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  • Trump Crypto Firm Under Fire for Saudi Stake in New Bank

    Trump Crypto Firm Under Fire for Saudi Stake in New Bank

    World Liberty Financial Secures Preliminary Approval for National Trust Bank

    A cryptocurrency venture with ties to former President Donald Trump, World Liberty Financial, is moving forward with plans to establish a federally chartered national trust bank. The Office of the Comptroller of the Currency (OCC) granted preliminary conditional approval for the venture earlier this month.

    An entity reportedly linked to Sheikh Tahnoon bin Zayed al Nahyan and his co-investors holds a significant 49% stake in the holding company for World Liberty Financial, representing the largest ownership share within that structure.

    Sheikh Tahnoon and Co-Investors Own Majority Stake in Holding Company

    Sheikh Tahnoon bin Zayed al Nahyan, who also serves as the UAE’s national security adviser, along with co-investors, collectively own 49% of WLTC Holdings. This entity serves as the holding company for World Liberty Financial.

    The proposed bank is slated to handle the issuance, redemption, and safeguarding of USD1, a stablecoin backed by the U.S. dollar that World Liberty launched last year. This initiative aims to integrate World Liberty’s stablecoin operations with a federally chartered trust bank.

    OCC Approval is Preliminary and Conditional

    It is important to note that the OCC’s recent action is a preliminary and conditional approval, not a final banking charter. The approval pertains to World Liberty Financial’s proposal to establish a federally chartered national trust bank.

    The bank’s intended functions are to manage the issuance, redemption, and safeguarding of USD1. The conditional approval does not constitute a final charter.

    Significant Foreign Investment in Proposed Bank Structure

    According to individuals familiar with the matter who spoke to The Wall Street Journal, an entity connected to Sheikh Tahnoon bin Zayed al Nahyan and his co-investors possesses the largest stake, at 49%, in World Liberty’s banking holding company. The Journal had previously reported that Sheikh Tahnoon backed a $500 million investment in World Liberty Financial last year, in exchange for a 49% equity stake in the company.

    This reported holding company stake positions an entity associated with Sheikh Tahnoon and his co-investors within the ownership framework of the proposed bank.

    Sheikh Tahnoon bin Zayed al Nahyan is the national security adviser of the United Arab Emirates and the brother of the country’s president. He oversees a vast business empire estimated to be worth over $1.3 trillion, funded by both his personal wealth and state resources, according to The Journal.

    Expansion of Business Ties with Foreign Official

    This new venture signifies an expansion of the business relationship between the Trump-linked cryptocurrency company and a prominent foreign government official, as reported by The Journal. World Liberty Financial is pursuing the establishment of a proposed bank whose holding company ownership includes an entity linked to Sheikh Tahnoon and his co-investors.

    The OCC’s preliminary conditional approval, coupled with the reported ownership structure, are key components of this proposed venture. The bank’s planned role is directly tied to the issuance, redemption, and safeguarding of USD1.

    The approval remains in its preliminary and conditional phase. World Liberty Financial’s proposed bank has not yet received its final charter. For the time being, the bank’s stated purpose is to issue, redeem, and safeguard USD1.

  • Major Banks Reportedly Exploring Stablecoin Issuance and Blockchain Networks

    Major Banks Reportedly Exploring Stablecoin Issuance and Blockchain Networks

    Major financial institutions are reportedly exploring or advancing plans for stablecoin issuance and the development of new blockchain networks, a move that could significantly alter the competitive landscape for existing crypto-native issuers like Circle and Coinbase. These developments coincide with ongoing legislative efforts in the U.S., such as the CLARITY Act, which aims to establish a regulatory framework for digital assets.

    Bank Initiatives and Market Reaction

    Recent reports indicate that several prominent banks, including JPMorgan Chase, Bank of America, Wells Fargo, and Santander, are investigating the possibility of issuing their own stablecoins. In a separate but related initiative, a consortium of over a dozen banks, operating under the name BankChain Alliance, is developing a new blockchain network. This network is intended to serve as a payment rail and is anticipated to support use cases such as stablecoins and tokenized deposits, with a projected launch in the first half of 2027.

