On June 30, Robinhood’s CEO Vlad Tenev, at an extravagant promotional event in Cannes, introduced the company’s tokenized stocks product. This included presenting EU customers with more than 200 U.S. public equities and interests in private firms such as OpenAI and SpaceX as tokens on Arbitrum. Alongside this, Robinhood launched a range of other crypto products like perpetual trading, staking, and its own Ethereum Layer 2 network.

Tenev described the OpenAI and SpaceX tokens as a “seed for something much bigger”, with the goal to bring more private companies into the tokenization movement. However, OpenAI rejected the action, stating it did not approve any token representing its stock. OpenAI, directed by Sam Altman, advised investors to examine official filings before purchasing these instruments.

Private equity tokenization often lacks essential rights like company consent and right of first refusal, as Robinhood observed. Despite the existing private market liquidity for firms like OpenAI and SpaceX, Bernstein analysts note a high demand for tokenizing less liquid private assets.

“We believe Robinhood garnered sufficient attention and marketing for the concept of tokenization, which was the primary purpose behind the product launch,” said Chhugani. “It will continue to refine the product as it strives to construct a marketplace for listed and unlisted equities – globally and in the U.S. when the regulatory framework is prepared.”

Robinhood is now among companies such as Bybit, Kraken, and Gate in offering tokenized shares to non-U.S. investors.

The analysts believe that supportive signals from SEC and regulatory clarity on equity tokenization will expand access for investors. They predict a more relaxed regulatory approach for private companies to bring liquidity to their equity through blockchain-based tokens. As the GENIUS Act related to stablecoins progresses, focus will shift to the CLARITY Act, which defines token securities vs. token commodities and lets platforms like Robinhood and Coinbase to trade both under CFTC and SEC supervision.

These developments suggest that equity tokenization is set to progress, irrespective of the current market structure and regulations.

Robinhood earlier this year made a case to the SEC that tokenizing real-world assets can enhance settlement, transparency, and cost-effectiveness. Robinhood called for clear, unified rules that treat tokenized and traditional assets equally. It also recommended that broker-dealers should be permitted to custody both, acknowledging tokens as “allowable assets”.

Gautam Chhugani, analyst at Bernstein, retains long positions in various cryptocurrencies. Certain affiliates of Bernstein act as market makers or liquidity providers in the equity securities of Robinhood and Coinbase.

Disclaimer: This article provides information for informational purposes only. It does not constitute legal, tax, investment, financial, or other advice.

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The investment management firm sold a total of 124,892 Coinbase shares on Monday, as stated in its latest trading report. In detail, the ARK Innovation ETF (ARKK) let go of 77,956 Coinbase shares, the ARK Next Generation Internet ETF (ARKW) disposed of 29,802 shares, and the ARK Fintech innovation ETF (ARKF) sold 17,134 shares of the cryptocurrency exchange.

Despite the sell-off, Coinbase’s (COIN) shares closed at $350.49 on Monday, marking a 0.83% drop, according to Yahoo Finance data. However, the crypto exchange’s stock has seen a significant rise in the past month, up by 42.12%, and a 41.16% increase year-to-date. COIN’s highest daily close, at $375.07, was recorded on June 26 since its public debut in April 2021, largely driven by Circle’s public market introduction.

Furthermore, analysts from the research and brokerage firm Bernstein have raised their price target for Coinbase to $510 from $310. This revision is based on the improved earnings outlook, emerging growth factors, and a refreshed valuation framework.

Disclaimer: The Block is a media outlet that operates independently to deliver news, research, and data. Foresight Ventures, a majority investor of The Block as of November 2023, also invests in other crypto companies. Foresight Ventures is an anchor LP for the crypto exchange Bitget. The Block continues to provide objective, impactful, and timely information about the crypto industry. This article is purely informational and not intended as legal, tax, investment, financial, or other advice.

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In today’s digest, U.S. Bitcoin ETFs marked their biggest daily net inflows in six weeks, Solana pulled a contentious ad in the wake of community outrage, Cronos is prepared to reissue 70 billion previously burned CRO tokens, and more. Furthermore, the GLIF protocol unveiled its governance token by distributing 94 million GLF in an airdrop, aiming to extend beyond Filecoin.

U.S. Bitcoin ETFs reported net inflows of $274.6 million on Monday, marking the highest daily figure in six weeks. This followed five successive weeks of net outflows, which stripped over $5 billion from Bitcoin ETFs, reducing their cumulative all-time net inflows to $35.9 billion.

Rachael Lucas, a crypto analyst at BTC Markets, linked this shift to increased confidence resulting from Bitcoin’s price stability and renewed institutional interest. She also pointed out that quarter-end institutional portfolio rebalancing and rising demand for lower-fee ETFs played a part in the positive flows.

Solana has withdrawn a promotional video for its forthcoming Accelerate conference following a backlash from the crypto community. The video, which is still being circulated, was criticized for appearing to make light of gender issues and was seen by some as anti-queer.

A governance proposal by Cronos, a Layer 1 blockchain from crypto exchange Crypto.com, to reissue 70 billion previously burned CRO tokens was approved, returning the total supply to its original cap of 100 billion. However, several large Crypto.com-affiliated validators appeared to have tipped the vote in favor of approval, leading to accusations of centralization and manipulation.

Web3 workflow protocol developer Halliday has secured $20 million in a Series A round led by a16z crypto. With the new funding, Halliday plans to grow its team and continue developing its workflow protocol and Halliday Payments application.

