401(k)

Daily Updates:

• President Trump signed an executive order that will allow 401(k) plans – a popular retirement savings account used by most Americans – to invest in cryptocurrency, private equity, real estate, and other alternative assets. 
• This marks yet another watershed moment for the crypto industry in its bid towards mainstream adoption – as it opens the digital assets sector to a roughly $8.7T market. 
• As of now, most retirement portfolios in the US have been concentrated in stocks and bonds, as federal rules, such as the Employee Retirement Income Security Act of 1974, have prevented diversification into alternative assets that may be seen as more risky and less liquid. 
• Given the size of 401(k) plans, even a 1% allocation towards BTC would result in a capital injection of $87B, more than the ~$54B held by Spot BTC ETFs at current prices. 
• We’ve spoken in many reports that the launch of the Spot BTC ETFs has provided the Bitcoin market with a new, more sticky type of buyer – 401(k) plans provide another direct avenue of access to a similarly sticky means of long-term capital. 

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• BTC ticked higher on the news, moving up almost vertically from just under $115K to $116.6K and since then it has consolidated at the $117K mark. That dragged the whole crypto market with it, as ETH trades nearly 6% higher over the past 24 hours and just below the psychological $4K mark. 
• Access to 401(k) funds is likely to benefit BTC, ETH and perhaps SOL initially as these are the assets that already have their own Spot ETF products launched, however President Trump’s executive order does not specify any limits on what digital assets could be invested in which opens the door for the entire altcoin stack to benefit from the regulatory change: “Alternative assets, such as private equity, real estate, and digital assets, offer competitive returns and diversification benefits.”

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• Providing retirement plans access to Bitcoin and other digital assets dovetails many of the regulatory advancements President Trump’s administration has pushed for since his second term as President began: one month ago during “Crypto Week”, the GENIUS Act was signed into law, and more recently, the SEC announced “Project Crypto” with broad aims of making the US the central hub for tokenisation. 
• However, despite the regulatory tailwinds, demand for BTC optionality remains incredibly low, as seen in implied volatility levels. 7-day BTC options currently trade with an implied volatility of just 27% while sentiment is relatively neutral too, with the put-call skew of 7- and 14-day options between 0 and 1.4%. 
• Even looking out to the next three months, 90-day options only assign a small 0.57% premium towards OTM call options relative to equal tenor OTM puts. 

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• On Wall Street, the rally in US equities slowed down as the S&P 500 closed almost flat, while the Nasdaq-100 eked a small 0.3% gain. 
• Following the weaker-than-expected July jobs report, further fragilities in the labour market emerged yesterday as recurring applications for unemployment benefits surged to the highest since November 2021. 
• Continuing jobless claims, a proxy for the number of people continuing to receive benefits, rose by 38,000 to 1.97M in the week ending July 26, indicating a long-held view from Fed officials that “we are in a low hiring, low firing environment”. 

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• President Trump said he has nominated Stephen Miran, the Chairman of the Council of Economic Advisors, to temporarily serve in the vacated Fed seat left by Governor Adriana Kugler. According to the market entitled ‘Who will Trump announce as next Fed Chair in 2025?’ on Polymarket, Governor Christopher Waller is the top candidate to replace Chair Powell, whose term ends in May 2026. 

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• Fundamental Global, a Nasdaq-listed investment firm focused on financial services and technology, has filed an S-3 registration with the SEC to raise up to $5B through a shelf offering aimed at building an Ethereum treasury. Up to $4B may be raised via an at-the-market agreement with ThinkEquity, allowing for phased sales based on market conditions.
• This move follows a $200M private raise and coincides with the company’s rebrand to FG Nexus Inc., with plans to change its ticker to FGNX and FGNXP. CEO Kyle Cerminara said the firm aims to acquire a 10% stake in the Ethereum network.

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• Union Jack Oil, a UK-listed energy firm, plans to use natural gas from its West Newton site to power Bitcoin mining, targeting one of the UK’s first oil-to-crypto ventures, announced on Thursday in an operations report. The company aims to monetize previously untapped gas reserves by generating electricity on-site, bypassing infrastructure delays.
• In partnership with Rathlin Energy and Texas-based 360 Energy, the project will deploy mobile mining units using 360’s In-Field Computing technology. West Newton, discovered in 2019, is one of the UK’s largest onshore gas finds, but remains undeveloped due to regulatory setbacks.

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• Pump.fun has announced today the launch of the Glass Full Foundation (GFF), a new initiative aimed at accelerating the growth of community-led projects within its ecosystem. 
• The Foundation will inject significant liquidity into selected tokens, with a focus on supporting the most organic, engaged, and promising communities. 

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• Swiss  Bank Sygnum, the world's first regulated digital asset bank, has announced today its SUI token offering for institutional clients, including custody and trading services, with staking and SUI asset-backed loans to follow.

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• Chainlink has launched the Chainlink Reserve, a strategic onchain fund accumulating LINK tokens from both offchain enterprise payments and onchain service revenue.
• Over $1M in LINK has already been collected, with growth expected to continue as demand for Chainlink’s services increases and more revenue is programmatically converted via payment abstraction. No withdrawals are planned for several years to support the network’s long-term accumulation.

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• On August 7, Ripple announced it will acquire stablecoin payments platform Rail for $200M, aiming to enhance its stablecoin infrastructure and expand its payments capabilities, including virtual accounts and automated back-office processes. The deal is expected to close in Q4 pending regulatory approval.

This Week’s Calendar:

Charts of the Day:

Figure 1. BTC at-the-money implied volatility across selected tenors. Source: Deribit, Block Scholes

Figure 2. ETH at-the-money implied volatility across selected tenors. Source: Deribit, Block Scholes

Figure 3. BTC 25-delta put-call skew ratio across selected tenors. Source: Deribit, Block Scholes

Figure 4. ETH 25-delta put-call skew ratio across selected tenors. Source: Deribit, Block Scholes