    The news has already had an observable impact on the market, with shares of Circle and Coinbase reportedly falling more than 3% in the past day. This market reaction suggests investor concern that stablecoins issued and distributed at scale by major banks could reduce the market share currently held by crypto-native issuers and their products, such as Circle’s USDC.

    Details on Bank Plans and Alliances

    While JPMorgan Chase has explored a potential stablecoin, the company has stated that no product is currently under development. However, a consortium of more than a dozen banks, including Bank of America, Wells Fargo, and Santander, is reportedly advancing plans for a commercial-focused stablecoin. The BankChain Alliance has announced its intention to create an industry-owned and industry-governed blockchain network. According to the Wall Street Journal, the organizations involved in the BankChain Alliance, modeled on the Federal Home Loan Bank system, represent a significant portion of the U.S. banking sector, encompassing approximately 3,283 institutions and $21.8 trillion in assets. Planned use cases for the BankChain network include treasury management, supply-chain financing, cash management, tokenized deposits, stablecoins, smart payment tools, and automated settlement.

    Legislative Context and Future Outlook

    Coinbase has been a prominent advocate for the CLARITY Act, with its CEO Brian Armstrong and other executives actively urging the Senate to advance the bill. However, at the time of reporting, the CLARITY Act had not yet passed the Senate, and certain issues, such as its treatment of stablecoin yield, remained to be resolved. The progress of these bank initiatives and the legislative process are expected to remain central to discussions surrounding competition in the stablecoin market.

    These developments highlight a potential shift in the digital asset space, with traditional financial institutions increasingly exploring blockchain technology and stablecoin issuance. While the BankChain Alliance network is anticipated for 2027, the exact timelines for other bank-specific stablecoin products remain uncertain. The BankChain Alliance is also reportedly seeking a technology partner for its network. The ongoing evolution of these initiatives, alongside legislative developments, will be closely watched by market participants.

    Why This Matters

    The materials describe a narrow update: Several major banks, including JPMorgan Chase, Bank of America, Wells Fargo, and Santander, are reportedly exploring or advancing plans to issue their own stablecoins. JPMorgan Chase’s stablecoin discussions remain preliminary and no product is under development.

    Broader Context

    Source materials place the factual news in this context: The BankChain Alliance announced an industry-owned and industry-governed blockchain network intended to enable banks of all sizes to build modern payment rails.

  • Evernorth Advances Toward Nasdaq Listing as SEC Declares Registration Statement Effective

    Evernorth Advances Toward Nasdaq Listing as SEC Declares Registration Statement Effective

    Evernorth has achieved a significant regulatory milestone, with the U.S. Securities and Exchange Commission (SEC) declaring its registration statement effective on August 27. This development is a crucial step in Evernorth’s proposed merger with Armada Acquisition Corp. II, moving the company closer to a potential listing on the Nasdaq under the ticker symbol XRPN.

    The effectiveness of the registration statement indicates that the SEC has completed its review of the necessary documentation for the transaction. However, the merger remains subject to several conditions. Armada Acquisition Corp. II shareholders are scheduled to vote on the business combination on September 30, 2026, and the closing of the deal also depends on the satisfaction of other customary conditions.

    Evernorth aims to become a publicly traded XRP treasury company, offering investors exposure to XRP through corporate equity rather than direct token ownership. This structure, Evernorth stated, is designed to accelerate XRP’s role in institutional on-chain finance. In March, Evernorth filed its Form S-4, outlining its plan to provide public market investors with exposure to XRP via an actively managed treasury. The company previously announced raising over $1 billion in gross proceeds from institutional and strategic investors, including Ripple, SBI Holdings, Pantera Capital, Kraken, and Arrington Capital.

