Quick Take

• Tokenised gold tokens reached $3 billion market capitalisation; the US Securities and Exchange Commission (SEC) aims to formalise ‘innovation exemption’ for crypto projects by year-end; Morgan Stanley to allow advisers to offer crypto funds to clients.
• US spot BTC ETFs had a net inflow of US$2.7 billion last week, compared to $3.2 billion the week before. Spot ETH ETFs saw a net inflow of $488 million in the same period, down from $1.3 billion the week before.
• On the macro side, US President Trump said the US will impose a new 100% tariff on China in response to China’s attempt to impose export controls on rare earths. The US Federal Reserve meeting summary suggested that policymakers broadly supported further rate cuts this year, although disputes remain on the number of cuts. The latest CME FedWatch Tool indicated a 98% probability of a rate cut in October, compared to 95% the week before. The Reserve Bank of New Zealand slashed its benchmark rate by 0.5% to 2.50% and signalled further reductions.
• Notable updates: Ethereum developers unveiled the Kohaku project focused on privacy, Ocean Protocol withdrew from the Artificial Superintelligence Alliance.
• Notable events in the coming week: US Fed Chair Powell’s Speech, US Retail Sales and Produce Price Index ex Food & Energy.

Weekly Market Index

According to our research dashboard, the price index was down by -9.60%, while volume and volatility indices were up by +39.19%, and +55.12% respectively last week. Volatility increase was led by FIL (+220.69%), ATOM (+176.11%), and DOT (+145.97%).

All tokens in our index dropped last week. BTC reached an all-time high (ATH) above $126,000 last Monday, while ETH surpassed $4,700 earlier in the week. This coincided with US Federal Reserve policymakers broadly supporting further rate cuts this year, although disputes remain on the number of cuts. Additionally, US President Trump said the US will impose a new 100% tariff on China in response to China’s attempt to impose export controls on rare earths, which led to mass crypto liquidations. Subsequently, trade tensions appeared to have softened as both countries signalled a willingness to resume trade negotiations.

Additionally, over 200 public companies have collectively acquired over 1 million BTC (around US$121 billion), accounting for nearly 5% of BTC’s total supply.

Chart of the Week

Tokenised gold tokens reached a $3 billion market capitalisation milestone last week, growing by 134% year-to-date as Gold reached an ATH above $4,000 per ounce for the first time. This rally coincided with the ‘debasement trade’, referring to growing investor demand for alternative stores of value amid macro risks and concerns over weakening fiat currencies. Additionally, the recent US-China trade tension around China's rare earth mineral export control could also drive investors' sentiment towards safe-haven assets.

Weekly Performance

Top-cap tokens decreased in prices last week. BTC and ETH decreased by -6.7% and -7.9%, respectively. US President Trump said the US will impose a new 100% tariff on China in response to China’s attempt to impose export controls on rare earths, which led to mass crypto liquidations.

All key categories decreased in market capitalisation in the last seven days, with NFT and Gaming experiencing the largest decreases.

News Highlights

Company News

• Foris DAX Middle East FZ-LLC (trading as Crypto.com), became the first Virtual Asset Service Provider (VASP) in the UAE to receive In-Principle Approval (IPA) from the Central Bank of the UAE (CBUAE) for a Stored Value Facilities (SVF) license. Upon receiving the final license, the company will be able to provide digital payment services for Dubai Government fees to residents in the UAE, with all financial settlements conducted in UAE dirhams or dirham-pegged stablecoins exclusively through the SVF framework.

Adoption

• Morgan Stanley will reportedly allow its financial advisers to offer crypto funds to clients with individual retirement accounts and 401(k)s, starting 15 October. Initial offerings focus on bitcoin funds from BlackRock and Fidelity, with capped allocations.
• A group of banks, including BNP Paribas, Bank of America, and Goldman Sachs, is partnering to explore a stablecoin offering pegged to G7 currencies. The token is expected to be reserve-backed and available on public blockchains for payments.
• North Dakota detailed plans to launch Roughrider Coin, a state-backed USD stablecoin by 2026, which will be initially used for interbank financial activities. This will be the second US state to issue a stablecoin following Wyoming’s initiative.
• BNY Mellon is exploring tokenised deposits and blockchain-based payment rails to support 24/7, real-time transfers.
• BCP, Peru’s largest bank, became the first Peruvian bank to offer regulated crypto services, enabling selected clients to trade bitcoin and USDC in a closed-loop system. This initiative is part of a pilot authorised by Peru’s banking regulator.
• Luxembourg’s sovereign wealth fund allocated 1% of its portfolio (around $9 million) to Bitcoin ETFs, one of the first European state-backed entities to do so. 
• Ugandan developer Diacente Group and blockchain company Global Settlement Network launched a pilot for a central bank digital currency (CBDC), including an initiative to tokenise $5.5 billion of real-world assets (RWAs). The CBDC is backed by Ugandan treasury bonds. 

Regulation

• The US SEC plans to formalise its ‘innovation exemption’ for crypto projects by year-end, according to Chair Atkins. This policy would allow companies to build digital assets and innovative technologies in the US.
• The UK lifted its ban on crypto exchange-traded notes (ETNs), allowing retail investors to gain access via exchanges based in the UK approved by the Financial Conduct Authority (FCA). The ban was initially introduced in January 2021.

Investment Vehicles

• Grayscale introduced staking for its Ethereum and Solana spot crypto ETPs, including Grayscale Ethereum Trust (ETHE), Grayscale Ethereum Mini Trust (ETH), and Grayscale Solana Trust (GSOL), becoming one of the first US spot crypto ETPs to do so. 
• S&P Global plans to launch the Digital Markets 50 Index to track cryptocurrencies and blockchain companies. It is expected to include 15 digital assets with a market capitalisation of at least $300 million, and 35 public companies in the sector with a market capitalisation of at least $100 million.

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