Welcome back! For those of you not sweating it out in Brooklyn with us, don’t worry, we’ll recap the highlights. 

Casey has the lowdown on what today’s most high-profile speaker had to say while Ben unpacks the talk around crypto ETFs. Here goes:

Adams talks crypto on primary day

While Andrew Cuomo and Zohran Mamdani battled it out in the New York Democratic mayoral primary, the current mayor spent the morning in Brooklyn. 

Eric Adams, fresh off hosting Gracie Mansion’s first crypto summit, spoke at Permissionless IV Tuesday. 

“We will witness an evolution in how we’re paying for plenty of services,” Adams said during a fireside chat. “New York needs to lead the way. We’re the financial capital of the globe and we must be part of that evolution.” 

Adams’ Permissionless panel was titled “Making NYC the Crypto Capital of the World.” It’s an ambition that’s not new, but it has been recently dusted off. 

Back when Adams was running, he said he’d take his first paychecks in crypto — a plan the city’s payroll administrator was unable to execute. Instead, the mayor said he immediately invested his earnings into bitcoin and ETH. Think of it like a direct deposit into his Coinbase account. 

Since then, though, Adams’ platform has been heavy on the “anti-rat” and light on the  “pro-crypto.” 

Adams’ term ends this year. He’s running for a second (this time as an independent), though his chances of winning seem slim. 

I’ll give you some polling data, but take it with a grain of salt; polls are not crystal balls.

In a hypothetical race between Adams, Republican candidate Curtis Sliwa and Democratic hopeful Cuomo, Adams would capture 11% of the vote, according to polling from the Manhattan Institute. Replace Cuomo with Mamdani, though, and Adams’ chances increase to 19%. 

On an anecdotal note: When Adams said “during my next term,” on stage today, there were several chuckles and scoffs from the audience. 

Regardless, Adams said Tuesday he’ll spend the next four years focused on his crypto agenda. 

Cuomo, who served as New York’s governor when the state unrolled the BitLicense, “dismantled and destroyed the industry,” he told the crowd at Permissionless. 

The BitLicense — and much of the crypto industry’s distaste for the regulatory regime — was a major topic of Adams’ crypto summit last month. The mayor’s ability (or lack thereof) to repeal a state-level policy did not come up. 

Whether you see Adams’ recent crypto push as a last-ditch fundraising effort or a legitimate ideological interest, there’s no denying that crypto is playing an increasingly influential role in US politics. 

We saw it in the last presidential election and I’m willing to bet we’ll see it again come the midterms. Buckle up! 

A quick note for our NYC readers: Registered Democrats are eligible to vote in today’s primary, and polls close at 9 pm ET tonight.

— Casey Wagner

The Permissionless crowd might not be quite as interested in ETFs as the folks who attend other industry events. Like the Digital Asset Summit, for example. 

Still, Bloomberg Intelligence analyst James Seyffart and Marinade Chief Commercial Officer Hadley Stern touched on which products could come to market next and preserve decentralization where possible.

Seyffart noted the SEC’s July 2 deadline to rule on Grayscale’s proposal to convert its Digital Large Cap Fund (GDLC) to an ETF. 

While more than 90% of the fund’s assets are allocated to bitcoin and ETH, it also holds XRP, solana (SOL) and cardano (ADA).

Bitwise is also looking to convert its BITW crypto index fund. And Hashdex is vying to add assets to its Nasdaq Crypto Index US ETF (NCIQ), which currently only holds BTC and ETH. 

The SEC could decide that XRP, SOL, ADA, etc. represent such a small amount of the index that it’s going to let the products through, Seyffart argued. Or the agency could choose to first develop a comprehensive set of rules. 

“If they’re not approved on this first date, it’ll only be because the SEC isn’t ready with a full framework,” Seyffart added. 

Such a framework could include rules around what assets are allowed in the ETF wrapper based on CFTC-regulated futures contract availability, size of market cap, etc.  

Either way though, Seyffart essentially views crypto index ETF approval (and the agency greenlighting various other single-asset altcoin funds) as a “done deal” in 2025. 

When it comes to ETFs being allowed to stake their holdings (not currently allowed in US ETH funds), Seyffart said those approvals could come by this summer. He expects spot solana ETFs will be allowed to stake their SOL out of the gate, if and when approved.  

“How much they can stake and what the yields are and how it will work, that’s unknown at this point,” he added. 

Perhaps more relevant to the crypto-native crowd was Stern’s concern that solana ETFs could spur centralization of validators. The goal, he said, is to avoid a situation where a bunch of those ETFs use Coinbase, for example, as a staking provider — with the SOL locked up there.

Fund manager Canary Capital named Marinade Select as the staking provider for its proposed solana ETF.

Stern noted: “In this marriage of DeFi and TradFi, we’ve just got to make sure we’re mindful of unintended consequences of big business coming in.”

— Ben Strack