    While the SEC’s declaration of effectiveness removes a procedural hurdle, the upcoming shareholder vote is a key event. The success of the merger and subsequent Nasdaq listing are not guaranteed. Uncertainties persist regarding whether Armada Acquisition Corp. II shareholders will approve the deal, if all closing conditions will be met, and if the combined entity will receive approval for listing on the Nasdaq.

    Furthermore, the long-term impact of Evernorth’s strategy on XRP demand and activity on the XRP Ledger remains to be seen. At the time of reporting, XRP was trading just above $1.40, having seen a nearly 10% increase over the past week and close to 32% in the last 30 days. It is uncertain whether this corporate structure will translate into sustained XRP demand or meaningful on-chain activity.

    Evernorth’s progression toward becoming a publicly traded entity involves navigating regulatory processes and securing shareholder approval. The company’s unique approach to offering XRP exposure through a corporate structure presents an innovative model, the ultimate success and market impact of which are still subject to future developments.

    Why This Matters

    The materials describe a narrow update: The SEC declared Evernorth’s registration statement effective, which is a required step for its planned merger with Armada Acquisition Corp. Whether Armada Acquisition Corp. II shareholders will approve the deal.

    Broader Context

    Source materials place the factual news in this context: Evernorth is an XRP treasury company.

  • Bitcoin Rally’s Sustainability Questioned Amid Fading Short Covering and Macro Uncertainty

    Bitcoin Rally’s Sustainability Questioned Amid Fading Short Covering and Macro Uncertainty

    Bitcoin’s recent price rally faces sustainability questions as the momentum from short covering may wane, necessitating fresh demand to maintain its trajectory amidst evolving macroeconomic signals, according to QCP Research. While strong spot ETF inflows have provided additional demand, the firm noted that the rally could become more fragile if this short covering momentum fades and is not replaced by new leveraged positions.

    Open interest has fallen as Bitcoin advanced, indicating that the current price increase is not solely driven by new leveraged positions. ETF inflows have been robust, nearing the 95th percentile of the past year, offering some support. However, QCP Research suggests that recent financing activities, such as those by Strategy, point towards liquidity management rather than immediate accumulation. Strategy recently raised over $1.9 billion without adding Bitcoin to its holdings, reporting 840,447 BTC for a second consecutive week. Between August 17 and 23, the company conducted a $2.01 billion at-the-market equity sale and built a $1.59 billion flexible cash reserve, bringing its total dollar assets to $6.69 billion. Strategy’s average purchase price for Bitcoin remains $75,385 per BTC, with its cash reserve viewed as support for preferred stock and post-dilution flexibility.

    Broader macroeconomic signals add to market uncertainty. Minutes from the July Federal Open Market Committee (FOMC) meeting revealed a 9-3 vote, with three officials preferring a 25-basis-point rate hike. Attention is now turning to appearances at Jackson Hole, though specific policy guidance is not anticipated. Further influencing market dynamics, Treasury Secretary Scott Bessent announced plans to double the maximum size of long-term Treasury buybacks to $4 billion per operation starting September 9. This announcement contributed to lower Treasury yields and pushed the US dollar to a three-month low. QCP characterized the buyback plan as a liquidity overlay, suggesting that a weaker dollar and elevated long-term yields could potentially support Bitcoin and gold amid ongoing fiscal concerns.

    Energy markets present an additional layer of uncertainty. Tensions surrounding Iran and the Strait of Hormuz are raising supply concerns, with tanker crossings declining and energy reserves falling below 300 million barrels. With jobless claims due Thursday and commentary expected from Kevin Warsh on Friday, several near-term catalysts remain in focus.

    Bitcoin could remain range-bound into the September Federal Reserve meeting as markets assess whether current demand can sustain the rally. The core uncertainty lies in whether new demand will emerge to replace the fading short-covering momentum, a situation complicated by the evolving macroeconomic landscape and geopolitical risks.

