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Cryptocurrencies

Lucy Brewster

brewmarkets.com

You just know that when a Bloomberg analyst is wondering why we don’t have 

Last weekend delivered a selloff for the ages: On Sunday, bitcoin tumbled 15% from the all-time high it had hit just a day earlier, sparking an even bigger wipeout for crypto investments than stocks saw after 

 The downward spiral kicked off when the trade tensions between the US and China ramped up again, after President Trump surprised markets by announcing (another) 100% tariff on China. Traders were spooked by risks of rising economic uncertainty, leading investors to rotate into safe haven assets like gold, and flee bitcoin and other risk-on investments.

 over the weekend, in which roughly $19 billion in leveraged cryptocurrency positions were erased in just 24 hours, while over 1.66 million crypto traders were wiped out.

While bitcoin and ethereum tumbled, both have since recovered a bit of lost ground. But smaller altcoins took bigger hits, with some dropping 

You might think that with bitcoin’s volatility on full display, investors would shy away from the asset class. But bitcoin and ethereum ETFs, which track the assets’ prices and are backed by the real thing, have been seeing gargantuan inflows, showing there’s just as much interest as ever.

On Monday, fear gripped the market and investors pulled out a combined $755 million from bitcoin and ethereum ETFs. But the tide reversed yesterday, when 

 as investors looked to buy the dip. In fact, total inflows into crypto ETFs have reached $48.7 billion this year, already surpassing 2024’s total.

And more and more money is expected to flow into these ETFs once they get the green light from brokerages.

“Brokerage platforms are opening cryptocurrency access to investors, which will help crypto ETFs that are already benefiting from a favorable regulatory environment,” wrote Head of ETF Research Aniket Ullal. The SEC is currently reviewing 

 featuring a variety of digital assets, including altcoins like solana, XRP, and many more.

Cryptocurrency volatility isn’t going anywhere—and neither are investors. At this rate, it may only be a matter of time before that Fartcoin ETF becomes a reality.—

The massive crypto liquidation event explained

Bitcoin saw a bigger wipeout this weekend than stocks did in 1929.

Liquidation lowdown

If you thought the Green Bay Packers had a tough fall from grace this week, just look at crypto.

Bitcoin is down 5.24% over the past week, dipping below $110,000 for the first time in a month. Meanwhile, ethereum has declined 9.72%, while fellow altcoins like Solana, XRP, and dogecoin also fell.

 This week, a liquidation wave to the tune of roughly 

 hit the crypto market like a tsunami. As prices tried to recover, another headwind arrived today: $17 billion in bitcoin options and $5.3 billion of open interest in ether is set to expire this afternoon, raising the chances of even more volatility.

 thanks to the GOP wholeheartedly embracing deregulation and widespread adoption across the world of finance. But momentum appears to be slowing, mirroring a broader selloff in the S&P 500 over the past five days. It doesn’t help that September is historically a relatively weak month for both stocks and crypto.

While this latest selloff seems to be crypto’s inherent volatility at play yet again, there’s more happening below the surface.

Crypto treasury companies are a group of 

 that have turned to buying crypto in bulk as a treasury asset, boosting their share prices. Strategy (formerly MicroStrategy) was the first to start the trend, but the company’s success invited copycats, who have flooded the crypto market with $44 billion this year alone, according to Bloomberg.

That’s been great news for digital assets, whose prices have been bolstered by this corporate demand. But now, the buying spree is slowing down.

Publicly traded crypto treasury companies bought a combined 

 in July, Bloomberg reports. In August, that figure plunged to 12,600—an 80% decline. The slowdown continued in September, with companies only purchasing 15,500 bitcoins so far this month.

Lower crypto purchases means lower crypto prices. And as the value of crypto falls, so, too, does the value of crypto treasury companies, creating a vicious cycle that can be difficult to break. Strategy shares have sunk 12.04% in the last month.

Analysts are worried about a bubble forming in the AI industry as 

 between Nvidia, OpenAI, and Oracle fuels each company’s growth. It might be even worse in the crypto industry—and this bubble could be bursting before our very eyes.—

Bitcoin, ethereum, and crypto in general is falling

Fewer crypto purchases by publicly traded companies isn't helping the selloff.

Crypto is losing momentum

Crypto investment company Grayscale just converted its Digital Large Cap Fund into a new exchange-traded fund: The Grayscale Coindesk Crypto 5 ETF.

While that may sound like financial gibberish to you, it’s actually a pretty big deal: The new fund bundles 

multiple cryptocurrencies into one investment

The first-of-its-kind fund was approved by the SEC last Wednesday, and Grayscale wasted no time launching it on Friday. The fund tracks the five biggest crypto assets by market cap: bitcoin, ether, XRP, Solana, and Cardano. Roughly 70% of the fund is in bitcoin, 17% is allocated to ether, and the rest is distributed among the smaller cryptos.