Analysts at Bernstein contend that the current crypto market cycle is still in its early stages and has further to go, given a more crypto-friendly U.S. regulatory environment. They predict Bitcoin to reach a cycle peak of $200,000 by the end of 2025.

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On Monday, Bernstein began covering the digital asset exchange, assigning it an outperform rating and a $310 price target. Despite a 2% fall to $185.20 in early trading, the overall outlook remains positive.

While the report acknowledges that regulatory clarity will inevitably introduce more competition from fintech firms, brokers, and banks, it also predicts a “strong bull market and increasing U.S. onshore dominance” to balance out any market share and pricing pressures. This forecast was given by a team of analysts led by Gautam Chhugani.

The current administration under President Donald Trump is creating an encouraging regulatory scene for digital assets, vowing to transform the U.S. into the “crypto capital of the world”. The Securities and Exchange Commission (SEC) has established a new crypto task force, headed by Commissioner Hester Peirce, to draft fresh regulations for the sector.

The Bernstein report commends Coinbase for its efforts to diversify beyond trading. The exchange now significantly contributes to the U.S. dollar stablecoins market and offers crypto yield services, like staking. The report anticipates that Coinbase will increase its non-trading revenues by an estimated 31% compound annual growth rate (CAGR) from 2024 to 2026, providing a “strong balance to the cyclicality of trading revenues”.

Earlier this month, Coinbase secured registration with the Financial Intelligence Unit (FIU), setting the stage for its re-entry into the Indian market, as reported in a company blog post.

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“A convergence of White House support, Republican control of both houses, and crypto-friendly heads of agencies such as the SEC and CFTC have created a ‘perfect storm’, providing a powerful boost for stablecoin regulation to pass this year,” said the Bernstein analysts. They opined that the new administration’s presence in the White House sets the stage for an environment where stablecoin legislation passing in the U.S. Congress becomes increasingly likely, potentially triggering significant engagement from traditional financial services companies.

Despite more economical payment methods for retail debit transactions, the Bernstein analysts believe credit card payments present a valuable opportunity for stablecoin integration. They underscored the potential in cross-border remittances and B2B use cases, pointing out that the existing correspondent banking system, a relic from the 20th century, is plagued by numerous inefficiencies, including high costs, delays, limited data flow, and absence of programmability.

“Stablecoins primarily function as the settlement currency of the crypto economy today – they play a key role in trading pairs on exchanges or lending-based applications on-chain. However, we are noticing emerging use cases beyond crypto in global remittance and cross-border B2B,” explained the Bernstein analysts. They also mentioned that stablecoin issuers are among the largest global holders of U.S. Treasurys at present, a factor they believe will speed up the prioritization of stablecoin regulation at a national level.

“Given that 99% of stablecoins are denominated in U.S. dollars, they bolster dollar dominance in the global on-chain economy. Moreover, the solid foundation of float income economics encourages partnerships with fintechs, leading to a powerful distribution mechanism for stablecoins,” they concluded.

The analysts believe AI agent-driven payments demonstrate potential as a long-term application for stablecoins, though they noted that credit card payment companies already have a robust infrastructure for this purpose.

Disclaimer: This article is for informational purposes only. It is not intended as legal, tax, investment, financial, or other advice. Foresight Ventures, a majority investor in The Block as of November 2023, also invests in other crypto companies. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently, delivering objective, impactful, and timely information about the crypto industry.

The post Harnessing the Perfect Storm: U.S. Stablecoin Regulation Could Accelerate in 2025, Bernstein Analysts Predict appeared first on Crypto Market Insights: Dive In with CryptoUpdate.io.

The analysts trace the beginning of this bull market to the rising possibility of spot Bitcoin exchange-traded fund (ETF) approvals in the U.S. This development pushed Bitcoin from $25,000 to $46,000 by the time the funds launched on January 11, 2024.

As per Bernstein’s view, the successful inflow into these ETFs, which had not been priced in, drove Bitcoin to a record high of approximately $74,000, after which it took a several-month hiatus. The subsequent boost came from pro-crypto Donald Trump’s victory in the U.S. presidential election in November. Trump’s promise to transform the U.S into the “crypto capital of the world” and establish a favorable digital asset regulatory framework saw Bitcoin hit a new all-time high of approximately $109,000 on his Inauguration Day.

In a note to clients on Monday, Gautam Chhugani, leading the analyst team, wrote, “The next leg of the Bitcoin bull market is bracing itself, backed by several positive catalysts. We believe that the Crypto Task Force, under the guidance of David Sacks, is committed to establishing the National Bitcoin reserve as directed by the President.”

The analysts believe that such a Bitcoin reserve could be funded by the Federal Reserve or Treasury, although this would necessitate legislative approval and would potentially trigger swift repricing of the cryptocurrency. Furthermore, the Bitcoin seized by the U.S. government, currently valued at around $20 billion, could be added to the reserve, possibly initiating a global competition among sovereign states.

The Bernstein team also highlighted additional catalysts for the next Bitcoin bull market phase. These include notable filings with the Securities and Exchange Commission and recent major investments in Bitcoin ETFs. They noted Strategy’s (formerly MicroStrategy) latest $742 million Bitcoin purchase, substantial year-to-date spot Bitcoin ETF inflows, and the SEC’s repeal of SAB 121, enabling crypto custody by banks.

The analysts concluded, “The combined adoption by banks, institutional investors, corporations, and potentially sovereigns positions Bitcoin as a significant rival to gold. With Bitcoin valued at $2 trillion market value versus $18 trillion for proven gold reserves, we see an asymmetric upside for Bitcoin.”

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