    Why This Matters

    The materials describe a narrow update: QCP Research suggests Bitcoin’s recent price increase is partly due to short covering, not new leveraged positions. Whether new demand will replace short covering momentum to sustain the Bitcoin rally.

    Broader Context

    Source materials place the market analysis in this context: Bitcoin’s latest rally appears to be driven partly by short covering rather than fresh leveraged positions, according to QCP Research.

  • Bithumb Secures Court Victory in Bitcoin Miscredit Case, Proceeds Deemed Unjust Enrichment

    Bithumb Secures Court Victory in Bitcoin Miscredit Case, Proceeds Deemed Unjust Enrichment

    The Seoul Central District Court has ruled that proceeds from the sale of mistakenly credited Bitcoin constitute unjust enrichment, a decision that supports cryptocurrency exchange Bithumb’s efforts to recover funds lost due to a February system error. This ruling highlights the legal and regulatory responses to operational failures within the digital asset space.

    The incident occurred when a staff member mistakenly credited customer accounts with approximately 620,000 BTC instead of Korean won during a promotional event. At the time, Bithumb’s actual holdings were around 40,000 BTC. Trading continued for about 40 minutes, during which roughly 1,788 BTC reached the order book before trading was halted. This error was associated with the BTC/KRW trading pair to drop by approximately 17%.

    Bithumb has pursued legal action to reclaim funds related to the error. The recent court order mandates one customer to return about $140,400 (194 million won) from selling the erroneously credited Bitcoin. This follows a previous court award of $3,620 (5 million won) to Bithumb. Two additional claims are pending, seeking to recover $10,700 (14.8 million won) and $362,000 (500 million won), bringing the total sought in these four claims to approximately $517,000 (714 million won).

    By March 10, Bithumb reported recovering 99.7% of the Bitcoin involved in the broader miscredit. Some affected traders received compensation exceeding their credited amounts.

    The error prompted regulatory scrutiny in South Korea, with authorities classifying it as a control failure. The Financial Supervisory Service affirmed that mistaken balances could be considered unjust enrichment, bolstering Bithumb’s legal stance. Consequently, regulators now require licensed exchanges to reconcile customer ledgers with actual holdings every five minutes. The Bank of Korea also considered implementing a market circuit breaker.

    While Bithumb has achieved legal success in recovering funds, the outcomes of the two pending claims remain uncertain. This event underscores the critical need for robust operational controls within cryptocurrency exchanges and highlights the evolving regulatory landscape for digital asset platforms. The court’s classification of the proceeds as unjust enrichment provides a legal precedent for exchanges seeking to recover assets lost due to similar errors, while the regulatory response signifies a move towards stricter oversight and operational standards in the industry.

    Why This Matters

    The materials describe a narrow update: Bithumb mistakenly credited customers with approximately 620,000 BTC during a promotion due to a staff error. The outcome of the two remaining pending claims against customers.

    Broader Context

    Source materials place the factual news in this context: A bizarre error that mistakenly credited Bithumb customers with roughly 620,000 BTC is now producing victories for the South Korean exchange in court.

  • Sparrow Wallet Releases Security Update Driven by AI-Assisted Code Review

    Sparrow Wallet Releases Security Update Driven by AI-Assisted Code Review

    Sparrow Wallet has released version 2.5.4, a significant update incorporating numerous security fixes primarily identified through an AI-assisted code review. This proactive measure enhances transaction verification, strengthens hardware wallet security, and addresses various other security aspects.

    The AI-assisted code review was prompted by the increasing availability of unrestricted AI models and the ability to search large codebases for exploits. This proactive measure follows a recent vulnerability in Coldcard’s seed-generation code, which may have been discovered with AI assistance.

    According to developer Craig Raw, the majority of the fixes in version 2.5.4 were identified through this AI-driven process. He stated that no immediate threat to user funds was found, and there is no evidence of exploitation or affected users. Nevertheless, Raw recommended installing the update.

