Welcome to the Forward Guidance newsletter, brought to you by Casey Wagner and Ben Strack. Here’s what you’ll find in today’s edition:

• Casey takes you through this week’s bevy of SEC headlines.

• Ben chatted with 21Shares’ Federico Brokate about BTC’s near-$100k milestone, and what’s next. 

• A peek at the data as markets continue to digest the post-election landscape.

Changes at the SEC start well ahead of Inauguration Day

As we mentioned in yesterday’s edition, this has been a busy week at the SEC. 

The headline news from the commission, if you will, was Chair Gary Gensler’s departure announcement. He said yesterday he would be resigning, effective 12 pm ET on Jan. 20, 2025 — the exact time President-elect Donald Trump is scheduled to be inaugurated. We’re not surprised, but we got a chuckle out of him unprecedentedly naming the exact time he would leave the post. 

And then today, fellow Democrat Commissioner Jaime Lizárraga announced he would also depart early on Inauguration Day, saying he wants to spend more time with his family as his wife battles breast cancer. We wish her and the Lizárraga family all the best.

On the legal front, one federal judge this week came to the same decision in two separate cases. Judge Reed O’Connor of the Northern District of Texas found the SEC had overstepped its authority and must vacate the Dealer Rule, adopted in February by a 3-2 commissioner vote. Republican Commissioners Hester Peirce and Mark Uyeda dissented against the Dealer Rule. 

The rulings were seen as a win for both the hedge fund and crypto industries, protecting companies and managers in both groups from what has been described as “severe and adverse” changes in policy. Under the rule, certain hedge funds and crypto traders and validators would have been considered “dealers,” a classification both groups found prohibitively strict. 

It looks like changes at the agency are coming even before Trump moves back to Washington. 

We wrote earlier in the week about how there was a chance the commissioner voting breakdown would remain the same even after Trump takes office. With two spots now up for grabs, we know this won’t be the case. 

No more than three commissioners can be from the same party, and with Gensler out we can all but guarantee a Republican will be in as the next chair. That means Lizárraga’s vacant spot will go to a Democrat or Independent. Typically in this case, the Democrats would submit names for Trump to consider. But we know the Trump Administration often veers from the conventional.  

I’m still skeptical, though, that we will see any pending litigation dismissed. Even if the SEC now swings Republican (and potentially more pro-crypto), its staff would have to ask the commissioners to dismiss a lawsuit. These are staffers that have worked on these cases, in many instances, from the beginning. 

As we enter this new era of the SEC, it’s important to remember that Gensler’s predecessor — Chair Jay Clayton, a Trump nominee — was the one who brought the Ripple case over XRP’s security status in 2020. He also brought an additional 79 crypto-related enforcement actions during his tenure, plus a separate action against Trump ally Elon Musk. Clayton is now headed to lead prosecution at the Southern District of New York, if Trump has his way. 

Despite Clayton’s track record, he’s largely praised by the industry as being pro-crypto. We know Trump wasn’t always a fan of the industry, so maybe he’s not the only one who can have a change of heart.

— Casey Wagner

The number of times the daily net inflows for US spot bitcoin ETFs has reached $1 billion. Thursday marked the fourth instance (and third time this month), with a majority ($608 million) flowing into BlackRock’s iShares Bitcoin Trust.

The spot ether ETFs are not experiencing the same type of investor interest, as a net $9 million left those funds yesterday. We’ve heard over and over (and it is clear) that these are assets with different narratives, and that more education around ETH is needed.

“While Ethereum's performance will likely correlate with bitcoin, its diminishing correlation opens opportunities for other majors like solana, which recently hit a new all-time high,” YouHodler markets chief Ruslan Lienkha said in a statement.

There might be ETFs holding SOL and other crypto assets (beyond BTC and ETH) soon enough.

Bitcoin hit about $99,500 overnight before dipping below $97,300 a few hours later. The asset’s price was right around $99,350 at 2 pm ET.

On the cusp of $100,000, what will happen after BTC hits that level? Or if it doesn’t break through that in the short term?

As you know by now, nobody knows for sure. But I caught up (again) with Federico Brokate, head of 21Shares’ US business. He also helped BlackRock launch the iShares Bitcoin Trust (IBIT) in January while he led iShares’ business strategy in the Americas. 

The main takeaways? Well for one, the six-figure mark represents “a psychological barrier for markets” and a price target investors have been eyeing since the last crypto bull run, Brokate explained.  

He noted, too, that BTC’s price last week quickly rose another 3-5% after hitting the $90,000 mark with enough volume — a scenario that could happen again at $100,000.

“If the barrier isn’t decisively broken by Thanksgiving, we could expect to see prices come down 15-20% — a correction that would test the $80,000 support level and wash out leveraged and low-conviction players,” Brokate told me. 

Reaching the six-figure level would mean “greater short-term volatility as orders are filled, options liquidate and liquidity providers fulfill ETF block order requests,” he said, adding: “It wouldn’t be surprising to see some drawdown in the coming months.”

Outside of BTC, Brokate noted that altcoin markets often surge after bitcoin establishes a price plateau. This comes as investors tend to rotate to what are viewed as “higher-risk, higher-reward opportunities.” Perhaps that happens in late Q1, or Q2, the 21Shares executive posed. 

While solana (SOL) just reached a new price peak at roughly $263, ether (ETH) remains about 32% off its November 2021 high. XRP was up about 65% from a week ago, as of 2 pm ET Friday.

Finally, Thanksgiving might mean more than turkey and football this year. After all, Brokate reminded, holiday gatherings are often a time investors discuss their investment journeys and gains, sparking curiosity.

Brokate recalled that in 2017, BTC hovered in the $6,000-to-$9,000 range before surging to about $16,000 after Thanksgiving.

He added: “We may see a similar move this year.” 

— Ben Strack

Happy Friday! It was a busy week as markets continued to digest the election and unpack what Donald Trump’s new cabinet picks could mean for the economy. Here’s a recap of the data we saw:

• Weekly jobless claims once again came in lower than expected at 213,000 vs. 220,000 for the week ended Nov. 16. This is now a seven-month low. Continuing claims however are now at a three-year high, signaling that while employers do not appear to be laying off large numbers, they are also not hiring at a high rate. Odds of a 25-basis point interest rate cut in December are now sitting at 52% — down from 61% a week ago, according to CME Group data. 

• The Federal Reserve Bank of Philadelphia’s regional manufacturing index declined in November, coming in at 5.5 vs. the expected level of 7. The softening comes after the latest Empire Manufacturing Survey, which covers the New York region, showed robust growth in the sector. The decline was disappointing; but again, it’s not a national figure, so take it with a grain of salt.

— Casey Wagner

• Cboe said Friday it is set to launch the first-ever cash-settled index options for spot bitcoin trading on Dec. 2. These will differ from the spot bitcoin ETF options launched this week, as they are to be based on an index tracking a basket of spot bitcoin ETFs.

• In the same week SOL reached a new all-time high, Bitwise took an initial step in filing to launch a solana ETF, joining VanEck, 21Shares and Canary Capital. In case you missed it, Blockworks’ Jack Kubinec chatted with Bitwise CEO Hunter Horsley. 

• Sui revealed a strategic partnership with the digital assets division of fund giant Franklin Templeton. The collaboration will focus on “supporting Sui ecosystem builders and deploying novel technologies leveraging the Sui blockchain protocol,” Sui Foundation wrote in a Friday blog post.