Defend Your Right to Smoke

Daily Updates

• Bloomberg has reported that JPMorgan.is planning to let its trading and wealth-management clients use shares of Bitcoin ETFs as collateral against loans, starting with shares of BlackRock’s iShares Bitcoin Trust (IBIT) ETF. 
• According to the same report, the bank will also begin “taking wealth-management clients’ crypto holdings into account when assessing their overall net worth and liquid assets”.
• Jamie Dimon, CEO of JPMorgan recently said that he’s “not a fan” of Bitcoin, but stated: “I don’t think we should smoke, but I defend your right to smoke. I defend your right to buy Bitcoin”. 

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• Despite some Fed officials and Jerome Powell in the May FOMC press conference recently championing the idea that weak soft data has not yet translated into hard data, two data releases out of the US yesterday suggest otherwise.
• Private-sector hiring decelerated to the slowest pace since March 2023 according to the ADP Employment report, as payrolls rose by only 37,000 in May – far below the expected 100,000 jobs gain. 
• Chief economist at ADP, Nela Richardson, said in a statement that “after a strong start to the year, hiring is losing momentum”, as anxiety around President Trump’s economic policies seem to be weighing on business decisions. The ADP data comes after recent JOLTS data for April showed an increasing layoff rate and lower quits rate – indicating weakening worker confidence. 
• President Trump was also quick to attack Chair Powell following the ADP report. On his Truth Social platform, the president posted “ADP NUMBER OUT!!! “Too Late” Powell must now LOWER THE RATE. He is unbelievable!!! Europe has lowered NINE TIMES!”

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• Secondly, in another sign of how President Trump’s tariff policy uncertainty may be weighing on economic data, the Institute for Supply Management's Services PMI dropped 1.7 points to 49.9 in May, where values above 50 indicate an expansion in services. May's data marks only the fourth time the services sector has fallen into contraction in the past five years.
• The New orders index saw its steepest contraction since late 2022 and the prices-paid index jumped to 68.7, the highest level since November 2022 – indicating service providers are also facing higher costs.
• Chair of the ISM survey committee, Steve Miller, said in a statement that the overall index “is not indicative of a severe contraction, but rather uncertainty that is being expressed broadly among ISM Services Business Survey panelists”. 

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• US equities (as measured by the S&P 500) ended the day flat, though treasury yields slid across the yield curve as traders continued to price in two rate cuts from the Fed before the year end. Both the two-year treasury yield, which is most sensitive to changes to Fed policy, and the 10Y tenor fell by 9bps to 3.87% and 4.37% (its lowest level since May 9), respectively. 

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• BTC trades lower at $104.6K over the past 24 hours amidst the weaker-than-expected economic data. BTC has led most of the crypto market down with it – ETH is down -1.3% over the past day, while XRP and SOL extend their losses to beyond 2%. Amongst the top 10 cryptocurrencies by market cap, the only token that is up on the day is TRX – the TRON network’s native cryptocurrency. According to data from Artemis, the TRON network has been generating more daily fees than both Solana and the Ethereum mainnet since mid-February this year.

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• Circle sold 34M shares at $31 each to institutional investors on Wednesday, raising $1.1B, ahead of Thursday's public NYSE debut under the symbol CRCL.
• This price surpassed earlier projections of 24–32M shares at $24–$28, reflecting strong investor demand before going live.

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• Coinbase has introduced wrapped tokens cbXRP and cbDOGE on its Base Layer 2, enabling XRP and Dogecoin to be used across Base’s DeFi applications. This follows the successful rollout of cbBTC, in September last year.
• Each token is fully collateralised, backed 1:1 by XRP and DOGE held securely in Coinbase’s custody.

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• Sui has entered a partnership with Dubai’s Virtual Assets Regulatory Authority (VARA) to advance Web3 development and nurture early-stage ventures leveraging the Sui blockchain or operating in Dubai’s virtual asset sector.
• The collaboration aims to develop regional talent and position Dubai as a global center for blockchain innovation and investment.

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• The SEC’s Division of Corporation Finance clarified its view on “Protocol Staking Activities” last Thursday, stating that they “do not involve the offer and sale of securities within the meaning of Section 2(a)(1) of the Securities Act of 1933 (the ‘Securities Act’) or Section 3(a)(10) of the Securities Exchange Act of 1934 (the ‘Exchange Act’).”
• Further, they clarified that “participants in Protocol Staking Activities do not need to register with the Commission transactions under the Securities Act”.
• This is a far cry from the regulation-by-enforcement approach taken by the SEC under its previous Chair, crypto-hawk Gary Gensler, and may allow for a far wider provision of crypto-staking services within the US.

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• Webus International (NASDAQ: WETO), a China based mobility service company, has partnered with investment adviser Samara Alpha Management LLC, filing a Form 6-K with the SEC outlining their intent to set up a $300M XRP-focused digital asset treasury.

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