    Key security enhancements in version 2.5.4 include:

    • Transaction Verification: The wallet now suggests that transactions returned by Electrum servers are indeed the ones requested. It also checks cryptographic proofs for transaction confirmation and verifies the latest block in the chain before marking transactions as reported.
    • Hardware Wallet Security: Security for BitBox02 hardware wallets has been strengthened, requiring firmware version 9.4.0 or later and implementing anti-klepto protection. Anti-klepto protection helps prevent a compromised device from leaking private-key information while signing a transaction.
    • Log Redaction and Access Control: Debug logs now redact sensitive information, including Bitcoin Core credentials and other secrets. Access to wallet and backup directories has also been restricted.
    • DNS Leak Prevention: The update closes local DNS leaks when using Tor, enhancing user privacy.

    Sparrow Wallet, launched in 2020, is known for its privacy and security features, including coin control, Tor support, and hardware wallet integration. The update also includes changes affecting Ledger, Trezor, and Keycard devices, as well as multisignature wallets, Payjoin, wallet imports, and partially signed Bitcoin transactions.

    This AI-assisted review and subsequent update reflect a broader trend within the Bitcoin ecosystem, where developers are increasingly leveraging AI technology to scan wallets, payment protocols, and code libraries for flaws before potential attackers can find them. While the specific AI models used for Sparrow’s review were not identified, the incident highlights the evolving landscape of cybersecurity in the cryptocurrency space.

    Raw acknowledged that users with air-gapped setups might be hesitant to install updates, but emphasized the importance of staying current with security measures. He personally verified each issue and found no evidence that the problems were exploited or that Sparrow users were affected, considering such exploitation unlikely.

    Why This Matters

    The release of Sparrow Wallet’s version 2.5.4, enhanced by AI-assisted code review, underscores the growing integration of artificial intelligence in cybersecurity practices within the Bitcoin ecosystem. This proactive approach to identifying and fixing vulnerabilities before they can be exploited demonstrates a commitment to user safety in an evolving digital security environment. While the developer stated no immediate threat to user funds was found, the update highlights the importance of staying current with security measures in the face of increasingly sophisticated potential threats.

    Broader Context

    Source materials place the factual news in this context: Privacy-focused Bitcoin wallet developer Sparrow Wallet released version 2.5.4 on Thursday.

  • OpenAI’s ChatGPT Work Agentic Browser: Balancing Automation with Session Security Considerations

    OpenAI’s ChatGPT Work Agentic Browser: Balancing Automation with Session Security Considerations

    OpenAI has introduced an agentic browser capability for ChatGPT Work, a feature that allows the AI to log into websites and maintain active sessions for ongoing tasks. This development, detailed in release notes on August 25, aims to enhance automation by enabling ChatGPT to handle tasks that require website logins.

    The agentic browser functions by interacting with websites similarly to a human user. When a task requires access to a login-gated site, ChatGPT Work will present a login screen for the user to input credentials or a security code. Once authenticated, the AI agent can proceed with the task. A key aspect of this new capability is the potential for sessions to remain active for future use, thereby reducing the need for repeated logins. OpenAI states that the browser supports password managers and that the model itself does not see or store usernames or passwords, nor are these credentials used for training purposes.

    OpenAI indicates that this feature is now live in ChatGPT Work’s browser on both web and mobile platforms. Users have the ability to clear sessions individually per site through the settings menu under ‘Cloud browser.’

    This new functionality presents a notable tradeoff between user convenience and security. While the ability for an AI agent to maintain a persistent foothold on authenticated accounts can streamline workflows, it also introduces new considerations. OpenAI’s stated safeguards focus on the protection of passwords themselves. However, the implications of an active, persistent session that the agent can continue to utilize, even after the initial task is complete, extend beyond password security. The release notes suggest that once logged in, the agent can continue working, and the session may remain signed in for future tasks.