“The result is coverage of roughly 90% of the entire crypto market in a single product,” explained Grayscale’s Senior Vice President of ETF Capital Markets Krista Lynch. “We believe this has the potential to become the crypto market’s equivalent of the S&P 500: a diversified, broad-based foundation for investors.”

A whole new wave of crypto investment vehicles have launched since the SEC greenlit a spot bitcoin fund back in January 2024. While most of these digital asset funds focus on singular cryptocurrencies, combining coverage into one fund seems like a logical next step.

“Investors have become increasingly comfortable with Bitcoin, but venturing beyond it into other digital assets can feel daunting. The question quickly becomes: Which tokens do I choose, and how do I evaluate them? Multi-asset products take that burden off the individual investor,” added Lynch.

The newest launch from Grayscale also comes as the SEC is amending its Generic Listing Standards regarding commodity ETFs, which will subsequently 

 for ETF issuers to bring new crypto funds to market.

But so many new ETFs—from leveraged single stock funds, investments that track politicians' trades, and now a whole new array of crypto funds—can lead to a paradox of choice, in which investors have more options than they can responsibly handle.

Case in point: Last month, the number of ETFs 

 the number of stocks for the first time ever.

At this rate, soon we’ll need an ETF that tracks all the ETFs.—

ETFs can now include multiple cryptocurrencies

Grayscale has collected five of the biggest cryptos into one investment.

Crypto ETFs just got crazier

Mark Reeth

Listen, we’re not saying that crypto and fraud go together like peanut butter and jelly. But wherever crypto goes, a waft of graft seems to follow in its wake.

The industry’s latest money-making scheme is crypto treasury companies: small, often unprofitable publicly traded companies that drop what they’re doing and buy as much cryptocurrency as they can handle. It inevitably juices the company’s share price, which inevitably encourages others to join in: Over 160 bitcoin treasury companies have cropped up across the market as of the end of August, according to the Financial Times, with more turning to alternative cryptocurrencies lately.

But it’s not all fun and games: Fortune noticed that several stocks that pivoted into crypto treasury companies enjoyed 

 announcing their new business model. The implication is that investors with insider knowledge bought shares before the rest of the market realized what was coming, likely during the company’s roadshow touting its transformation.

Just as companies won’t stop turning to crypto to boost shares, investors won’t stop betting on crypto treasury companies anytime soon. But as these companies continue to flood the market, investors need to know that not only are they exposing themselves to the perils of 

, they’re also often the victims of insider trading.

Insider trading at crypto treasury companies

Investors are buying shares of companies just before they pivot to crypto.

Beware crypto treasury companies

Once derided as a fringe movement, like Magic: The Gathering or pickleball, crypto is now fully mainstream.

Crypto has been gaining steam after several of its biggest opponents were replaced by the Trump administration, lawsuits against major players were 

, and a series of ETF debuts gave it a foot in the door of the financial world.

That door was kicked wide open last week when President Trump signed 

 instructing the Labor Department and SEC to review guidance for retirement account managers about allowing alternative investments like cryptocurrencies into 401(k)s.

All of this recent success has propelled the total crypto market cap 

Bitcoin is up 3.36% in the last week, rose above $120,000 earlier this afternoon, and remains inches away from a new record. Altcoins are even hotter: Ethereum just popped above $4,000 for the first time in years, and has climbed 15.49% in the last five days. Meanwhile, crypto trading platform Coinbase gained 2.92% today.

Crypto has finally arrived. The only question now is, what comes next?

The spotlight is blinding investors to dangers

A few things are clear: Adoption isn’t slowing anytime soon, even as the classic crypto risks remain.

The ability for companies to reinvent themselves as crypto treasuries and rake in investor money means the trend is here to stay. Just the other day, Trump-backed World Liberty Financial announced it’s partnering with a small blockchain company called ALT5 Sigma Corporation to effectively establish 

That’s not the only recent crypto news. Big banks and retailers alike are exploring stablecoin adoption, searching for ways to capitalize on that form of crypto’s 

. Lenders may soon consider crypto assets when they’re assessing a borrower’s 

. And Robinhood and Coinbase are trying to 

, bringing publicly traded companies onto the blockchain.

, but not everyone is gung-ho about crypto. Some pros note that the guardrails protecting the financial system from crypto volatility are being 

, and that betting big on the nascent asset remains risky.

For example: ALT5, the company partnering with World Liberty Financial, soared over 42% when the news was announced last week. It plummeted 26.5% today.

