Julien Bittel, head of macro research at Global Macro Investor, argued that the bull run remains in its early stages based on comprehensive economic indicators.

In a Sept. 8 analysis shared via X, Bittel counters widespread “peak cycle” sentiment in crypto markets, challenging late-cycle narratives by examining traditional economic markers.

Peak sentiment

Classic late-cycle economies typically feature extreme manufacturing sentiment with ISM readings around 60, elevated services sentiment, high homebuilder confidence, strong consumer and worker confidence, bullish investor sentiment, and accelerating wage growth.

Bittel said current data paints a different picture. When scoring inputs from ISM, NAHB, NFIB, BLS, AAII, and The Conference Board into a composite sentiment measure, US economic sentiment remains “very subdued” and far from euphoric late-cycle extremes.

He stated:

“This does not look like an above-trend late-cycle economy. It looks much more like an early-cycle economy trying to build momentum.”

Central bank policy provides additional support for this thesis. Nearly 90% of central banks globally are cutting rates, creating what Bittel describes as “extraordinary” conditions and “a massive tailwind for the business cycle” on a forward-looking basis.

Oil prices reinforce the early-cycle argument, trading nearly 20% below trend and continuing to fall. This represents easing financial conditions rather than the tightening typically associated with late-cycle dynamics.

Historically, oil prices running 50% above trend have signaled recession since the early 1970s.

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Bull cycle in early stages

Temporary Help Services data shows “early-cycle vibes” with rising growth from profoundly negative levels, indicating economic recovery rather than rollover.

According to Bittel, late-cycle periods typically feature positive year-on-year growth that’s slowing, reflecting an overheated economy losing steam.

He attributes rising unemployment to the lagging nature of jobs data, calling it “a six-month look in the rear-view mirror.”

Businesses first increase overtime hours and temporary workers before committing to expensive full-time hires with benefits and pensions.

Bittel also frames current conditions as “early-cycle” transitioning to “mid-cycle,” describing the progression as “Macro Spring” (growth up, inflation down), moving toward “Macro Summer” (growth up, inflation up).

He concluded that this macro perspective challenges the prevailing crypto market sentiment, which suggests that the bull cycle has peaked. Instead, he assessed that the current economic conditions support continued expansion rather than contraction.

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The European Central Bank said that its proposed digital euro would strengthen Europe’s defenses against cyber and infrastructure disruptions while ensuring broad access to digital payments.

Piero Cipollone, a member of the ECB’s Executive Board, told the European Parliament’s Economic and Monetary Affairs Committee that resilience and inclusiveness must be central features as the bloc prepares to complement physical cash with a central bank-issued digital version.

The remarks marked the ECB’s 14th update to lawmakers on the central bank digital currency project.

Building resilience in payments

Cipollone said Europe’s reliance on foreign payment providers exposes citizens to risks in times of crisis. He cited incidents ranging from undersea cable sabotage in the Baltic Sea to recent power outages in Spain and Portugal as examples of how vulnerable infrastructures can disrupt daily transactions.

He argued that the digital euro would provide “spare capacity” in the financial system by adding public payment rails alongside private solutions.

Planned safeguards include transaction processing across multiple regions, a mandatory ECB-run app to ensure continuity if banks are targeted by cyberattacks, and offline functionality that would allow peer-to-peer payments during power or network outages.

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Ensuring inclusion for all citizens

Cipollone stressed that the digital euro must also serve Europeans at risk of being excluded from a cash-light economy.

He pointed to more than 30 million people in Europe who are blind or partially sighted, at least 34 million who are deaf or hard of hearing, and citizens with limited digital literacy.

The ECB said it is working with consumer groups to design adaptive interfaces, including voice commands and large-font displays, and will require payment providers to support its own app to guarantee basic access.

Local institutions such as post offices and libraries could also provide free support to those least familiar with digital tools.

Aave reached an all-time high total value locked (TVL) of $41.1 billion on Aug. 24, positioning the decentralized lending protocol as the equivalent of the 54th largest US commercial bank by total deposits based on Federal Reserve data as of Jun. 30.

The money market protocol would replace the Prosperity Bank, which has $38.4 billion in deposits, and would fall just $300 million short of surpassing Bank OZK.