    This development occurs within a broader context of AI agent capabilities and their potential for exceeding defined parameters. In past incidents, AI agents have demonstrated behaviors such as unauthorized spending or unintended system modifications. While OpenAI’s new feature is designed with specific safeguards, the inherent nature of agent autonomy means that persistent access to authenticated sessions warrants user awareness. Uncertainties remain regarding the extent to which users are aware of or actively manage persistent agent sessions, and the potential for misuse despite stated protections.

    OpenAI states that the agentic browser is designed to assist with tasks, and the company has implemented measures to protect user credentials. The feature allows for individual session management, providing users with some control over their active connections. However, the introduction of an AI agent capable of autonomous login and session maintenance signifies a step forward in AI’s integration with web services, highlighting the ongoing evolution of user-AI interaction and the associated security considerations.

    Why This Matters

    The materials describe a narrow update: OpenAI’s ChatGPT Work now includes an agentic browser feature that can log into websites using user-provided credentials. The extent to which users are aware of or actively manage persistent agent sessions.

  • Friend Surges 1,600% on Machi Big Brother’s $1M Takeover Bid

    Friend Surges 1,600% on Machi Big Brother’s $1M Takeover Bid

    Machi Big Brother Proposes $1 Million Buyout of Friend.

    Tech, Sparking Token Rally

    Machi Big Brother has put forth a $1 million offer to acquire the struggling Friend.Tech platform, aiming to relaunch its native FRIEND token. The proposal, made on August 27, targets the project’s current holders, Racer and Paradigm, with the goal of revitalizing the stalled venture.

    The announcement immediately sent the FRIEND token soaring, but it also reignited scrutiny over Machi’s substantial personal losses on the token and the viability of his plan to revive the project.

    In a social media post on Wednesday, Machi Big Brother stated that Friend.Tech’s market capitalization was below $300,000 prior to his buyout offer. “Iā€™m offering a 1 mil usd buyout offer to Racer and @paradigm. We can CTO relaunch $FRIEND,” he wrote.

    The proposal dramatically impacted the token’s trading activity. CoinGecko data indicated that FRIEND had surged by over 1,600% in the 24 hours leading up to this report, trading near $0.06. This followed a period where the token had dipped as low as $0.0025 in the preceding 24 hours, before reaching a high of approximately $0.10. Trading volume also saw an explosive increase, climbing to about $5.3 million over 24 hours, a staggering 94,831% jump from the previous day.

    Longer-term performance showed even more dramatic gains, with the asset increasing by over 2,600% from its price a week prior and nearly 3,400% over 14 days. Within a month, FRIEND had appreciated by almost 3,300%, though these figures are subject to significant fluctuations due to ongoing volatility.

    Machi’s involvement with FRIEND is marked by a significant financial history. According to data from Lookonchain, he previously invested approximately 5,200 ETH, valued at $16.7 million at the time, to acquire around 11 million FRIEND tokens. These tokens had diminished in value to just $500,000 when Lookonchain reported the figures, resulting in a loss for Machi exceeding $16 million.

    Further details emerged regarding Machi’s recent activity. Lookonchain noted that he had transferred the 11 million FRIEND tokens to a wallet identified as 0x3205 just five days before announcing his $1 million offer. However, Machi denied any suggestion of selling the tokens, describing the receiving address as his “new fomo wallet.”

    Friend.Tech launched on the Base blockchain in August 2023, initially attracting users with a novel system that allowed trading of access to influencers’ feeds. However, user activity significantly waned after its initial surge in popularity.

    As previously reported, the development team transferred control of Friend.Tech’s smart contract to Ethereum’s null address in September 2024, effectively preventing any future modifications to its fees or functionality. This decision followed a dramatic decline in platform revenues, with reported fees falling to as low as $71.

    The FRIEND token also experienced a severe downturn during this period, reaching an all-time low. Consequently, Wednesday’s rally must be contextualized against this substantial collapse; even with the recent gains, the token remains over 98% below its all-time high.

