KVANTS DAILY NEWSLETTER - JUL 22, 2025

Today, leading financial institutions and corporations are deepening involvement in crypto and digital asset strategies, with JPMorgan considering crypto-backed loans, Western Union piloting stablecoin-based remittances, and Strategy launching a Bitcoin-pegged preferred stock. Coinbase expands regulated crypto derivatives in the US, while spot Bitcoin ETFs see a pullback after strong inflows, signaling shifting sentiment. ARK Invest pivots from crypto exchanges to an Ethereum treasury firm, reflecting evolving institutional priorities. Meanwhile, US House Republicans aim to cut the SEC's budget, potentially altering fintech regulation, and the Tornado Cash legal case raises critical questions about prosecutorial conduct in the decentralized finance sector.

JPMorgan exploring crypto-backed loans amid stablecoin push: FT

JPMorgan Chase is assessing the feasibility of offering loans backed by crypto assets such as Bitcoin and Ether with a decision possibly coming by 2026. This development follows ongoing industry interest in integrating digital asset collateral into traditional banking tools and comes as JPMorgan pursues stablecoin initiatives and reevaluates its approach to crypto exposure. Leadership at JPMorgan including CEO Jamie Dimon has previously shown skepticism on Bitcoin but shifting industry trends and regulatory clarity are prompting scrutiny of how digital assets can be folded into core banking functions. LINK

IMPORTANCE

Institutional engagement with digital asset-backed lending signals a significant pivot in risk modeling and collateral management for major United States banks. If JPMorgan advances on these plans it could accelerate the mainstreaming of crypto-backed finance while providing new efficiencies and products for high net worth and corporate clients. Such a move would also stimulate further market confidence in digital assets as legitimate collateral within regulated environments and could drive competitive responses from regional peers and global competitors.

Western Union Eyes Stablecoins as Remittance Giants Face Outward Pressure

Western Union is positioning itself to leverage stablecoins as part of its digital wallet offerings to accelerate cross-border remittances and offer clients more efficient value storage and currency exchange options. Leadership sees this as an opportunity to modernize existing infrastructure and foster partnerships that will support integration of blockchain technologies, responding to both evolving consumer needs and the competitive landscape shaped by regulatory updates like the GENIUS Act. LINK

IMPORTANCE

Western Union’s shift towards stablecoin integration marks a deep transformation for the cross border financial services sector. As one of the historical leaders in remittances, its adoption signals growing institutional confidence in crypto enabled payments and positions it as an established player able to absorb or outpace fintech disruptors through technological adaptation. This strategy expands beyond efficiency gains and includes regulatory alignment, cost reduction and new value propositions for underbanked populations in developing markets where remittance flows are crucial. Such moves have the potential to influence incumbents and policy makers globally to accelerate their own innovation cycles, potentially redefining sector benchmarks in digital asset adoption.

Strategy launches Bitcoin stock pegged at $100 to increase treasury

Strategy is debuting a new share class called Series A Perpetual Stretch Preferred Stock STRC via an initial public offering aimed at enhancing its treasury strategy. This offering is structured to function similarly to a synthetic stablecoin, providing investors with a dividend stock pegged at 100 dollars that funnels proceeds directly into expanding Bitcoin holdings and supporting working capital for the company. As the largest corporate Bitcoin holder globally, Strategy intends to use this mechanism to absorb more fiat capital and further increase its exposure to Bitcoin. LINK

IMPORTANCE

This move by Strategy is significant for institutional observers as it demonstrates an innovative fusion of corporate finance and crypto treasury management by directly linking new equity inflows to Bitcoin investment. The issuance of a preferred stock product mimicking the characteristics of a stablecoin challenges conventional approaches to balance sheet management and may set a precedent for other corporates with crypto ambitions. For the broader market, this offering could influence capital allocation trends among digital asset oriented companies and attract interest from investors who seek stablecoin like exposure within equity portfolios.

Coinbase Follows Kraken's Lead, Opens Perpetuals Trading for US Customers

Coinbase is making a significant push into the US crypto derivatives market by launching perpetual futures trading for domestic customers through its regulated affiliate Coinbase Financial Markets. This initiative introduces contracts with five year durations, competitive lower fees and 10x leverage for major assets like Bitcoin and Ether, aiming to lure traders who previously relied on offshore platforms. The venture sets Coinbase as a primary regulated venue for advanced crypto derivatives in the US, directly following strategic moves by competitors such as Kraken to offer similar products. LINK

IMPORTANCE

This development marks a pivotal shift in the US crypto trading landscape as major platforms like Coinbase begin to capture market share from less regulated offshore competitors by offering compliant derivatives products. Institutional and sophisticated retail investors now have a robust domestic alternative for leveraged crypto exposure without the counterparty and jurisdictional risks presented by offshore venues. As US regulatory clarity advances in the derivatives sector, this move enhances the legitimacy of digital asset markets and could catalyze sustained growth in trading volumes.

