Coinbase Facilitates DeFi Funding via USDC Amid $40.7B Active Loan Record

Cryptocurrency

Summary:

A Coinbase spokesperson explained that the timing reflects current market conditions and growth opportunities.

Coinbase launched a second Stablecoin Bootstrap Fund to provide additional liquidity for the DeFi ecosystem via USDC.

According to an Aug. 12 announcement, the initiative will target protocols across multiple blockchains, starting with Aave, Morpho, Kamino, and Jupiter. Coinbase also invited protocols seeking liquidity to reach out to the exchange.

The fund represents Coinbase’s renewed commitment to accelerating stablecoin adoption across mature and emerging protocols after its original 2019 Bootstrap Fund.

Time for growth

Coinbase’s first Bootstrap Fund helped establish marketplaces for USDC across blue-chip DeFi protocols such as Uniswap, Compound, and dYdX during the early stages of DeFi development.

Notably, USDC has become the leading stablecoin in DeFi with an estimated $8.9 billion in total value locked (TVL) and $2.7 trillion in annual on-chain transaction volume.

A Coinbase spokesperson explained in a note that the timing reflects current market conditions and growth opportunities:

“We’re at an inflection in adoption of onchain financial services. We saw how successful the first fund was in helping drive the initial wave of onchain stablecoin liquidity, and saw an opportunity to leverage Coinbase’s resources to further accelerate the interest and adoption that we’re seeing today.”

The record-breaking $40.7 billion in active DeFi loans represents one factor motivating the fund’s launch.

However, the spokesperson noted crypto-backed loans constitute “a prime example of this adoption and ongoing growth, but not the only reason” for the initiative.

The fund seeks to ensure deeper liquidity for stablecoins across the on-chain ecosystem, enabling users to access reliable rates across both established and emerging protocols.

Scaling over time

Coinbase plans to scale the fund over time and distribute liquidity across additional protocols and stablecoins beyond the initial four recipients. The launch can have a direct and positive impact on USDC usage in DeFi.

Adding more liquidity to the largest decentralized money markets will decrease the borrow rate for USDC on those venues, potentially making the stablecoin more interesting for on-chain leverage. The fund could also bring more money on-chain.

Lastly, the company expressed particular interest in collaborating with pre-launch teams or projects seeking to drive stablecoin growth from inception.

The spokesperson concluded: “We believe now is the time to build, and the Stablecoin Bootstrap Fund is here to inject liquidity in projects that can make an impact on the ecosystem no matter the size.”

Source: Cryptoslate

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Manuel

Economic

Stocks

The S&P 500 (^GSPC) hit another record close on Tuesday and ended the trading day above 6,400 for the first time ever.

As has been the case for much of the bull market that started in October 2022, large-cap technology stocks are driving the market's latest leg higher. This was on full display Tuesday with Meta (META) and Palantir (PLTR) rising more than 2% to close at record highs.

"Investors are back to their usual embrace of US large cap Tech stocks over large caps in general and the move is not yet overdone," DataTrek Research co-founder Jessica Rabe wrote in a Tuesday research note.

Rabe highlighted how the top 20 stocks by market cap in the index have risen an average of 40.6% since the bottom, far outpacing the benchmark index's 27.9% gain over the same time period. This means the top 20 holdings have helped pull the index higher, while the other 480 stocks have been "a net drag" on the index in relative terms.

Nearly all of the names in the group that have outperformed the S&P 500 index — which includes Nvidia (NVDA), Microsoft (MSFT), Apple (AAPL), Amazon (AMZN), Alphabet (GOOGL, GOOG), Meta, Broadcom (AVGO), Tesla (TSLA), JPMorgan (JPM), Netflix (NFLX), Oracle (ORCL), and Palantir — have some sort of AI growth story attached to the stock story.

"Ultimately, Tech companies that leverage disruptive innovation — such as gen AI — drive US equity returns," Rabe wrote.