    Machi’s proposal has placed the project in a peculiar situation: a token that had largely faded from traders’ attention is now experiencing millions of dollars in daily turnover, while the individual championing its revival has already incurred millions in losses from a prior investment. It remains to be seen whether this bid will materialize into an actual acquisition.

  • Arthur Hayes’s Flop Labs Explores Digital Currency for AI Agents, Tied to Computing Power

    Arthur Hayes’s Flop Labs Explores Digital Currency for AI Agents, Tied to Computing Power

    Arthur Hayes, through his project Flop Labs, has put forth a thesis for a new digital currency designed specifically for AI agents, which would be directly redeemable for computing power. This proposed currency aims to establish a dedicated market for computational resources, though its success and broader market implications remain uncertain.

    Flop Labs argues that AI agents require a form of currency that can be exchanged directly for the computing power they consume, rather than relying on conventional currencies like dollars or existing digital assets such as Bitcoin. The proposed Flop Network is designed to facilitate this by enabling GPU operators to provide inference services and receive FLOP tokens. Validators would then cryptographically verify the work performed, and agents would pay for compute using the FLOP tokens they hold. The exact mechanism for ensuring a ‘fair price’ for compute is one of the uncertainties surrounding the proposal.

    In a six-part thread published on August 27, Flop Labs detailed Hayes’s argument, highlighting a perceived market inefficiency: the lack of an efficient spot market for converting money into a known quantity of computing power over a specified period. The Flop Network aims to address this by making the FLOP token the primary medium of exchange for computational resources. However, the long-term viability and adoption of the FLOP token and Flop Network are also subject to uncertainty.

    The tokenomics projected by Flop Labs suggest a supply of approximately 17.2 billion FLOP tokens by the tenth year of operation. The Genesis airdrop is planned for 3.5 billion tokens, with additional allocations for miners (1.5 billion), agents (1.2 billion), validators (310 million), and reserves and incentives (790 million). Notably, Flop Labs has stated there will be no venture capital allocation or presale for FLOP. A testnet is also in development, with an expected duration of approximately 90 days.

    Beyond the specifics of the Flop Network, Arthur Hayes has also shared broader market predictions. He has consistently expressed skepticism regarding current AI investment, characterizing it as a bubble. Arthur Hayes believes that excess investment is concentrated in data center debt and unprofitable hyperscaler shares, rather than in agentic technology itself. Hayes expects a slowdown and subsequent contraction in AI spending next year, which he predicts could lead to significant bailouts, potentially exceeding those seen in 2008. Hayes further expects this contraction to drive new capital into the cryptocurrency market, with a potential price target of $1 million for Bitcoin. The precise timing and scale of the predicted AI spending contraction and subsequent bailouts, as well as whether Bitcoin may indeed reach $1 million, are among the uncertainties.

    In related market data, analyst Jamie Coutts observed a significant decrease in settlement volume on Coinbase’s x402 agent payment protocol, reportedly falling by 93% this year. While Coutts described this as a “reality check” for the sector, he anticipates a potential pickup in volume during the fourth quarter. The actual performance of Coinbase’s x402 agent payment protocol beyond the reported drop is also an area of uncertainty.

    The proposal from Flop Labs and Arthur Hayes introduces a novel concept for a digital currency tailored to the needs of AI agents and the direct exchange of computing power. However, the success of the Flop Network and the FLOP token, as well as the broader market predictions made by Hayes, remain subject to significant uncertainties and future developments.

    Why This Matters

    Arthur Hayes, through his project Flop Labs, has put forth a thesis that AI agents require a dedicated form of money that can be directly exchanged for computing power. The exact mechanism for ensuring a ‘fair price’ for compute is one of the uncertainties.

    Broader Context

    Arthur Hayes has expanded his thesis for Flop Labs, an AI payment project he announced recently.

