Bitcoin Climbs on Weakening Labor Data; Blockchain Association Defends GENIUS Act

Bitcoin and Ether Surge on Economic Data

• 📈 Bitcoin and Ether saw significant gains, with Bitcoin climbing nearly 4% to $17,000 and Ether rising 5%.
• 📉 These increases followed the release of ADP private payroll data, which showed the biggest decline in over two years, signaling a weakening labor market.
• ⚠️ The US government shutdown is compounding uncertainty by pausing some economic data releases, including the crucial September jobs report.

Crypto Miner Performance and AI Diversification

• 📊 Bitcoin mining companies that have pivoted to Artificial Intelligence (AI) are outperforming pure-play mining names, according to JP Morgan.
• 💡 Companies exploring High-Performance Computing (HPC) operations are leading this trend, driven by growing AI demand and shrinking mining rewards.
• 💰 The aggregate market cap of these diversified miners has grown faster than Bitcoin for six consecutive months.

SEC and Custody for State Trusts

• 🏛️ The SEC is paving the way for state trusts to act as crypto custodians.
• ✅ The agency stated it would not recommend enforcement action against advisers allowing crypto custody through certain state trust companies, provided specific criteria are met.
• ⚠️ SEC Commissioner Hester Pur noted the no-action letter's scope is limited to client crypto assets held by registered advisers or crypto asset investments of regulated funds.

Tornado Cash Co-Founder's Legal Defense

• ⚖️ The co-founder of Tornado Cash, Roman Storm, is seeking dismissal of conspiracy charges.
• 🚫 His legal team argues there's insufficient evidence that he actively assisted bad actors using the crypto mixer.
• 📰 The Department of Justice previously alleged Storm knowingly operated a business that handled criminal proceeds, including those tied to the Lazarus Group.

Blockchain Association Defends GENIUS Act

• 📜 The Blockchain Association sent a letter to congressional leaders defending the GENIUS Act, a stablecoin bill enacted in July.
• 🗣️ CEO Summer Mersinger pushed back against rhetoric from large institutions seeking to reopen or alter the law, emphasizing it is now settled law.
• 🚀 Reopening the act, she argued, would undermine US leadership, drive innovation overseas, and remove crucial legal clarity for the industry.

Stablecoin Rewards and Banking Competition

• 💰 Mersinger addressed concerns about stablecoin rewards, stating there is no evidence they cause a flight of deposits from community banks.
• 🏦 She characterized the opposition from banks as a competitive issue, suggesting banks should offer better interest rates on deposits to compete with the approximately 4% rewards offered on stable coins.
• 💡 The focus, she stated, should be on what is best for consumers, who benefit from higher rewards on stable coin holdings.

Optimism for Crypto Market Structure Legislation

• 🤝 Mersinger expressed optimism for comprehensive crypto market structure legislation, citing bipartisan efforts in both the House and Senate.
• 🌐 The goal is to provide legal clarity to keep innovation within the United States rather than pushing it offshore.
• 🤝 Recent joint efforts between the SEC and CFTC on regulatory harmonization are seen as a positive development for providing certainty and fostering innovation.