Around the block

Off the block

Cryptocurrencies and digital equities are catching their breath here in the dog days of summer after a tumultuous 1^st half. We have seen a boost in returns across the board in July. Top of mind:

• Bi-partisan stablecoin negotiations in the House Financial Services Committee had advanced up to the summer recess but a draft bill was paused due to push back from Janet Yellen and bank lobby groups. It is expected to provide clarity and oversight for both bank and non-bank stablecoin issuers.
• U.S. Senators introduced the bi-partisan draft of the Digital Commodities Consumer Protection Act on August 3^rd. It named bitcoin and ether as “digital commodities”, giving the Commodity Futures Trading Commission (CFTC) exclusive regulatory authority over the newly named digital commodities and requires exchanges trading those assets to register with the CFTC.
• Market participants continue to remain alert to Fed policy and incoming economic data as liquidity and macro concerns have weighed on crypto in 2022.

Industry developments

• Tesla revealed during its Q2 earnings call that it sold 75% of its bitcoin holdings and recorded a $170MM bitcoin impairment charge on the existing holdings.
• Coinbase saw its shares plummet in July following an enforcement action by the SEC only to see shares spike days later upon announcing a new strategic partnership with Blackrock. 

Regulatory developments

• A blockchain and cryptocurrency presidential advisor position was created by the recently enacted CHIPS Act designed to support domestic chip manufacturers.
• Stablecoin legislation, envisioning bank-like regulation and oversight of issuers, is a key bi-partisan priority once Congress returns from recess.

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