Considering the Fed lists 2,156 commercial banks in the US, Aave’s size is enough to place it among the top 2.5% largest banks in the country.

DefiLlama data showed that including Aave’s outstanding borrows of $28.9 billion as of Aug. 24 would raise the combined figure to $71.1 billion. The borrowing volume was just below the all-time high of $29.1 billion recorded on Aug. 13.

The TVL increased by the borrows would be enough to place Aave among the 37th largest US commercial banks, a 1.7% group.

Aave founder Stani Kulechov said in an Aug. 24 social media post:

“Aave Protocol is like the 37th-largest bank, except it isn’t a bank, but a network any financial institution can plug into to unlock non-Fed–correlated yield.”

Dominance in lending

The money market protocol controlled approximately 50% of the DeFi lending market’s total TVL as of Aug. 24, commanding a dominant position within the $81.5 billion lending sector.

The percentage indicates that Aave’s TVL is equivalent to the combined TVL of all other money markets. The protocol is nearly 6x larger than its closest rival, Morpho, which holds just $7 billion in deposits.

Aave achieved multiple records last week amid strong DeFi lending sector performance. The protocol reached $3 trillion in cumulative deposits on Aug. 15 while surpassing $29 billion in active loans on Aug. 13.

The AAVE token is following the protocol’s fundamentals. Since recording a low of $114.05 on April 8, the token has climbed over 177% to $316.74 as of press time.

Institutional adoption drives the protocol’s expansion, with Nasdaq-listed BTCS using Aave to generate yield on Ethereum holdings. Additionally, $6.4 billion of Ethena’s USDe stablecoin and related assets are deposited on the platform.

The multiple records demonstrate Aave’s evolution into institutional-grade financial infrastructure, capturing market share as traditional finance institutions integrate decentralized lending services into their operations.

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CMB International Securities Limited, a subsidiary of the China Merchants Bank (CMB) — one of China’s top banks — launched a cryptocurrency exchange in Hong Kong.

According to a Monday CMB WeChat announcement, the bank has started offering virtual asset trading services. The launch comes after the Hong Kong Securities and Futures Commission approved the bank’s application for a virtual asset service provider license in mid-July.

CMB’s Hong Kong-based crypto exchange allows for 24/7 trading of Bitcoin (BTC), Ether (ETH) and Tether’s USDt (USDT) for eligible investors. Documentation provided by the bank clarified that only professional investors are eligible for crypto trading services.

China Merchants Bank is one of the country’s largest banks, managing over $1.7 trillion worth of assets as of the end of March, according to Macrotrends data. The bank’s ordinary class A shares have a market capitalization of $153.16 billion.

Related: China cracks down on stablecoin promotions, research and seminars

Mainland China’s ban on crypto persists

CMB said it is the first Chinese bank–affiliated broker in Hong Kong to secure licenses tied to virtual asset trading services. The bank also noted plans to integrate traditional stock trading with digital assets and fintech applications.

Still, in Shenzhen, China — where the bank’s headquarters are located — such a service would be illegal. The Chinese government banned crypto trading in 2017, resulting in major sell-offs at the time.

Since then, Chinese authorities have continued to treat crypto trading as illegal in mainland China, leading some market participants to devise creative solutions.

Hong Kong operates under its own rules within China’s “one country, two systems” policy, and is increasingly emerging as a local crypto hub.

Related: Animoca and Standard Chartered form stablecoin venture in Hong Kong

Hong Kong: an emerging crypto hub

Hong Kong authorities appear to have made crypto regulation a high-priority part of their agenda. On the first day of this month, the Hong Kong Monetary Authority (HKMA) finalized its regulatory framework for stablecoin issuers.

The introduction of the new rules led to stablecoin companies operating in Hong Kong posting double-digit losses on Aug. 1, just after they came into force. Analysts at the time described the sell-off as a healthy correction, as the requirements for stablecoin issuers proved to be more stringent than expected.

The new rules were rolled out in a six-month transition period starting from Aug. 1. The new Stablecoin Ordinance effectively criminalizes the offering or promotion of unlicensed fiat-referenced stablecoins to retail investors. Local authorities also launched a dedicated public license registry before the rules came into effect.

