Mid-Month Market News

Key takeaways from this month's market activity:

• Senate pushes crypto framework forward: Lawmakers remain optimistic that a bipartisan market structure bill will pass by year-end, aiming to clarify U.S. Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) oversight while embedding consumer protections and ethics rules.
• Nasdaq embraces tokenization: The exchange filed with the SEC to allow trading of tokenized versions of stocks and exchange-traded products, with the first token-settled trades possible by 2026 if approved.
• SEC Chair sets digital asset agenda: In an Organisation for Economic Cooperation and Development (OECD) keynote, Chair Paul S. Atkins outlined “Project Crypto,” reaffirming that most tokens are not securities, calling for modernization of trading and lending rules, and urging global alignment with models like Europe’s Markets in Crypto-Assets (MiCA).
• Solana goes institutional: SOL Strategies secured a Nasdaq listing under ticker STKE, part of a broader $1 billion Solana treasury initiative backed by major firms, signaling how regulated vehicles are bringing institutional scale to the network.
• S&P 500 shifts crypto representation: Robinhood will join the index on September 22 after a sharp rise in crypto revenue, while MicroStrategy was excluded despite meeting eligibility criteria, reflecting the committee’s caution around Bitcoin-centric business models.

Senators Push for Crypto Market Structure Law Before Year-End

Negotiations continue as key senators aim to deliver bipartisan legislation that clarifies how digital asset markets operate under existing regulatory frameworks.

Senators Kirsten Gillibrand (D-NY) and Cynthia Lummis (R-WY) say a crypto market structure bill remains on track to pass by the end of the year, though some deadlines have slipped. The Senate Banking Committee hopes to complete its portion of the work by September 30, while the Senate Agriculture Committee is expected to follow in October. Key goals include defining jurisdictional roles between the U.S. SEC and the CFTC, embedding ethics provisions to avoid conflicts of interest, and protecting consumers and investors.

• Bipartisan momentum: Both Democratic and Republican senators are participating, with Gillibrand and Lummis leading the effort from their parties.
• Timeline slipping but still ambitious: Originally targeted for earlier deadlines, the Banking Committee is aiming for the end of September, with full legislative passage hoped for by year-end.
• Jurisdictional clarity a priority: Lawmakers want clearer division of regulatory authority between the SEC and CFTC to avoid overlapping or inconsistent rules.
• Ethics requirements under discussion: Proposals include barring elected officials and their families from profiting off crypto projects while in office, among other anti-conflict provisions.
• Consumer protection and market integrity: The bill aims to ensure investors are safeguarded, that crypto platforms adhere to transparent rules, and that the framework prevents misuse or illicit behavior.

Nasdaq Proposes Tokenized Stock Trading — A New Phase for Equities

A landmark filing could bring tokenized securities into mainstream equity markets under SEC oversight.

Nasdaq has submitted a proposal to the SEC that would allow the trading of tokenized versions of stocks and exchange-traded products (ETPs). Under the plan, investors could choose to transact in either the traditional or tokenized form, with both carrying the same execution priority, settlement process, and shareholder rights. If approved, the framework could enable the first token-settled trades on a major U.S. exchange as early as 2026, signaling how blockchain technology may be integrated into regulated capital markets.

• Rule change request: Nasdaq is seeking to update its exchange rules so securities and their tokenized counterparts can trade side by side, with identical treatment under order execution.
• Clearing and settlement mechanics: Tokenized trades would still settle through the Depository Trust Company (DTC), using the same identifiers and disclosure standards as traditional securities.
• Rights and protections preserved: Tokenized securities would retain the same material rights, including dividends and voting. If not, they would be listed as distinct instruments.
• Regulatory and infrastructure timeline: Pending SEC approval, tokenized stock trading could begin by Q3 2026, subject to market readiness and system testing.
• Significance for markets: This would mark the first time a U.S. national exchange integrates tokenized securities into its core trading infrastructure, blending blockchain efficiency with regulatory oversight.

SEC Chair Paul Atkins Calls for Clearer Rules on Crypto Innovation

A keynote at the OECD Roundtable put digital assets at the center of the SEC’s modernization agenda.

SEC Chair Paul S. Atkins told global regulators that most crypto tokens do not qualify as securities and called for clearer definitions to guide oversight. He highlighted “Project Crypto,” an SEC initiative aimed at modernizing rules for trading, lending, and staking, while preparing for integrated platforms that could combine custody, trading, and yield services under one framework. Atkins also described blockchain and artificial intelligence as transformative tools for markets, stressing that regulation should enable innovation rather than restrict it, and pointed to Europe’s MiCA framework as a model for global coordination.

