Stocks are up, oil is up, gold is up, and Bitcoin is up, currently at $80,000, up 30% in the last month. Whether or not it’s logical, the debasement/store-of-value trade appears strong, according to Bloomberg’s ETF analyst Eric Balchunas.
The crypto bear market appears to be well and truly behind us. For all the talk in this newsletter and elsewhere about the institutions being here, most haven’t really begun to move into crypto with size. Bullish. Crypto ETFs pulled in more than $2 billion for a second straight week. Solana spot ETFs just had their strongest stretch on record.
While the overall trend in crypto is bullish, this week macroeconomics and geopolitics introduced volatility to both the up and downside. Bad news first. Tensions in the Middle East escalated in what’s become predictably bizarre fashion. President Trump posted an AI video of Iran’s Kharg Island being “blown to smithereens” and mused about changing the name of the Strait of Hormuz to the Trump Strait. That contributed to the aforementioned rise in the price of oil, but it wasn’t the only factor.
Treasury Secretary Bessent blamed Ukraine too: “Ukraine has decided that they want to blow up Russian energy assets and refined products, so that is creating upward price pressure on a global basis.”
Now on to the good (for crypto). Ursula von der Leyen spoke about mobilizing European savings to fund European companies, which is tantamount to capital controls, a classic tool of financial repression. Anyone who has paid attention to Russell Napier these past few years is unsurprised that this is arriving in the EU, UK and Japan, although the pace might be surprising. Since Bitcoin can potentially skirt capital controls, some bought BTC in reaction to the news.
The probability of a Fed rate hike got as high as 68% this week. Folks like Lyn Alden don’t expect it to happen, which could be bullish if it catches many by surprise.
In crypto news, Robinhood Chain was the focus of this week. Earlier in the week, it flipped Ethereum and Hyperliquid in 24-hour app revenue, and on Thursday, it flipped Solana. By gas fees, Robinhood Chain became the largest Ethereum L2 in the world, collecting $546,000 in a single day, up 936% from thirty days prior. On Thursday, Robinhood Chain generated over $4 million in 24-hour revenue, roughly $1.4 billion annualized against Robinhood’s $4.4 billion in annual revenue. Santiago Santos pointed out that chain revenue runs at roughly 90% margin, which works out to something like a 50% increase in profits.
Memecoin trading is fueling all the activity on Robinhood Chain, but with a new twist. A tokenized stock is paired to a worthless memecoin (with some tenuous association to the stock) in a liquidity pool. For example, the BONER memecoin was paired with tokenized HIMS shares. Last weekend, BONER reportedly cornered 81% of the on-chain supply of tokenized HIMS shares, causing the price of tokenized HIMS to diverge by 37%.
Tokenized AMC became the target of on-chain traders, resulting in several angry posts from AMC CEO Adam Aron directed at Robinhood CEO Vlad Tenev, who, for his part, seemed calm. This RWA twist is being pushed as something wildly new or exciting, which is partly true, but don’t be fooled. It’s extractive, the financial equivalent of Jackass. Dormant KOL CryptoMessiah warned that Robinhood Chain is rife with scams. He knows what he’s talking about.
The Robinhood Chain story is incomplete without bringing up Fomo, the app responsible for something like 90,000 of the 115,000 wallets on the chain. Se Yong Park, co-founder of Fomo, claims the app is onboarding around 40,000 people a day from the app stores. Asked whether these Fomo users are new, he said, “I don’t really think there are 40,000 existing people every day that are discovering Fomo from the crypto space.” If Mr. Park’s numbers are even remotely accurate, it’s likely Fomo is onboarding new users for the first time since the January 2025 TRUMP memecoin launch.
Mike Zajko’s look at Fomo’s growth suggests a sophisticated paid-acquisition campaign. Mr. Park claimed July’s total growth spend was roughly $150,000.
Fomo’s revenue crossed $1 million in daily fees for the first time. KOLs are posting FOMO-inducing (fear of missing out) gains, like crossing $1 million from a $10,000 start a month ago. These PnLs are verifiable, which makes them far more persuasive than the screenshot economy of cycles past. It’s still mostly false advertising because the gains are unrealized PnL on illiquid memecoins. Oh yeah, and users are already gaming the screenshots and leaderboard mechanics. Of 429,000 traders on Fomo, roughly 5% are in profit. Only 0.25% have made more than $500.