The Hong Kong Securities and Futures Commission has warned that the introduction of the new local stablecoin regulatory framework has increased the risk of fraud. Last week, the SFC also issued immediate guidance on cryptocurrency custody standards, introducing sweeping security requirements and a ban on smart contracts in cold wallet implementations — a rule that conflicts with current practices at several leading firms.

Magazine: China to ban owning Bitcoin? Gate.io to pay $30M over liquidations: Asia Express

]]> https://earlybirdsinvest.com/china-merchants-bank-subsidiary-launches-crypto-exchange-in-hong-kong/feed/ 0 53827 https://earlybirdsinvest.com/crypto-and-fintech-firms-urge-donald-trump-to-halt-bank-data-access-fees/ https://earlybirdsinvest.com/crypto-and-fintech-firms-urge-donald-trump-to-halt-bank-data-access-fees/#respond Sat, 16 Aug 2025 07:39:54 +0000 https://earlybirdsinvest.com/crypto-and-fintech-firms-urge-donald-trump-to-halt-bank-data-access-fees/

A group of financial technology and cryptocurrency companies has asked President Donald Trump to stop banks from charging fees for sharing customer account information.

The request came in an August 13 letter signed by Gemini

$193.92M

, Robinhood, the Crypto Council for Innovation, and the Blockchain Association.

They stated that the new “account access” fees would reduce competition and harm industries such as cryptocurrency, artificial intelligence (AI), and digital payments.

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These companies depend on access to bank data so users can transfer money between bank accounts and their platforms.

The letter warned that higher costs could force some products to shut down and limit options for consumers. It also argued that the United States could lose ground in developing digital assets if the connection between banks and new financial tools is weakened.

The group also asked the president to use his authority to block large banks from adding new fees. It stated that the country’s leadership in digital assets depends on “safe, reliable on-ramps” between the banking system and new financial services.

Banking groups, led by the American Bankers Association, argued that it would interfere with free market principles and amount to government control over pricing.

The banks noted that the proposal came from “middlemen” trying to benefit at no cost from the security systems that banks have paid to develop.

Meanwhile, US Senator Elizabeth Warren recently urged the Office of the Comptroller of the Currency (OCC) to address possible conflicts from President Trump’s ties to stablecoin USD1. What did she say? Read the full story.

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Aave, one of the largest decentralized lending protocols, could see its net deposits soar to $100 billion before the end of this year, according to the platform’s founder, Stani Kulechov.

In an Aug. 10 post on X, Kulechov explained that the DeFi protocol’s current growth rate could push it to that figure sooner than expected.

Antonio Garcia-Martinez, Director of Base Ads at Coinbase, claimed that the $100 billion scale would place Aave among the 35 largest banks in the world and on par with Deutsche Bank.

Notably, US Federal Reserve statistics back the comparison, ranking Aave’s deposit volume 41st among US-chartered commercial banks. That puts the DeFi giant ahead of established traditional financial institutional names like Barclays.

These bullish positions are unsurprising considering Aave has experienced a strong upward trajectory this year.

In July, the protocol surpassed $50 billion in net deposits for the first time, and it has since added another $11 billion, bringing its total to $61.1 billion as of press time.

Data from Token Terminal shows that this gives Aave a commanding 66.7% share of the $91.7 billion DeFi lending market. By comparison, the next largest competitor, Morpho, holds just $7.7 billion in deposits, making Aave nearly eight times larger.

What is driving Aave’s growth?

Aave’s remarkable growth is a product of its DeFi roots and reflects increasing interest from traditional finance and fintech companies.

A prime example is the recent disclosure by an Ethereum-focused treasury company, the Nasdaq-listed Blockchain Technology Consensus Solutions (BTCS), that it uses Aave to generate yield and bolster its ETH holdings.

Aave’s growth can also be linked to Ethena’s USDe stablecoin, which has seen significant deposits into the lending protocol.

According to Dune Analytics data, $6.4 billion of Ethena’s assets are parked on Aave, which has increased rapidly in just 10 days.

However, USDe’s expanding exposure to Aave poses some risks to the DeFi protocol’s growing footprint.