And when looking at the market's rebound on a sector basis, there's an AI tilt. Only Information Technology (XLK) and Industrials (XLI) have outperformed the index since the market bottom.

Citi US equity strategist Scott Chronert, who recently raised his year-end S&P 500 target to 6,600, told Yahoo Finance the Industrials rally is really just an extension of the AI trade, as those companies benefit from increased AI spending.

"You're seeing this broader AI influence really permeate the index at a bigger level than just tech," Chronert said.

And Chronert believes the longer-term opportunity in the market remains in identifying companies that will eventually benefit from AI boosting margins and productivity within their businesses.

"We're still probably early innings in terms of the AI infrastructure buildout," Chronert said. "The bigger, longer term play is going to be more companies incorporating AI to better get their own company production and profitability metrics sort of in their own strategic up and to the right pattern."

Source: Yahoo Finance

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Manuel

Economic

“Made in the U.S.A.” labels may appeal less to consumers as rising tariff costs are changing people's attitudes about where products are made.

A new study by The Conference Board found consumers are now less likely to purchase a product based on where it's made, even if it's in the U.S. The June survey of 3,000 U.S. adults found that 50% said they were more likely to buy American-made products, down from 60% in a similar survey from 2022.

It’s not just American-made products, either. Consumer loyalty was lower for products made in every country included in the survey.

The sentiment shift comes as President Donald Trump instituted a series of tariffs that he said would help boost American manufacturing, potentially enabling businesses to offer more products made domestically. However, price-conscious buyers are more focused on a product’s price than where it’s made, the report found.

“As price concerns intensify, many U.S. consumers appear to associate ‘made in’ labels with elevated prices due to generally higher domestic production costs as well as tariffs on foreign-made goods,” said Denise Dahlhoff, director of marketing and communications research at The Conference Board. “Increasingly, consumers prioritize value and affordability over emotional affinity for certain countries, including their own.”

Support for American-Made Products Drops for Older Buyers

Support for American-made products dropped across almost every age group and demographic category, with those younger than 35 being the only group more likely to buy American-made products than they were three years ago.

Notably, customers older than 55 were among the most likely to lose support for buying products with the “Made in the U.S.A.” label, dropping 22 percentage points from three years ago.

American-made products were most popular with middle-income consumers; those making between $50,000 and $125,000 a year were most likely to purchase domestically produced goods.

Source: Investopedia

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Manuel

Cryptocurrency

Do Kwon pleaded guilty to federal fraud charges in Manhattan court, with his sentencing set for Dec. 11.

As Inner City Press reported on Aug. 12, Kwon admitted he orchestrated a cryptocurrency scheme that prosecutors allege caused over $40 billion in losses when LUNA and TerraUSD tokens collapsed in May 2022.

His defense entered guilty pleas to conspiracy to defraud and wire fraud before Judge Paul Engelmayer at the Southern District of New York (SDNY) courthouse.

Kwon acknowledged making false statements about Terra’s operations and knew his statements were misleading investors.

He told the court:

“Between 2018 and 2022 in the SDNY and elsewhere I knowingly agreed to participate in a scheme to defraud purchasers of cryptocurrencies from my company, Terraform Labs. I made false statements about how the peg was restored, and the role of another firm. I knew my statements were false.”

The plea agreement stipulates financial penalties exceeding $19 million and establishes sentencing guidelines at 25 years imprisonment. Prosecutors agreed to recommend no more than 12 years if Kwon accepts responsibility and commits no additional crimes.

The charges carry a statutory maximum of 25 years, with conspiracy charges carrying five years and wire fraud carrying 20 years.

Judge Engelmayer scheduled sentencing for December 11 at 11 am, when Kwon will learn his final prison term for the Terra ecosystem fraud.