Spot Bitcoin ETFs break 12-day inflow streak amid ‘profit taking’

Spot Bitcoin exchange traded funds recorded a net outflow of 131.35 million dollars on Monday as a 12 day inflow streak came to an abrupt end. ARK Invest reported the largest daily outflow among the ETFs with 77.46 million dollars withdrawn while Grayscale and Fidelity also posted significant outflows. Bitwise and VanEck saw smaller negative movements and BlackRock did not register any net flows on the day. Investors appear to be engaging in profit taking after the ETFs previously attracted 6.6 billion dollars in new capital over the streak. LINK

IMPORTANCE

This reversal in ETF flow dynamics signals a potential shift in market sentiment among institutional and retail investors toward Bitcoin. After a considerable period of strong inflows which supported price levels and boosted overall confidence in spot ETFs the sudden outflow suggests reassessment of short term risk and potential repositioning. For asset managers and trading desks this development is critical as it may foreshadow softer demand or more volatile fund flows in response to macroeconomic cues or profit taking strategies. Close monitoring of flow continuity in these funds will be necessary as they serve as a barometer for mainstream Bitcoin adoption.

Cathie Wood sells Coinbase, Roblox shares for Tom Lee’s ETH firm

ARK Invest under Cathie Wood has significantly restructured its ETF portfolios by selling off more than 200 thousand shares of Coinbase and over 460 thousand shares of Roblox, reallocating capital toward acquiring a 1.5 percent stake in Bitmine Immersion Technologies. This Ethereum treasury company, chaired by Tom Lee of Fundstrat, now represents an important part of ARK Innovation ETF, Next Generation Internet ETF and Fintech Innovation ETF across all three funds with a combined 4.4 million share purchase valued at about 174 million dollars. Bitmine Immersion is known for plans to acquire and stake a sizable portion of the circulating Ethereum supply. LINK

IMPORTANCE

This portfolio reconfiguration by ARK Invest signals a leadership-driven view that Ethereum and its institutional-oriented treasury use cases are gaining traction over traditional equity plays in the crypto and gaming sectors. By pivoting from Coinbase, a prominent crypto exchange, and Roblox, a digital entertainment giant, to an Ethereum treasury firm, ARK appears to be anticipating a new wave of institutional adoption driven by Ethereum’s capabilities as a programmable financial layer. For institutional investors, this could mark the beginning of renewed capital flows into Ethereum-adjacent assets and a reconsideration of portfolio exposure away from equity proxies toward native blockchain infrastructure.

Republicans propose 7% leaner SEC budget compared to Biden’s era

United States House Republicans have advanced a funding plan to reduce the Securities and Exchange Commissions budget by seven percent and remove funding for the enforcement of a cyber incident disclosure regulation from the Biden administration. The plan, which was approved by a House Appropriations subcommittee, targets a fiscal year 2026 SEC budget of 2.1 billion dollars and an overall government funding reduction of eight percent, with lawmakers arguing that these cuts would address inefficient spending across key financial regulatory agencies. In addition to the SEC, the bill impacts multiple agencies, including the Treasury.LINK

IMPORTANCE

These Republican-proposed budget cuts signal a significant shift in regulatory priorities for US financial oversight and risk management. By reducing the SECs resources and specifically disabling enforcement of rapid corporate cyber incident disclosures, institutional stakeholders should anticipate an altered landscape for compliance and transparency requirements, impacting both public market participants and risk assessment frameworks. The move reflects growing partisan divides on regulatory expansion, raising the prospect of less aggressive federal oversight and potential uncertainty for digital asset markets and traditional capital markets alike.

Roman Storm could go for mistrial over scam victim’s testimony: Report

Roman Storm a cofounder of Tornado Cash is exploring the option of requesting a mistrial after a witness brought forward by prosecutors was revealed to have no direct connection to the crypto mixer platform. Legal representatives for Storm raised this issue with federal judge Katherine Polk Failla arguing that the testimony from Hanfeng Lin might constitute judicial error as the evidence presented may not be pertinent to the charges of money laundering conspiracy sanctions violations and operating an unlicensed business. LINK

IMPORTANCE

The questioning of witness testimony in this high profile case underscores growing scrutiny around prosecutorial methods and admissibility of evidence when targeting crypto infrastructure and its developers. Institutional stakeholders should note that the handling of this case will establish critical precedents for both legal frameworks and operational risks facing developers of decentralized privacy focused tools especially under United States jurisdiction.

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