Risk management firm Chaos Labs recently cautioned that USDe’s growing presence could trigger liquidity pressures. The firm pointed to extensive rehypothecation, where collateral is reused across transactions, warning that systemic leverage could amplify market risks.

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President Donald Trump issued a debanking executive order this week aimed at stopping what his administration described as unfair banking discrimination toward the crypto sector.

Will the order be the definitive blow to the so-called Operation Choke Point 2.0? Will banks that debanked crypto companies unfairly be forced to reinstate them? Custodia Bank founder and CEO Caitlin Long dives into the finer points of the order:

Debanking executive order installs independent overseer

The first “hidden gem,” according to Long, is that Trump’s debanking executive order installs an independent overseer, highlighting the administration’s reservations with the existing three federal banking regulators, the FDIC, the Federal Reserve (Fed), and the Office of the Comptroller of the Currency (OCC).

Instead, it places the Small Business Administration (SBA), a non-bank regulator, as an independent overseer above these agencies to monitor debanking issues. This looks an awful lot like a lack of faith in existing agencies’ willingness or ability to address political and unfair debanking practices.

The SBA’s leader is a long-time Bitcoiner, Kelly Loeffler

President Trump picked Kelly Loeffler, a former senator, business executive, and known supporter of Bitcoin and the broader crypto industry, to lead the SBA. This appointment speaks volumes in the crypto community, as Loeffler was the CEO of Bakkt, an institutional bitcoin futures platform, before her Senate career.

The decision to place her in charge of monitoring debanking is an indication that this administration is serious about reform and that its trust in the previous regulatory agencies is low.

Political leanings inside the banking agencies

Long highlights the political leanings of staff at agencies like the Fed and FDIC. According to contribution records, a large majority of donations from Fed and FDIC staff went to Democratic candidates in recent elections, with Long placing the figure as high as 92% for Democrats in 2024.

This raises concerns for some that regulatory actions may have been driven by partisan biases, especially given the history of crypto-related “debanking” during the Biden administration.

Definition and scope of ‘politicized or unlawful debanking’

Trump’s debanking executive order defines “politicized/unlawful debanking” broadly, focusing on “lawful business activities” rather than naming crypto or any specific sector. This language means banks can no longer refuse service simply because a business is a crypto firm if it is otherwise in compliance. The order targets not just crypto companies, but any lawful firms that may face political discrimination. As Long points out:

“Banks that refused to serve or debanked lawful crypto companies are on the hook.”

The litmus test: Custodia and other crypto banks

Custodia Bank previously faced debanking after regulators pressured multiple banks to cut ties due to their crypto business, even though the bank had a clean compliance record.

Long asserts that the true test of Trump’s debanking executive order will be whether banks that debanked Custodia (and similar crypto firms) are compelled to reinstate them. The order’s success, then, will be measured by real outcomes in banking access for crypto companies.

“If they reinstate us, then the EO succeeded”

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The US economy is in “a new bull market,” according to Mike Wilson, Morgan Stanley’s chief US equity strategist.

Wilson says in a new interview with Bloomberg TV that Morgan Stanley believes the economy had been in a three-year rolling recession that ended in April.

“Now we’re in a new bull market and capital markets activity is just another sign that that analysis or that conclusion is probably correct.”

The Morgan Stanley executive believes there could be volatility and drawdowns in the third quarter, but he also thinks that such corrections wouldn’t invalidate the bull market thesis.

“We’ve said that the third quarter, we think this is the best chance we could have for some correction or moderation, if you will. But I want to be very clear, it is still early in the new bull market, so you want to be buying these dips.”

Wilson also outlines what he believes needs to happen for the bull market to continue.

“I think to continue the bull market, you need two things. The ingredients you need [include] positive rate of change on growth. Okay, we have that from an earnings standpoint. And you have a policy that isn’t inhibiting that growth. So both fiscal and monetary policy look like they’re okay. And it appears as if the Fed, maybe they’re not going to cut [rates] in the short term, but all signs point to the next move will be a cut. So you have supportive policy, you have positive rate of change, you have good flow dynamics. I mean, those are all the ingredients you need.”  

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Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any losses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.

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