The Coinbase's Conquest 🏆
Happy Thursday, Dispatchers! Welcome to this week's News Rollups.
There’s a new guest at the Wall Street and the whole finance world (both traditional and decentralised) is going crazy discussing the impact.
This could be one of the biggest moves pushing for crypto adoption.
In today's News Rollups edition, we examine:
How Coinbase's S&P 500 inclusion will bring crypto to millions
Growing rift at SEC as Crenshaw pushes back against pro-crypto policies
How Strategy's aggressive buying is making Bitcoin deflationary
What’s RWA tokenisation and how it is bridging TradFi and DeFi
Got questions about a hot crypto topic that you want help understanding? Ask your question using the form and our crypto experts may answer it along with a shoutout to your name in our weekly News Rollups.
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Q: Why is Coinbase’s inclusion in S&P 500 a big deal?
"First they fight you, then add you to the S&P 500," sums up Bernstein analysts' take on what's happening here. Do we agree? Well, with all that’s unfolded in the past week, it’d be difficult not to.
Coinbase will become the first pure-play crypto company in the index on May 19, replacing Discover Financial Services. Just months after being locked in "intense litigation" with the SEC (before the case was dropped under Trump), Coinbase is now joining the most prestigious club in American business alongside Apple, Amazon, and Berkshire Hathaway.
Why is this big? We are looking at the financial implications of this inclusion.
With roughly 0.1% weight in the index, Coinbase could see $9 billion in passive inflows from S&P 500-linked funds and another $7 billion from active funds, estimated Bernstein.
That’s not all. An average investor will also feel the impact.
"Crypto is about to be in everyone's 401k," CEO Brian Armstrong put it. With this, millions of regular Americans who've never bought crypto, will now have exposure through their retirement accounts. Your parents, teachers, and that friend who coaxed you into believing crypto was all a scam? They're all about to become inadvertent crypto investors.
For perspective, there's roughly $3 trillion in passive investments tracking the S&P 500. Even a tiny allocation means billions flowing indirectly into the crypto ecosystem.
Coinbase stock has jumped almost 30% after the announcement.
Q: What’s the infighting at the US Securities and Exchange Commission about?
Trump's crypto-friendly SEC and its sole Democratic commissioner Caroline Crenshaw, the agency's lone dissenting voice, are having a bit of an internal stand-off.
At the Monday SEC roundtable, Crenshaw pushed back at SEC Chair Paul Atkins’ words of praise for tokenisation, saying it all “seems a bit like the government picking winners and losers.” Her argument? When SEC should have remained as a “tech-neutral regulator, why is it our place to assess particular forms of blockchains as candidates for industry adoption?”
This follows her harsh criticism of the recent Ripple settlement, which slashed the company's penalty from $125 million to just $50 million. Crenshaw called it a "tremendous disservice to the investing public".
The Democrat does raise important questions around the direction of the SEC under Trump’s administration.
Trump's personal crypto ventures (his memecoin and family-run ventures) have become painful for his Republican peers, with Democrats staging walkouts from hearings and introducing the "MEME Act" to ban officials from profiting off crypto.
Read: The Crypto Bills’ Chaos 📃
What’s worrying for the industry is that Crenshaw, herself, doesn’t boast of an impressive track record with crypto. “These Commission actions are unsound and ahistorical,” were her words more than a year ago, when she dissented to SEC’s Bitcoin ETF approval.
What’s worse? With all this going on, the broader industry suffers. Partisan deadlock means hopes for clear rules keep getting pushed further away.
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Q: Is Bitcoin becoming deflationary? Why is that good?
"Strategy's holdings alone mean a -2.23% annual deflation rate — likely higher with other stable institutional holders," Ki Young Ju, CryptoQuant CEO, posted last week.
Bitcoin is already disinflationary by design - its issuance rate drops by half every four years through the halving. Strategy’s and other corporate Bitcoin treasuries’ aggressive buying has accelerated this. Strategy buys Bitcoin over multiple times faster than miners can produce it, effectively acting as a financial black hole for Bitcoin.
Translation: The circulating supply of Bitcoin that can actually trade is contracting. How does that help?
When large, patient holders like Strategy control more of the supply, there's less Bitcoin available for panic-selling during downturns, smoothing out the wild price swings that once defined crypto markets.
The Crypto Comic 🎭
Ethereum (~30%) has outperformed Bitcoin (~2.6%) and Solana (~12.2%)in the past one week in terms of price rise on the back of its recent updates including the long-awaited Pectra upgrade.
Dispatch Decoder 👨🏽🏫
What Is RWA Tokenisation?
"Today BlackRock’s BUIDL tokenised by Securitize reached the $1B mark and it is the largest tokenised asset in the industry besides stable coins,” said Carlos Domingo, CEO of Securitize.
Not just Securitize, even traditional finance giants including Morgan Stanley, JPMorgan and VanEck are jumping onto tokenisation bandwagon. Why?
Real World Asset (RWA) tokenisation is blockchain's bridge to the trillions locked in traditional markets. It's the process of converting physical and financial assets - from real estate to Treasury bills - into digital tokens that live on blockchains.
That Manhattan skyscraper? Now fractionally owned by thousands via blockchain. Those corporate bonds? Trading 24/7 with instant settlement.
The revolution is already underway. VanEck just launched its first RWA fund exposing Treasury bills across multiple blockchains.
Under the Radar 🔎
Trump family-linked firms have raked in $320 million from the TRUMP memecoin despite its 80%+ crash from its peak. While President Trump denied profiting personally, Chainalysis data shows creators netted massive fees as over 760,000 retail wallets – the vast majority of investors – lost money.
Where did the money go, then? Into thin air?
Trump’s token is primarily controlled by CIC Digital LLC and Fight Fight Fight LLC, entities tied to the president’s organisation that collectively own 80% of the supply.
Meanwhile, crypto whales are paying astronomical sums for a seat at Trump's dinner table. The top 25 "VIP" attendees on the leaderboard for the May 22 gala at Trump National Golf Club held an average of $4.8 million worth of TRUMP tokens to qualify.
Background checks are now underway for the 220 winners.
How does one describe all this? Here you go: "The most nakedly corrupt self-enrichment scheme in US presidential history." Well, that’s what Accountable.US called the $TRUMP token leaderboard.
That's it for this week's News Rollups. Until next Thursday, stay curious.
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