Crypto Volatility Vortex: Tariffs, Seizures, and Institutional Bets

Happy Wednesday, TM Family!

Welcome to the Token Metrics Research | Daily newsletter, where we cover key market movements, regulatory updates, and early alpha for our readers and investors. 

Let's dive in! 

Today's edition of Token Metrics Research | Daily Newsletter is brought to you by CoW Swap.

Built for active crypto traders. CoW Swap always searches across every major DEX and delivers the best execution price on every swap you make. Smarter routes. Better trades. No wasted value. Find your best price today. So why trade on any one DEX when you can use them all?

Find your best price today

 Now let's get back to the top stories of the day.

The U.S.-China trade war escalated this week, with President Trump's threat of a 100% tariff on Chinese imports triggering a crypto cascade. Bitcoin dipped below $112,000, shedding 3% to $111,869, while Ether and Dogecoin plunged by up to 6% amid $630M in liquidations, mostly long positions being wiped out. This followed Friday's $500B market cap wipeout, where Binance's infrastructure glitches amplified the pain, crashing wrapped assets like wBETH to $430 (an 88% discount to the ETH spot price) and BNSOL to $34.90.

Yet, here's the silver lining for accumulators: K33 Research calls this leverage flush a "constructive setup." Open interest has been violently cleared, echoing past unwinds that marked bottoms, such as those seen after the FTX collapse or the 2022 bear lows.

With BTC stabilizing at $112,600 (up 0.58%) and ETH at $4,112 (up 2.84%), the reset favors spot buys. Institutional flows back this up: U.S. spot BTC and ETH ETFs flipped positive with $340M in combined inflows Tuesday, led by Fidelity's FBTC ($132M) and FETH ($154M), reversing Monday's $755M outflows.

Binance is batting away allegations of shady token listings, with Limitless CEO CJ Hetherington claiming the exchange demands 8% of project supplies for airdrops and deposits, echoing whispers of indirect 7% "costs" to list.

Binance fired back, labeling the claims "false and defamatory," insisting that it does not profit from listings, fees are refundable, and executives aren't dumping tokens. They even hinted at legal action over leaked comms.

Amid this, Binance is demonstrating its commitment to user protection following Friday's meltdown, offering $283M in direct compensation for affected traders (provided on a case-by-case basis via support) and a $400M "Together Initiative" aimed at recovery and confidence-building.

On the BNB side, a $45M "Reload Airdrop" with partners such as Four Meme, PancakeSwap, and TrustWallet targets over 160,000 memecoin traders affected by volatility, with random BNB drops starting this week and expected to be fully distributed by early November. CZ chimed in: "Talk is cheap," touting the total $728M relief as real user protection.

This reeks of damage control after $19B in liquidations, but it's savvy; shifting pricing to conversion ratios for wrapped assets prevents future crashes. For BNB holders, the airdrop could juice sentiment, but watch for regulatory scrutiny on listings. If you're farming BNB Chain memes, eligibility focuses on recent loss-makers. Long-term, Binance's dominance remains, but DEXes like Hyperliquid are eating into centralized exchanges' market share.

This edition of the newsletter is co-presented by Masterworks.

Vanguard just projected public markets may return only 5% annually over the next decade. In a 2024 report, Goldman Sachs forecasted the S&P 500 may return just 3% annually for the same time frame—stats that put current valuations in the 7th percentile of history.

Translation? The gains we’ve seen over the past few years might not continue for quite a while.

Meanwhile, another asset class—almost entirely uncorrelated to the S&P 500 historically—has overall outpaced it for decades (1995-2024), according to Masterworks data.

Masterworks lets everyday investors invest in shares of multimillion-dollar artworks by legends like Banksy, Basquiat, and Picasso.

And they’re not just buying. They’re exiting—with net annualized returns like 17.6%, 17.8%, and 21.5% among their 23 sales.*

Wall Street won’t talk about this. But the wealthy already are. Shares in new offerings can sell quickly but…

👉 My subscribers skip the waitlist

_{*Past performance is not indicative of future returns. Important Reg A disclosures: masterworks.com/cd.}

Now, let's continue with the top stories of the day.

The DOJ dropped a bombshell: indicting Cambodian tycoon Chen Zhi for running a transnational "pig butchering" scam via forced-labor compounds, defrauding billions in crypto.

They've seized 127,271 BTC ($14.4B), the largest crypto forfeiture ever, from wallets tied to a 2020 LuBian mining theft, now in U.S. custody. The Treasury sanctioned the Prince Group as a criminal organization and cut off the Huione Group from U.S. financial resources for laundering proceeds from scams.

In parallel, Celsius's wind-down secured $300M from Tether to settle a $4.3B bankruptcy claim, part of BRIC's (GXD Labs and VanEck) portfolio, which manages illiquid assets following the 2022 collapse. This boosts creditor recoveries after $3B already distributed.

The seizure fuels speculation about Trump's BTC reserve, but it remains locked in legal limbo; don't expect quick sales. Pig butchering scams highlight crypto's dark underbelly; expect tighter KYC on exchanges. For Celsius holders, this is a win, but full payouts are still pending. Broader implications: Regulations are maturing, with MiCA in the EU and U.S. tariffs indirectly pressuring offshore operations.

Coinbase is doubling down on emerging markets, boosting its stake in India's CoinDCX at a $2.45B valuation, building on Ventures' 2020 bets. With 20M+ users and $165B in volumes, CoinDCX eyes Middle East expansion via BitOasis acquisitions. This aligns with Coinbase's onchain economy bet in high-adoption regions.

In Europe, French banking behemoth ODDO BHF (managing €150B AUM) launches EUROD, a MiCA-compliant euro stablecoin, listing on Bit2Me, bridging TradFi and crypto for payments. It joins SocGen's efforts and a nine-bank consortium, signaling demand for a stable eurocoin amid the dominance of the USD.

On the tech front, Rootstock Labs unveiled Rootstock Institutional for BTC DeFi, rolling out lending and yield services via partners like LayerBank, with plans to add RWA strategies through 2026.

Hyperliquid's equity perps went live on trade.xyz, offering 20x leverage on indices like XYZ100, no gatekeepers, first HIP3 deployment. And Monad's airdrop claim portal opened yesterday on claim. monad.xyz, expect frenzy for this 10K TPS EVM layer-1.

These moves scream institutionalization. Coinbase's India play taps 1B+ population for user growth; EUROD could fragment USD stables (watch USDT volumes). Rootstock and trade.xyz expands BTCFi liquidity, while Monad's drop could pump L1 narratives. Allocate to emerging chains like Monad pre-mainnet, but hedge with BTC yields. Opportunity: Bridge to Rootstock for 5-10% APYs on BTC.

Today's newsletter is also powered by Proton Mail.

Gmail tracks you. Proton doesn’t. Get private email that puts your data — and your privacy — first.

Ditch the Gmail data grab

That's all for today. Let's talk tomorrow.