Terra ecosystem collapse and market impact

FatMan, a prominent figure in post-Terra collapse investigations, commented on the guilty plea outcome:

“Do Kwon’s guilty plea means he will most likely serve 15 to 20 years instead of the statutory maximum of 25. Prosecutors will recommend 12. This is some vindication after years of work. But make no mistake – Do Kwon is also becoming the fall guy for Jump [Crypto] and Kanav Kariya [former Jump Crypto president].”

Prosecutors allege Terraform’s products were inherently unstable and required ongoing manipulation to maintain their market value and stability.

The May 2022 collapse sent shockwaves through crypto markets, contributing to broader digital asset sell-offs that erased hundreds of billions in market capitalization.

Kwon’s capture followed nearly a year on the run after the Terra collapse. Montenegrin authorities apprehended him in March 2023 while he attempted to travel using fraudulent passport documentation.

Source: Cryptoslate

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Commodity

Gold prices are slightly down in midday U.S. trading but well up from overnight lows following a U.S. inflation report that is being deemed as non-problematic but still not dovish. Some light profit taking from the shorter-term futures traders is featured today. Silver prices are moderately higher at midday. December gold was last down $5.90 at $3,399.20. September silver prices were up $0.223 at $38.01.

Today’s July U.S. consumer price index report showed a rise of 2.7%, year-on-year, versus expectations for up 2.8%. The core rate (minus food and energy) was up 3.1%, year-on-year and was expected to come in at up 3.0% and compares to a rise of 2.9% in the June report. The marketplace has been betting on a quarter-point interest rate cut at the Fed’s Sept. 17 FOMC meeting. Some are even thinking tame inflation data today could give the Fed a green light for a half-point cut in September. Today’s CPI data was close to market expectations but does not fall squarely into the camp of the U.S. monetary policy doves. Still, it looks like the stock and financial markets don’t have a problem with today’s CPI numbers. The solid rallies in the U.S. stock indexes were bearish for the safe-haven metals, from a competing asset class perspective.

Gold traded modestly lower overnight after President Trump Monday said imports of bullion won’t be subject to U.S. tariffs. The Trump administration's decision regarding gold tariffs roiled the gold market the past two trading sessions. U.S. tariffs on gold bullion would have major implications for flows around the world.

Bloomberg reports Wealthy investors in Asia have shown strong appetite for gold, with those in Hong Kong more than doubling their allocation to the precious metal in a year, according to a 2025 HSBC survey. Some billionaire families are earning returns by lending their physical bullion to local jewelers, while others are entering profit-sharing ventures or playing the arbitrage game, buying discounted bars in one market and selling them for premiums in another, said Bloomberg.

The key outside markets today see the U.S. dollar index solidly lower, with crude oil prices down and trading around $63.25 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently around 4.4%.

Gold down on mild profit taking, rally in U.S. stocks_1

Technically, December gold futures bulls have the firm overall near-term technical advantage but faded today. Bulls’ next upside price objective is to produce a close above solid resistance at $3,500.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the July low of $3,319.20. First resistance is seen at today’s high of $3,410.80 and then at $3,450.00. First support is seen at $3,375.00 and then at $3,350.00. Wyckoff's Market Rating: 7.0.

Gold down on mild profit taking, rally in U.S. stocks_2

September silver futures bulls have the firm overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at the July high of $39.91. The next downside price objective for the bears is closing prices below solid support at the July low of $36.28. First resistance is seen at this week’s high of $38.56 and then at $39.00. Next support is seen at the overnight low of $37.515 and then at $37.00. Wyckoff's Market Rating: 7.0.

Source:kitco

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Economic

President Donald Trump on Tuesday threatened to allow a “major lawsuit” against Federal Reserve Chairman Jerome Powell to proceed, escalating his pressure on the central bank leader to cut interest rates.

Trump said in a Truth Social post that the suit would relate to Powell’s management of pricey renovations at the Fed’s headquarters in Washington, D.C., which the president has previously criticized.

Trump did not say when that suit could be filed or by whom.

“Jerome ‘Too Late’ Powell must NOW lower the rate,” Trump wrote in the post.

