation from the Payment Services Act to the Financial Instruments and Exchange Act (FIEA).
• The shift aims to enhance investor protections by aligning crypto oversight with stricter securities regulations and addressing issues like unclear white papers and investment scams.

⚠️ SEC's Crypto Task Force Urged to Quantum-Proof Digital Assets

• The SEC's Crypto Assets Task Force is reviewing a roadmap to protect digital assets from threats posed by future quantum computing advances.
• Current encryption methods used in crypto could become vulnerable to quantum technology as early as 2028, potentially jeopardizing trillions in digital assets.

Technical Analysis
Bitcoin - Bitcoin has broken through the ceiling of a falling trend channel in the short term. This indicates a slower falling rate initially, or the start of a more horizontal development. The currency has support at points 107700 and resistance at points 113500. The currency is assessed as technically neutral for the short term.

Ethereum - Ethereum has broken through the floor of a rising trend channel in the short term. This indicates a slower rising rate at first, or the start of a more horizontal development. The currency is approaching support at 4130 points, which may give a positive reaction. However, a break downwards through 4130 points will be a negative signal. The currency is assessed as technically slightly positive for the short term.