Crypto Currents: Bitcoin ETF hopes soar while JPMorgan cools on solana hype

The gap between traditional and decentralized finance continues to close. Institutional firms are set to double their digital asset exposure, according to State Street, as Bitwise forecasts a record-breaking last three months of the year for bitcoin ETF inflows. Furthering the integration, financial mainstays like Citigroup, Visa, and Deutsche Bank are expanding their use of stablecoin payment platforms. Stay up on the crypto news that matters with “Crypto Currents,” daily from The Fly. Join us at 2 PM ET for your essential briefing on the fast-moving world of cryptocurrency on FlyCast radio, Also, subscribe to our YouTube channel for the Crypto Fly By weekly recap.

BITWISE SEES RECORD BITCOIN ETF INFLOWS AS INSTITUTIONS PILE IN: Flows into bitcoin (BTC-USD) ETFs are once again on track to set a new quarterly record, according to crypto asset manager Bitwise, and further covered by CoinDesk.. The firm expects a surge during the final three months of the year as institutional access broadens, citing major wirehouses like Morgan Stanley (MS) and Wells Fargo (WFC) clearing their advisors to allocate to cryptocurrency. Bitwise noted that others, such as UBS Group (UBS), may soon follow. The bullish outlook is reinforced by strong performance from existing products, with The Block reporting that BlackRock’s (BLK) IBIT fund has surpassed 800K bitcoin in assets under management. Adding to the institutional trend, Cointelegraph reports that Luxembourg’s sovereign wealth fund has allocated 1% of its portfolio to bitcoin ETFs.

STATE STREET, CITI, VISA DEEPEN STABLECOIN AND TOKENIZATION BETS: Institutional investors are moving past experimentation and into large-scale adoption of digital assets, according to a new survey from State Street (STT). The research found that over half of institutions expect to double their exposure to digital assets over the next three years, with tokenization of private equity and fixed income seen as the most likely starting point. The trend toward on-chain finance is also accelerating in the payments sector. CoinDesk reports that Citigroup (C) has joined Visa (V) in making a strategic investment in stablecoin payments platform BVNK. Separately, Live Bitcoin News reports that digital asset platform Bullish (BLSH) has partnered with Deutsche Bank (DB) to provide fiat payment rails for institutional clients. Ripple is also expanding, partnering with Bahrain Fintech Bay to bring its custody solutions and Ripple USD stablecoin (RLUSD-USD) to financial institutions in the Middle East, according to Cointelegraph. In the U.S., Fiserv (FI) is partnering with the Bank of North Dakota to launch a state-backed stablecoin called ‘Roughrider Coin’

JPMORGAN POURS COLD WATER ON SOLANA ETF HYPE, SEES MODEST INFLOWS: Despite widespread market expectations for the approval of spot solana (SOL-USD) ETFs, analysts at JPMorgan (JPM) see only modest inflows for the potential products. In a research report covered by CoinDesk, the bank projected that solana ETFs could attract about $1.5B in first-year inflows, a fraction of what ether (ETH-USD) funds have drawn. The analysts warned the total could be even lower due to factors like investor fatigue, waning on-chain activity, and competition from diversified crypto index products.

SOFTBANK’S PAYPAY BUYS BINANCE JAPAN STAKE; BITMINE FACES SHORT REPORT: Japan’s largest mobile payments platform, PayPay, a SoftBank Group (SFTBY) company, has acquired a 40% stake in Binance Japan, as reported by Cryptonews. The deal will allow Binance Japan users to purchase and withdraw crypto directly through PayPay’s digital wallet, which serves over 70M users. Elsewhere, shares of BitMine Immersion Technologies (BMNR) were choppy after short-seller Kerrisdale Capital disclosed a short position, arguing the company’s model of issuing stock to acquire crypto is “on its way to extinction,” The short seller has previously targeted other crypto treasury companies, including Strategy (MSTR) and Riot Platforms (RIOT). In Washington, CEO of Block (XYZ), Jack Dorsey, wrote in a post to X, “we need a de minimis tax exemption for everyday bitcoin transactions“, in which U.S. senator Cynthia Lummis replied “Working on it. If this is of interest to you, please tell your Senators/House member!” This situation recalls a previous legislative effort from July when Senator Lummis was unable to secure a floor vote for several crypto-friendly amendments to the “One Big, Beautiful Bill.” The legislation ultimately passed, sidelining the proposed changes. Among the amendments was a de minimis exemption that would have allowed Americans to avoid reporting capital gains taxes on crypto transactions valued under a few hundred dollars, a provision similar to what Dorsey is currently advocating..

PRICE ACTION: As of time of writing, bitcoin was trading at $121,044.91, while ether was trading at $4,309.74 , according to price data from CoinDesk.