The well-known dismal win rate hasn’t deterred KOLs from gushing about social trading and memecoins. Fomo has enabled one KOL to find Robinhood Chain runners simply by pocket-watching: “social trading is a contagion and you can quickly decipher who’s just farming followers after watching them for long enough”. Perhaps “contagion” was a Freudian slip.
Leading KOL Ansem predicts multiple memecoins at multibillion-dollar valuations in Q4. He is also performing technical analysis on his namesake memecoin, ANSEM, complete with a higher-lows-and-higher-highs chart.
Ryan Watkins, notably not an influencer KOL, predicts social trading will grow in popularity, leading to trading celebrities. Jeff Dorman disagreed, writing that social trading isn’t new, that it has failed repeatedly for decades, and that it fails for the same reason each time. Namely, anyone truly worth following eventually stops posting publicly. This brings to mind Cobie’s arc.
Whatever happens, memecoins are commanding attention now. Plenty are frustrated. The common complaint is how memecoins are a zero sum game in which parasites leech off any returning optimism. Rampant memecoining is a bull-cycle killer. Let’s hope it’s a sideshow, for the sake of the developing bull market.
Flood thinks crypto is entering “peak financial nihilism” and becoming a land of wolves. This seems in line with predictions of a broader casino culture turning every part of life into a lottery. There is historical precedent for this in post-revolutionary France, where rampant speculation eventually damaged productivity.
Let’s turn to other news. The SEC proposed updating the rules and forms governing registered transfer agents. The practical outcome is that tokenization becomes much easier to build around. A record 1.9 million on-chain tokenized equity holders, up 134% month over month, shows there’s demand.
Bitwise launched PAPY, an RWA vault on Morpho that lends AUSD deposits programmatically against a diversified basket of overcollateralized tokenized real-world assets.
Elsewhere, CBB published a postmortem on an equity perps arbitrage bot that made $10 million, which should be particularly useful for anyone interested in trying out the arbitrage game. Mippo shared a chart of the L2 wars showing dominance changing hands repeatedly in clean epochs. Things move fast in crypto. Yesterday’s winner is today’s loser. Metamask once completely dominated market share before losing it all. Phantom, the wallet darling of last cycle, is the new Metamask.
Metaplanet, sitting on 43,000 bitcoins, moved another 2,400 BTC worth roughly $186 million into Coinbase Prime inside three hours on Monday. There also seems to be some controversy around Metaplanet CEO Simon Gerovich’s options contract, which gives him a fixed percentage of Metaplanet shares rather than a fixed amount.
On the legal front, Judge McMahon ruled on the motions to dismiss in the Pump.fun class action in the Southern District of New York. The RICO claims and the unlicensed money-transmitting business allegations against Pump.fun and its founders survive. In prediction markets, Kalshi issued its first-ever lifetime trading ban to former U.S. Representative George Santos, along with a fine of more than $70,000, for market manipulation.
Solana began the week with good news. The Solana disinflation proposal passed by a hair after Kraken flipped from no to yes at the last minute. Mert Mumtaz reported making 500 calls in a few hours to drag the votes across the line. The frenzy on Robinhood Chain led Solana partisans to criticize Robinhood’s 30-cent gas fees, which prompted the observation that Solana’s are 10 cents and that nearly every structural problem applies to both.
Finally, security. Solana’s governance win was undercut by a bad few days for its neobanks. More than $600,000 was drained from user accounts at avici, and balances were reportedly emptied across multiple apps. Rain Cards, the infrastructure powering the majority of these neobanks, was rumored to be the root cause, with users of Tria and Solayer Pay affected.
Cronos, meanwhile, halted block production over the weekend to contain a $75 million exploit on Tectonic, a lending protocol that alone accounted for 46% of the chain’s DeFi TVL. Tectonic priced its own governance token off thin on-chain liquidity. It keeps happening because the same mistake keeps getting made.
Just before publication, Trezor released a heartbreaking update about the shipping hack from AUG 13, revealing an additional 67,000 affected customers in the U.S.
Stay safe out there.
-David Sencil