But these days, it’s not just the twists and turns of an individual stock or crypto coin that investors need to prepare their portfolios for. The last crypto crash in 2022, spurred on by the collapse of FTX, was contained to the crypto ecosystem. With regulators, publicly traded companies, and soon retirement accounts all-in on crypto, that won’t be the case the next time bitcoin takes a nosedive.

Crypto's new era begins

With its entrance into retirement accounts, crypto has come fully mainstream.

A new crypto era has arrived

Judy Dutton

Crypto Week wrapped with a Crypto Weekend rager celebrating the recent passage of several bills in the House of Representatives laying down the law on virtual currency. In case you need a refresher, here’s the gist:

, already passed by the Senate in June, allows banks and other institutions to acquire licenses to issue stablecoins—a type of crypto that, as its name suggests, is more reliable than its volatile kin like bitcoin since its value is tied 1:1 to the US dollar.

 creates a clear set of regulatory guidance for crypto, splitting oversight duties between the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC).

The Anti-Central Bank Digital Currency Surveillance State Act

 prevents the Federal Reserve from creating its own cryptocurrency. This one’s a head-scratcher, since the Fed doesn’t seem to give a hoot about minting a JeromeCoin—but then again, President Trump does love giving “Mr. Too Late” Powell a hard time.

While the crypto-conscious congratulated themselves on a job well done, average people were more likely to shrug at the news. Only 8% of Americans used some form of crypto in 2024, according to the Federal Reserve—but these new bills could pave the way toward more mainstream use. Amazon, Walmart and a host of other familiar names are already discussing how they’d 

But although these three bills have been hailed as a big step toward making crypto safer and more accessible for all, others see a path riddled with pitfalls that could trip up even a seasoned investor.

Some fear that the rise of stablecoins could plunge the US financial system back into “

,” a chaotic pre-Civil War era when banks issued their own currencies. Not surprisingly, this mixed bag of semi-legal tenders vacillated in value all over the map, leading to panicked bank runs and savings evaporating overnight. Thankfully, President Lincoln passed the National Banking Acts of 1863 and 1864 to issue stricter regulations, which eventually led to Americans sticking with one national currency known as the US dollar.

But with new legislation opening the door to stablecoins, is all that work about to unravel?

“The wildcat banking era failed because there were too many issuers with weak controls, poor reserves, and no consistent oversight,” Maple Finance CEO Sidney Powell told Brew Markets. “These bills attempt to avoid that, but the risk returns if regulatory enforcement is lax or if too many underregulated issuers flood the market. If every fintech can issue a stablecoin, we could see instability that undermines the very credibility these bills aim to create.”

One murky area centers around what happens after you buy a cryptocurrency, then want to exchange it for your old greenbacks. Although regulations may require disclosures about how and when you can redeem your crypto, the fine print of when and how could be easily overlooked (translation: you’ll see those sweet dollars… someday).

 Don’t assume crypto regulations = safety, or that compliance = quality. It’ll take more than three bills to tame crypto, so watch your back.

New crypto bills can bring back old problems

Bank runs, evaporated savings, and the disastrous consequences of letting companies make their own stablecoins.

Crypto enters its wildcat era

“Crypto week” may sound like something a guy you went to high school came up with to market worthless meme coins to teenagers on X, but it’s actually a legislative agenda in the House of Representatives.

 to a new record today in anticipation of all the various pro-crypto bills the legislative body could pass, including the GENIUS Act, the Digital Asset Market Clarity Act, and the anti-CBDC Surveillance State Act.

 for the SEC and Commodity Futures Trading Commission, create a legal path for stablecoins and other tokens, and ban the Fed from creating its own digital currency. All of these efforts are aimed at bringing regulatory clarity to crypto markets, which industry bulls say will foster more mainstream adoption.

Other cryptocurrencies including ethereum, solana, and XRP also jumped in anticipation of the legislative wins.

 “We are filling a gap,” Beth Haddock, the global policy lead at Stablecoin Standard said in an interview with Brew Markets 

. “It’s just not OK that you have USDC, which is now a publicly traded company with Circle, and we don’t have stablecoin legislation.”

Wall Street has come around on digital assets in a big way, as financial titans shift from calling crypto a scam to guzzling bitcoins like they’re those 

Crypto exchange-traded funds have been raking in the cash as the Street gets more comfortable with the world of digital assets: Bloomberg reported that US bitcoin ETFs raked in 

 in new money last week, one of the funds’ best periods ever.

Small startups, too, have been hoping to ride the crypto wave, buying cryptocurrencies to 

 For all the legislation, tokenization, stablecoins, and hype, the industry is still marked by volatility, scams, and 

. Be wary about hopping aboard the bandwagon: If there’s one thing we have learned from the last few crypto booms and busts, it’s that the good times never last forever.—