The Daily: Bitcoin ETFs record third-largest daily inflows, Trump win could impact Bitcoin less than Ethereum and more

Happy Wednesday! In today's newsletter, BlackRock's IBIT dominates as spot Bitcoin ETFs record their third-largest daily inflows, Bitwise CIO Matt Hougan says a Donald Trump election win would be more impactful for Ethereum than Bitcoin, liquid restaking protocol Swell switches to OP Stack for its Layer 2 and more.

Meanwhile, Kraken sheds "organizational layers" as board member Arjun Sethi steps up as co-CEO.

Let's get started.

Spot Bitcoin ETFs record $870 million in daily inflows, largest since June

BlackRock's IBIT led U.S. spot Bitcoin ETF inflows with $643 million added on Tuesday, contributing to a total of $870 million in daily net inflows — the largest since June and third-largest to date as bitcoin reapproached its record high of nearly $74,000.

• Fidelity's FBTC, Bitwise's BITB, Grayscale's BTC, VanEck's HODL and ARK/21Shares' ARKB also recorded inflows, while five other ETFs reported no flows and Grayscale's GBTC registered net outflows.
• Daily trading volume for the combined spot Bitcoin ETFs also soared to $4.7 billion, up from $3 billion on Monday and the most activity since August.
• IBIT generated $3.4 billion in trading volume alone, marking its highest level since March 14, when bitcoin was last at all-time highs.
• Bloomberg ETF senior analyst Eric Balchunas wrote on X that the large trading volume for IBIT was "a bit odd," as bitcoin was up 4% at the time and "typically ETF volume spikes in a downturn or crisis."
• "Occasionally, though, volume can spike if there is a FOMO-ing frenzy," he said. "Given the surge in price past few days, my guess is this is the latter, which means look for (more) big inflows this week."
• Meanwhile, U.S. spot Ethereum ETFs posted $7.6 million in net inflows on Tuesday, with BlackRock's ETHA attracting $13.6 million, while Grayscale's ETHE saw outflows of $6 million amid a total trading volume of $278 million.

Trump election win would be more impactful for Ethereum and altcoins than Bitcoin

Bitwise CIO Matt Hougan sees regulatory clarity as more crucial for Ethereum and altcoins than Bitcoin. A Donald Trump win could potentially spark a stronger rally for these assets.

• Hougan noted that Bitcoin already enjoys a clearer status as a commodity, making it less impacted by the election outcome, unlike Ethereum and other altcoins that face greater regulatory uncertainty.
• Rising Polymarket odds of a Republican sweep for the presidency, Senate and House could pave the way for passing a series of crypto-related bills, Presto analysts said Tuesday.
• However, regardless of the election results, Hougan expects a favorable environment for crypto in 2025, with continued institutional adoption sparked by a possible bitcoin price rally to $80,000 this year.

Swell switches to OP Stack to develop rollup, replacing Polygon CDK plan

Liquid restaking protocol Swell is transitioning its planned Layer 2 from Polygon CDK to Optimism's Superchain ecosystem, developing an optimistic rollup via the OP Stack.

• Swell's OP chain will use ether as the gas token and share a portion of its sequencer revenue with the Optimism Collective DAO, consistent with other Superchain Layer 2s like Coinbase's Base.
• Swell may receive a sizable grant from the Optimism Foundation for this migration as an OP Stack chain, similar to the one given to Kraken's Ink.
• The Layer 2 is currently in development, and a test network is expected soon, featuring a unique restaking feature, "proof of restake," to enhance security within the Superchain.

Chainlink unveils major upgrade key to expanding its use to 'thousands of blockchains'

Decentralized oracle network Chainlink unveiled a major platform upgrade at SmartCon 2024 on Wednesday, key to expanding its use to "thousands of blockchains."

• The Chainlink Runtime Environment (CRE) upgrade, currently available in early access, aims to meet the growing demand from financial institutions and web3, the project said.
• The CRE introduces a modular, composable architecture that allows developers to create customized workflows across blockchains, with tools tailored for capital markets to attract traditional finance into blockchain technology.
• Chainlink's phased rollout of the upgrade is designed to ensure an uninterrupted service for existing users, beginning with its Cross-Chain Interoperability Protocol to improve scalability.

Test token for Magic Eden's forthcoming airdrop crosses $6 million market cap

A supposed test token from the Solana-based NFT marketplace Magic Eden called TestME has reached a market cap of $6.2 million, according to DEX Screener.

• The TestME token helps Magic Eden verify the claims process for its upcoming ME utility token airdrop but wasn't meant to have any monetary value.
• However, TestME is tradable on the decentralized exchange Meteora, where users added liquidity and swapped it with SOL, USDC and USDT, causing it to reach an unexpected valuation and potentially indicating high user interest in ME's official launch.

In the next 24 hours

• Eurozone CPI inflation data are released at 6 a.m. ET on Thursday. U.S. PCE and jobless claims figures follow at 8:30 a.m.
• Telegram Builders Day kicks off in Dubai.

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