Kalam Crypto #129: Rate cuts are here & Revolut to issue their own stablecoin

This week, the Fed surprised markets with a 50 bps rate cut, fintech giant Revolut revealed plans to issue its own stablecoin, the SEC approved BlackRock’s Bitcoin options trading, and CoinMENA announced a new partnership with Mesh.

16 Sep, 2024

CoinMENA Team

Author

“Commitment starts when motivation stops.”

Ahlan wa sahlan, and welcome to the 129th edition of CoinMENA’s weekly newsletter, Kalam Crypto! This week, the Fed surprised markets with a 50 bps rate cut, fintech giant Revolut revealed plans to issue its own stablecoin, the SEC approved BlackRock’s Bitcoin options trading, and CoinMENA announced a new partnership with Mesh. All that and more in this week's edition of Kalam Crypto!

Global News 🌍

The U.S. Federal Reserve cuts rates by 50 bps: After four years of the fastest interest rate hikes in history, the Fed has unexpectedly cut rates by 50 bps, exceeding analysts' expectations of a 25 bps cut. What does this mean for Bitcoin? Bitcoin, which historically thrives in low-interest-rate environments, has also proven resilient during high-interest-rate periods, surging 52% from $42,000 to $64,000 over the past four rate hikes since March 2022. This Fed decision signals continued money supply expansion to avoid default, positioning scarce assets like Bitcoin for substantial growth. Notably, Bitcoin is up 45% this year, while gold has risen 25%—the first time both have been the top-performing assets in the same year!

Revolut Stablecoin: Revolut, a London-based fintech company valued at $45 billion and recently granted a U.K. banking license, has announced plans to launch its own stablecoin. This move positions Revolut to enter the rapidly growing stablecoin market, which is driven by Tether’s dominance and lucrative business model. With Tether's market cap at $119 billion and $5.2 billion in profit during the first half of the year, stablecoins thrive in high-interest-rate environments. This profitability has attracted other major players, including PayPal’s PYUSD, and soon-to-launch Ripple’s RLUSD. As stablecoins generate income from interest on government debt, Revolut’s entry into the space highlights the increasing interest of Fintech in cryptocurrencies.

Lightning Round ⚡️

SEC approves BlackRock's spot bitcoin ETF options listing: This allows institutional investors and traders an alternative way to hedge their Bitcoin exposure through listed derivatives. The approval marks another step toward mainstream acceptance of cryptocurrency, following the earlier launch of Bitcoin ETFs.

BNY Mellon to custody Bitcoin: BNY Mellon, the largest U.S. custodian bank, has reportedly secured SEC approval to offer Bitcoin custody services.

Blog of The Week ✍️

BlackRock report calls bitcoin “A Unique Diversifier”: BlackRock’s latest report concludes “As the global investment community grapples with rising geopolitical tensions, concerns over the state of the U.S. debt and deficits, and increased political instability around the world, bitcoin may be seen as an increasingly unique diversifier against some of these fiscal, monetary, and geopolitical risk factors investors may face elsewhere in their portfolios.” To read more, check out the full report here.

Keep an eye on 👀

BTC & ETF ETF Flows Update: Last week, U.S. spot Bitcoin ETFs saw inflows of $397 million, acquiring over 6,500 BTC. Fidelity’s FBTC led with $138 million, followed by Ark Invest’s ARKB with $101.9 million, while Grayscale’s GBTC offloaded $28.9 million. In contrast, spot Ethereum ETFs experienced $26.2 million in outflows, with Grayscale’s ETHE shedding $46.4 million alone.

CoinMENA News 🗞️

🤝New Partnership Announcement: CoinMENA FZE Teams Up with Mesh to Optimize Crypto Onboarding in MENA!

We’re excited to share that we’ve partnered with Mesh, a global leader in seamless crypto connectivity, to further enhance deposit and purchase capabilities for our users in the MENA region. By integrating Mesh’s API solutions, this collaboration will streamline the onboarding experience, making crypto transactions more secure and user-friendly.