Harris Campaign Weighs In On Crypto, Bitcoin Volatility Remains High, and Wall Street Giants Load Up on Spot BTC ETFs

Takeaways

• Harris policy adviser talks digital assets: Speaking at a Bloomberg roundtable event, Kamala Harris policy adviser Brian Nelson said Harris will support policies to grow crypto and other emerging technologies.
• Spot bitcoin ETF holdings total $4.7 billion: Goldman Sachs and Morgan Stanley invested in BlackRock's iShares Bitcoin Trust, among other ETFs.
• Bitcoin surpassed $60,000 as volatility remains high: With the Federal Reserve's interest rate decision looming, traders are cautious about future price movements.
• Tether has launched its USDT stablecoin on the Aptos blockchain: The move comes as Tether’s main competitor, Circle, announced that USDC will soon have tap-to-pay functionality enabled.
• Traders have invested heavily in bitcoin options linked to the US election, with over $345 million in open interest: The majority of the interest is in call options, suggesting traders could be anticipating potential record highs in bitcoin.
• The SEC has rejected Cboe BZX’s filings for two proposed spot Solana ETFs, citing concerns about Solana's classification as a security: The decision has halted the approval process, with VanEck and others still vying to launch Solana ETFs.

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Harris Adviser Says She Will Support Crypto

Brian Nelson, a top policy adviser for Vice President Kamala Harris, told reporters Wednesday that Harris will back measures that will help crypto, according to Bloomberg.

“She’s going to support policies that ensure that emerging technologies and that sort of industry (crypto) can continue to grow,” Nelson said at a Bloomberg roundtable event at the Democratic National Convention.

Nelson’s remarks were the first public statement from Harris’s camp about how the presidential nominee views digital assets. It comes after Harris’s campaign previously held a roundtable with prominent crypto leaders who voiced their issues with a Biden-Harris administration widely seen as hostile toward the industry.

Harris herself has yet to make any public statements about digital assets. And the Democratic Party’s platform proposal did not mention crypto. While speculation has raged, Harris has brought in three advisers seen as hostile toward the space, including Brian Deese, a former director on President Biden’s National Economic Council who authored a blog post highlighting digital asset risks.

Meanwhile, former President Donald Trump has gone all-in on crypto. In July, Trump gave a headlining speech at Bitcoin Nashville, where he pledged to make the US the “crypto capital of the planet.” On Thursday, Trump announced plans to launch his own crypto platform, "The DeFiant Ones," a digital real estate platform that could tokenize real-world assets or sell digital versions of assets in the metaverse.

Goldman Sachs and Morgan Stanley Pour Into Spot BTC ETF Holdings

Investment advisers had racked up $4.7 billion in spot bitcoin ETFs allocations by the end of the second quarter, according to SEC filings. Two prominent firms led the charge, with Goldman Sachs and Morgan Stanley holding $418 million and $188 million, respectively, worth of bitcoin for its clients as of June 30th.

Morgan Stanley, which recently allowed its brokers to offer bitcoin ETFs to clients, saw an $87 million decrease in bitcoin ETF allocation from the previous quarter. This reduction could suggest a period of portfolio rebalancing or profit-taking, reflecting the still-cautious approach of many asset management firms.

Both firms predominantly invested in BlackRock’s iShares Bitcoin Trust (IBIT), now the largest of the spot bitcoin ETFs. The preference for IBIT among these major financial institutions is likely contributing to BlackRock’s dominance in the spot bitcoin ETF space – although the ETF’s main competitor, Grayscale’s (Grayscale Bitcoin Trust) still has the potential to overtake it once more.

Bitcoin Reaches $61K Mark Amid Ongoing Market Volatility

Bitcoin surged above $61,000 this week despite ongoing market volatility. The Bitcoin Volatility Index, which tracks bitcoin’s price swings, was sitting at 3.07% at the start of the week – following a spike to 3.25% on August 10th, marking its highest point over the past year. At the time of writing, bitcoin is trading at around $60,370. Market participants are closely watching the Federal Reserve's upcoming decision on interest rates on September 18th.

Despite the recent positive signals, this week marked the four-month milestone since the latest bitcoin halving, a quadrennial event that reduces mining rewards by half. Historically, these halvings have led to increases in bitcoin's value due to reduced supply. However, this year's halving has deviated from that pattern, with bitcoin price dropping roughly 5% since the latest halving event.

Tether Expands USDT to Aptos Blockchain, While Circle Enables Tap Payments For USDC

Tether, the issuer of the widely-used USDT stablecoin, has announced the launch of its main USDT stablecoin on the Aptos blockchain. This new integration allows Aptos blockchain users to conduct transactions with USDT at lower costs compared to more expensive networks like Ethereum. Aptos is a Layer 1 blockchain project founded by former Meta engineers Mo Shaikh and Avery Ching, who were previously involved in Facebook’s blockchain initiative, Diem.

The project aims to deliver an efficient, scalable, and user-friendly infrastructure for decentralized applications and smart contracts. The new compatibility with the chain will likely add to the DeFi functionality of the network and allow users to store USDT natively on-chain.

The news comes as Tether’s main competitor, Circle, announced last week that tap-to-pay functionality will soon be enabled for its stablecoin USDC as a result of Apple enabling NFC development for third parties.

Bitcoin Traders Bet Big on US Election Outcomes with $345M in Options

Crypto traders have been locking in significant positions in bitcoin options as they speculate on the potential impact of the upcoming US elections. These options, set to settle four days after the November 4 elections, started trading on Deribit roughly a month ago. The notional open interest, which represents the dollar value of active options contracts, has reached roughly $345 million.

Call options make up 67% of the total open interest, with the remaining 33% coming from put options. The most popular option is the call at a strike price of $80,000, with an open interest exceeding $39 million.

Overall, the open interest is concentrated in higher strike calls. What this might indicate is that traders are preparing their portfolios for the possibility of bitcoin (and the wider market to some extent) reaching record highs around the time of the election. However, there is a noticeable portion of interest in hedging positions as well – suggesting a somewhat divided opinion on the expected effect of the US elections.

SEC Rejects Filings for Solana ETFs

The SEC has rejected Cboe BZX’s filings for two proposed spot Solana ETFs, leading to their subsequent withdrawal from the Cboe website. The SEC’s decision follows discussions with issuers where the regulator expressed concerns about classifying Solana as a security, a stance consistent with its position in various court cases.

In the process of seeking approval for exchange-traded funds, exchanges like Cboe file 19b-4 forms on behalf of issuers, which, once published in the Federal Register, trigger the SEC’s review period for approval or denial. However, since the SEC rejected these filings, the approval process never commenced. 21Shares and VanEck are still in pursuit of their own SOL-based ETFs.

-The Gemini Team