• Most tokens not securities: Atkins emphasized that the vast majority of digital tokens fall outside the definition of securities, creating urgency for regulators to clarify boundaries. Without consistent definitions, both innovators and investors face uncertainty that stifles lawful development.
• Project Crypto initiative: The SEC’s modernization effort seeks to provide lawful pathways for activities such as trading, staking, and lending, eliminating gray zones that currently push innovation offshore or into regulatory gaps.
• Integrated platforms anticipated: Atkins argued that regulators should prepare for “super-apps” where trading, custody, lending, and staking converge under one umbrella. Such platforms, he said, demand regulatory frameworks that recognize integration rather than enforce fragmented oversight.
• Blockchain and AI as drivers: Blockchain technology and artificial intelligence were described as catalysts for efficiency in capital markets, from faster settlements to better compliance monitoring. Atkins stressed that rules must be supportive, ensuring safeguards without choking innovation.
• Global alignment needed: Citing Europe’s MiCA as an example, Atkins underscored the importance of cross-border cooperation. As capital markets globalize, inconsistent rules risk regulatory arbitrage, while coordinated frameworks could provide both stability and investor protection.

SOL Strategies Wins Nasdaq Approval as Institutions Build Solana Treasuries

A Nasdaq listing marks a pivotal step for Solana, signaling the blockchain’s shift from retail speculation to institutional adoption.

SOL Strategies, a publicly traded company dedicated to Solana (SOL), has secured approval to list its shares on Nasdaq under the ticker STKE beginning September 9. The move represents a significant step in bringing Solana exposure into regulated capital markets, aligning with a broader institutional effort to create billion-dollar Solana treasuries. The listing underscores how Solana is moving beyond its retail-driven origins and positioning itself as an investable asset class for large institutions.

• Pivot to Solana as core strategy: Formerly Cypherpunk Holdings, the firm rebranded to SOL Strategies after a unanimous shareholder vote in July 2024, committing entirely to Solana token accumulation and ecosystem investments.
• Nasdaq listing to attract institutional capital: Transitioning from the Canadian Security Exchange and the U.S. OTCQB Venture Market, the company expects enhanced liquidity and access to deeper capital markets, opening the door to institutional investors who require regulatory infrastructure.
• Institutional treasury initiative: Alongside the listing, Galaxy Digital, Multicoin Capital, Jump Crypto, and others are coordinating the creation of a $1 billion Solana treasury through public company structures, with Cantor Fitzgerald acting as lead banker.
• Comparable treasury holdings already in place: Upexi has accumulated more than $100 million worth of SOL, while DeFi Development Corp. reports ownership of roughly 846,000 SOL, both employing staking to compound returns.
• Legitimacy through public structures: By channeling Solana exposure into regulated, listed vehicles, institutions seek to differentiate credible investment products from unregulated tokens or short-term speculation.
• Blueprint for other blockchains: If successful, this model could be replicated across other ecosystems, demonstrating how compliance, governance, and yield-generation can drive institutional adoption.

Robinhood Joins S&P 500, MicroStrategy Snubbed—A Signal on Crypto in Traditional Markets

Index inclusion increasingly reflects business model stability and cryptocurrency exposure, not just raw financial metrics.

Robinhood (HOOD) will officially enter the S&P 500 on September 22, joining Coinbase (COIN) in the index, after reporting a ~98% year-over-year increase in its crypto revenue. Meanwhile, MicroStrategy (MSTR), despite meeting all quantitative eligibility criteria, was excluded, illustrating the index committee’s hesitancy toward companies whose operations are heavily tied to Bitcoin price volatility.

• HOOD inclusion effects: Robinhood’s stock jumped on the announcement, benefiting from what analysts call the “index effect”—greater visibility, increased passive investment inflows, and alignment with investor demand for regulated exposure to crypto companies. HOOD’s crypto revenue (≈ $160 million in Q2) contributes significantly to its transaction revenue (~30%).
• MSTR’s exclusion rationale: Although MicroStrategy cleared the formal thresholds for S&P 500 entry—including market cap over $22.7 billion and positive earnings—its Bitcoin-centric business model and high earnings volatility appear to have worked against it. The index committee has discretion to assess business stability and sector balance beyond purely quantitative metrics.
• “Beta vs. balance” tradeoff: Analysts frame the contrast between HOOD and COIN as one between more stable, repeatable earnings (HOOD) and higher upside with higher risk (COIN). For investors, this indicates that risk-adjusted stability may be taking precedence in crypto-adjacent stocks.
• Implications for crypto stocks broadly: With HOOD’s entry, more crypto-linked firms gain representation in a flagship index. For those like MicroStrategy, the exclusion suggests that index inclusion remains as much about perception and business model as about financials. Analysts believe that as institutional comfort with crypto grows, similar firms may eventually be accepted.