  • Mastercard Invests in Ripple, XRP ETF Undergoes Key Reforms

    Mastercard Invests in Ripple, XRP ETF Undergoes Key Reforms

    Mastercard Deepens Ties to Ripple Ecosystem Amid Renewed XRP ETF Interest

    Mastercard has strengthened its connection with the Ripple ecosystem, coinciding with a resurgence in XRP Exchange Traded Fund (ETF) flows. While XRP remains significantly below its previous peaks, the confluence of institutional engagement and renewed capital rotation has placed the token back on the radar of trading desks this week.

    XRP Ledger Foundation Welcomes Mastercard Sponsorship

    The XRP Ledger Foundation announced Mastercard as a sponsor for the upcoming XRP Ledger Hackathon, a 36-hour event scheduled for October 24-25, preceding Ripple’s Swell conference in 2026 (October 27-29). The Foundation expressed enthusiasm for the payments giant’s participation, highlighting the decade-old XRP network’s suitability for payment use cases.

    Mastercard’s involvement in the XRP Ledger Hackathon signals a significant development. When a major payments company engages with a builder event, it suggests that the innovations emerging from such collaborations are likely to have a tangible impact. The hackathon is set to take place in New York from October 24-25.

    This sponsorship follows Mastercard’s earlier move in March to include Ripple, alongside other prominent entities like Binance, PayPal, and Circle, in a broader blockchain-payments partnership program.

    XRP ETF Adjustments Coincide with Inflow Momentum

    Meanwhile, 21Shares has made technical adjustments to how its XRP ETF prices the underlying asset. This shift comes at a time when XRP ETF inflows are demonstrating renewed momentum after a period of sluggish performance.

    XRP’s intraday trading range has been observed between $1.38 and $1.46, with current trading hovering around the $1.45 mark, near the upper end of this band. Trading volume has increased in tandem with this price movement, mirroring activity seen in August 2026 when its ETF recorded net inflows of $56.86 million.

    Beyond ETFs, XRP’s trading volume has reached its strongest point since January. The $1.40 level is now acting as immediate support, with resistance anticipated in the mid-$1.40s, close to recent highs.

    Potential Upside and Downside for XRP

    A decisive break above $1.46 could pave the way for XRP to reach $1.60 and beyond, particularly if the CLARITY Act successfully passes its September 15 cloture vote, formalizing XRP’s status as a commodity regulated by the CFTC. However, consolidation between $1.30 and $1.46 is also a possibility as the market assesses whale activity and ETF flow data.

    On the bearish side, a decline below $1.34 could lead to a retest of the $1.00 psychological support level, which held firm in mid-August. Approximately 60% of XRP’s supply is reportedly trading below its realized price of $1.48, an overhang that warrants caution before aggressively pursuing further gains.

    XRP holders who have benefited from the recent upward movement have earned their gains, with a rise from $1.00 to $1.45 representing a notable increase. However, with a market capitalization of roughly $90 billion, doubling from its current position would require an additional $90 billion in fresh capital, a more substantial challenge compared to assets in their presale stages.

    Institutional Expectations and Emerging Opportunities

    The recalibration of institutional expectations is evident, as exemplified by Standard Chartered’s reduction of its 2026 target for XRP from $8 to $2.80. The significant discrepancy between JPMorgan’s initial projection of $8 billion in inflows and the approximately $1.5 billion actually delivered highlights an asymmetry that often drives capital towards earlier-stage investment opportunities.

    In this context, Bitcoin Hyper ($HYPER), a Bitcoin Layer 2 solution integrating with the Solana Virtual Machine, is emerging. It is positioned as offering faster transaction speeds than Solana while leveraging Bitcoin’s base-layer security. The presale has raised $33 million to date, with a token price of $0.01368 and a 35% APY staking reward. Its Decentralized Canonical Bridge aims to address Bitcoin’s long-standing programmability limitations without compromising trust assumptions.