“Steve ‘Manouychin’ really gave me a ’beauty’when he pushed this loser,” Trump wrote, referring to his first-term Treasury Secretary Steven Mnuchin having encouraged him to nominate Powell as Fed chair in 2017.

“The damage he has done by always being Too Late is incalculable. Fortunately, the economy is sooo good that we’ve blown through Powell and the complacent Board,” Trump claimed.

“I am, though, considering allowing a major lawsuit against Powell to proceed because of the horrible, and grossly incompetent, job he has done in managing the construction of the Fed Buildings.”

“Three Billion Dollars for a job that should have been a $50 Million Dollar fix up. Not good!” he wrote.

White House press secretary Karoline Leavitt declined to share more about the potential lawsuit when asked for clarification later Tuesday.

“He’s considering a lawsuit, and I won’t speak on it any further. I will allow the president to do that,” Leavitt said.

The Fed declined to comment on Trump’s post.

Powell and the Fed have previously defended the ongoing renovations of two historic buildings in D.C., which house the central bank, and explained why costs have risen during the projects.

Powell pushed back on Trump to his face last month when the president visited the construction site and claimed that renovation costs had topped $3.1 billion.

“I haven’t heard that from anybody,” Powell said then.

Trump has railed against Powell for months as he pressured the central bank to quickly slash interest rates by multiple percentage points.

Trump claims that doing so would save the United States vast sums of money by reducing the cost of borrowing to finance government operations.

After raising the benchmark federal funds rate in 2022 in the wake of the Covid-19 pandemic, the Fed gradually cut interest rates multiple times in 2024, the final full year of President Joe Biden’s term in office.

But it has kept rates steady throughout 2025 so far, defying Trump’s demands.

In congressional testimony in July, Powell said the Fed would have already cut rates this year if Trump had not implemented his major tariff policy.

Fed officials in June indicated they expect two rate cuts this year.

Traders currently anticipate a quarter-point rate reduction following the Federal Open Market Committee’s September meeting. Expectations have risen for further cuts after FOMC meetings in October and December.

Source: cnbc

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Stocks

Central Bank

US stocks moved higher on Tuesday as Wall Street digested fresh inflation data and President Trump revealed his pick to head the Bureau of Labor Statistics.

The Dow Jones Industrial Average (^DJI) rose about 1% or more than 450 points. The S&P 500 (^GSPC) popped nearly 1%, while the tech-heavy Nasdaq (^IXIC) also added around 1.1%. Both the S&P 500 and Nasdaq Composite were pacing for record closes.

The latest data from the Bureau of Labor Statistics showed that "core" inflation, which excludes volatile food and energy costs, rose 3.1% over the past year in July, ahead of June's 2.9% increase. The reading indicated that rising goods inflation is no longer being offset by easing services inflation.

But on a headline basis, the Consumer Price Index (CPI) increased 2.7% year over year, matching June and coming in softer than economists' expectations of a 2.8% rise.

The report was the first major piece of economic data to be released by the Bureau of Labor Statistics after Trump fired Erika McEntarfer as commissioner earlier this month, following the release of the July jobs report. Late Monday, Trump announced that he nominated E.J. Antoni, chief economist at the conservative Heritage Foundation, to lead the agency.

Investors will get two more pulse checks on the state of the economy later this week, with the release of the Producer Price Index on Thursday and retail sales data on Friday.

In corporate news, Intel (INTC) stock gained over 1% after CEO Lip-Bu Tan met with Trump, who had called for Tan's resignation just last week.

After the meeting, Trump posted to Truth Social calling the meeting "a very interesting one" and hailing the CEO's "success and rise" as "an amazing story."

On Tuesday, reports said China urged local firms not to use Nvidia H20 chips, complicating Trump's bid to turn those sales into a US windfall. Trump also granted another 90-day pause on the most punishing tariffs on China as the two countries work toward a trade deal.