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Welcome to the On the Margin Newsletter, brought to you by Ben Strack and Casey Wagner. Here’s what you’ll find in today’s edition:

• What Trump said (and didn’t say) at Bitcoin 2024. 

• Grayscale’s second spot BTC fund is almost live, as the firm looks to play catch-up.  

• It may be FOMC week, but there’s a lot more going on. Don’t worry, we’ve got you covered.

Trump makes promises without saying much

Welcome back to another week of the On the Margin newsletter! 

I’m currently in recovery mode after a long and eventful weekend at the Bitcoin 2024 conference in Nashville. More on that on Blockworks.co soon. 

You probably saw the event’s headline news: Former President Donald Trump wants to create a bitcoin “stockpile,” and Sen. Cynthia Lummis, R-Wyo., has the legislation to try and make it happen. 

Trump addressed a crowd of roughly 10,000 (according to conference organizers) Saturday afternoon for about an hour. The former president took the stage an hour behind schedule, citing security concerns the Secret Service had to address. 

He rambled for 50 or so minutes, often drifting so far from crypto- and bitcoin-related topics that the event felt more like a Trump rally than a Bitcoin 2024 keynote address. (To name a few tangents: He denounced electric car regulation requirements, called Sen. Elizabeth Warren “Pocahontas” — bringing back the slur he’s used since 2017 — and claimed Biden’s team threatened to invoke the 25th amendment to force his resignation).

Among his many promises was a vow to fire SEC Chair Gary Gensler “on day one” — which, as we’ve covered in this newsletter, may not be possible. He also said he would commute the sentence of Silk Road creator Ross Ulbricht, who has been incarcerated since 2015. Trump has not addressed why he did not pardon or commute Ulbricht during his term as president, and his team has not responded to my request for comment.

Trump’s biggest promise of all on Saturday was to “keep 100% of all bitcoin the US government currently holds or acquires.” Though he did not specifically mention the DOJ or US Marshals Service, which periodically auction off seized cryptocurrencies, that is presumably what he meant. 

“As you know, most of the bitcoin currently held by the United States government was obtained through law enforcement action,” Trump said. “You know that they took it from you. Let's take that guy's life. Let's take his family. His house. His bitcoin.” 

He said nothing about buying 1 million BTC, which is what fellow presidential hopeful Robert F. Kennedy Jr. wants to do. But in the moments after Trump left the stage, Lummis emerged waving a stack of papers she said was a bill promising to do just that. 

“Here it is,” the senator said, holding up the bundle. “This is the Bitcoin Reserve Bill.” 

The bill, which has not yet made it to the Senate floor, seeks to have the US government acquire 1 million BTC — roughly 5% of the global supply. That BTC would only be sold to decrease national debt. 

“We will be debt-free because of bitcoin,” Lummis said. 

There was speculation that Lummis, who had appeared on the main stage at the conference just the day prior with Sen. Tim Scott, R-S.C., was originally supposed to introduce the bill ahead of Trump’s speech.

If I had to guess, the Trump campaign is happy keeping his platform vague and full of soundbites. Free Ulbricht, fire Gensler, mine more bitcoin in America, etc. It’s enough to garner broad industry support — and money — without getting too technical, which could risk alienating parts of the industry. 

Leave the legislation, which will surely never pass (at least this session) to Lummis.

— Casey Wagner

The trading volumes last week for crypto investment products, according to CoinShares — marking the highest level since May.  

Boosting this figure was the debut of nine US spot ether ETFs, which saw about $1.1 billion worth of volumes on their first day (July 23) alone.

Remember, volumes do not mean net inflows for those ETH funds. Just look at the $1.5 billion that poured out of the Grayscale Ethereum Trust. 

Even so, the ETH funds by BlackRock, Bitwise and Fidelity combined for net inflows of $927 million during the first four trading days.

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Grayscale is set to enter the US spot bitcoin ETF category…again.

The SEC on Friday cleared the 19b-4 proposal — filed by NYSE Arca — for the Grayscale Bitcoin Mini Trust. The agency is expected to soon allow the planned ETF’s registration statement to go “effective,” marking a final step before launch. 

The firm’s conversion of GBTC to an ETF was marred by outflows, even if Grayscale has been able to continue collecting a 1.5% fee on the roughly $18.4 billion currently in the trust.

But now Grayscale will look to gain market share in the category with the cheapest fund of its kind. At 0.15%, it is set to undercut all of its competitors — the lowest of which is Franklin Templeton’s BTC fund, at 0.19%.  

This competitive price matches the Grayscale Ethereum Mini Trust, which launched last week. That fund posted $164 million in its first four trading days, while the firm’s higher-priced (2.5%) Ethereum Trust watched $1.5 billion leave its coffers. 

That initial $164 million flow number likely tells us little about what the BTC version would see, given it’s a different asset altogether. Then, there’s the fact that the ETH Mini Trust came to market at the same time as its peers.

So while it’s not new for an asset manager to launch a cheaper version of a product it already offers, Grayscale’s upcoming trust has its work cut out.  

The Bitcoin Mini Trust is set to begin trading after US spot bitcoin ETFs already gained $17.6 billion of net inflows since January. Products by BlackRock and Fidelity have led the pack with positive flows of $19.7 billion and $10 billion, respectively. 

Though the price point of Grayscale’s Bitcoin Mini Trust is enough to attract certain investors, playing catch-up with those financial services powerhouses is no easy task. 

Ben Johnson, Morningstar’s head of asset management client solutions, previously summed up the challenge to Blockworks: “There are already abundant low-cost options with significant assets under management and oodles of liquidity — all of which offer exposure to the exact same asset.” 

Aside from the attractive price points for the bitcoin- and ether-focused mini trusts, the tickers Grayscale secured for each — BTC and ETH — are clutch. 

To the point, indeed, for investors looking to quickly allocate to a crypto offering via their brokerage account.

— Ben Strack

Fed week is here. Markets are banking on central bankers holding interest rates on Wednesday in a decision many are anticipating. But there are other figures to keep in mind. Here’s what we are watching: 

• We already know the likely outcome of this week’s FOMC meeting, so the key will be Fed Chair Jerome Powell’s press conference Wednesday afternoon. We’ll be looking to see how forcefully he does (or does not) hint at a September rate cut. If he gives no indication that rates will start to come down this fall, that’s going to be a negative for markets. 

• Lots of jobs data is coming this week: JOLTS on Tuesday, ADP employment report on Wednesday, initial claims report on Thursday and, of course, the monthly jobs report on Friday. A few things markets are looking for: downward trend in wages (wage inflation is a top concern for the Fed), softening in the labor market and the unemployment rate, which could increase fears of an economic slowdown. 

• It’s also a big week for earnings. Meta, Amazon, Apple and Coinbase are all slated for the coming days. Keep your eye on your inbox for a special pre-Coinbase On the Margin edition on Wednesday.

— Casey Wagner

• Bitcoin rose to just short of $70,000 Monday morning before sliding a bit. Its price was $67,375 at 2 pm ET, down about 1% from 24 hours prior.

• Crypto-focused asset manager 21Shares said Monday it made its US spot ETH ETF more transparent by integrating the Chainlink Proof of Reserve on Ethereum mainnet. Its move comes after Bitwise said it would publish the Ethereum addresses of all holdings of its ether product.  

• Several big public crypto companies are set to report Q2 earnings on Thursday — namely Coinbase, Marathon Digital, MicroStrategy and Galaxy Digital. Keep an eye on Blockworks.co (and this newsletter) for coverage.