Weekend Update

I hope you had a good weekend, folks. In today's Daily, Stripe's $1.1 billion acquisition of stablecoin platform Bridge is confirmed, Bernstein says Bitcoin ETF inflows, crypto equity markets and retail trading sentiment are "screaming risk-on," Japan's DPP leader pledges a 20% tax cap on crypto gains and more.

Meanwhile, perpetually rising bitcoin prices would lead to societal impoverishment, ECB economists claim, as the BIS highlights risks in TradFi's move toward tokenization.

Stripe acquires stablecoin platform Bridge for $1.1 billion

Payments giant Stripe has acquired stablecoin platform Bridge for $1.1 billion, according to TechCrunch founder and well-known venture capitalist Michael Arrington, expanding its integration with the space.

• The deal marks Stripe's largest acquisition and is a record for the crypto industry despite Bridge's under-the-radar status.
• Bridge confirmed its partnership with Stripe in a Monday post on X.
• Bridge owns the @stablecoin handle on social media.
• Founded by entrepreneurs Sean Yu and Zach Abrams, Bridge offers software tools for companies to accept payments in stablecoins.
• The founders previously sold a Venmo competitor to Jack Dorsey's Block in 2013, with Abrams being a former Coinbase executive.
• Previously, Bridge raised $58 million from investors, including a $40 million Series A round that valued it at $200 million, making this deal a significant leap in its valuation.
• Stripe reinstated crypto payments for U.S. businesses via USDC on Ethereum, Solana, and Polygon.
• In June, Stripe partnered with Coinbase to integrate the crypto exchange's Layer 2 network into its products, enabling users to buy digital assets using credit cards or Apple Pay.

Crypto markets are 'screaming risk-on'

Bitcoin ETF inflows, crypto equity markets and retail trading sentiment are "screaming" a risk-on environment, according to analysts at research and brokerage firm Bernstein.

• Bitcoin, alongside other risk assets, is interpreting rising odds for pro-crypto Donald Trump to win the U.S. presidential election as bullish, analysts led by Gautam Chhugani wrote.
• Coupled with clearer crypto policy statements from rival Kamala Harris, the market is less worried about downside risk.
• U.S. spot Bitcoin ETFs saw $2.1 billion in inflows last week, the largest since March, while crypto-related equities outperform in October.
• Retail sentiment is boosted by the recent surge in AI bot-related memecoin activity, the analysts added.

Japan's DPP leader pledges 20% tax cap on crypto gains

Yuichiro Tamaki, leader of Japan's Democratic Party for the People (DPP), proposed reducing tax rates on crypto gains from 55% to 20% ahead of the upcoming general election.

• The DPP's policy pitch includes tax exemptions for cryptocurrency-to-cryptocurrency exchanges, and raising leverage limits for retail investors from 2x to 10x.
• Although the DPP is a smaller opposition party, surveys suggest it could increase its presence in parliament, gaining more influence over crypto tax policy reform.
• This proposal contrasts with Italy's recent plans to increase capital gains tax on cryptocurrencies from 26% to 42%.

Data breach at fiat-to-crypto payment gateway Transak affects over 57,000 users

Transak, a Miami-based fiat-to-crypto payment gateway, disclosed a data breach affecting 1.14% of its 5 million users, potentially impacting over 57,000 individuals.

• Transak partners with major blockchain platforms like MetaMask, Trust Wallet, Coinbase, and Ledger.
• The Stormous ransomware gang claimed responsibility, stealing 300GB of sensitive data from a third-party KYC vendor.
• Transak confirmed no financial data was compromised but advised users to be alert for suspicious activity and offered identity monitoring services.
• The gang also exploited the decentralized identity system Fractal ID in July, raising concerns about vulnerabilities in web3-connected identity solutions.

MetaMask and digital identity firm Space ID aim to simplify crypto

MetaMask and Space ID are collaborating to simplify crypto transactions, allowing users to replace complex wallet addresses with customizable handles.

• Users can register a Space ID domain name, mapping it to EVM-compatible public addresses for secure transactions through MetaMask.
• This solution simplifies the process, minimizing the risk of sending funds to incorrect addresses.

In the next 24 hours

• Bank of England Governor Andrew Bailey will speak at 9:25 a.m. ET on Tuesday. U.S. FOMC member Patrick Harker follows at 10 a.m., and ECB President Christine Lagarde speaks at 10 a.m. and 3:15 p.m.
• Blockchain Life starts in Dubai as Cosmoverse 2024 continues and the AIM Summit concludes.

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