Weekly Research Brief: BTC's Bounce, SOL's Tokenomics Debate, Coinbase's Tokenized Stocks

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In this week's edition, Alex Thorn looks at bitcoin’s remarkable rebound; Alex separately analyzes Coinbase’s tokenized stock offering; and Lucas Tcheyan breaks down recent Solana governance votes.

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Bitcoin Logs Biggest Weekly Dollar Gain as It Chases 50-Week Moving Average

BTC saw the single largest one-week gain by dollar amount in its entire history for the week that closed Sunday night, rising $14,775 between Sunday, Aug. 16 and Sunday Aug. 23. By percentage, last week’s BTCUSD weekly candle ranked 41st of 840 weeks in BTCUSD history at +23.5%. Since 2020, only three weeks had a larger percentage gain: March 19, 2023 (+27.7%), Jan. 3, 2021 (+25.9%), and Feb. 14, 2021 (+25.2%).

This week, BTCUSD has traded as high as $81,265 (on Tuesday) and appears to be facing some resistance as it tries to surpass the 50-week moving average (currently ~$81,795).

Last week also saw the largest bitcoin ETF inflows since October 2025’s all-time high, and August is on track to close as the biggest inflow month since October as well.

The rally came during a period of extremely low volatility, with both realized and implied volatility printing near all-time lows. A substantial catalyst was the return of the debasement trade sparked by Treasury Secretary Scott Bessent’s announced expansion of bond buybacks (on the long end), with both gold and BTC rallying after the Wednesday, Aug. 19, announcement. President Trump also hosted crypto executives at the White House and delivered pro-crypto remarks, including calling on Congress to pass the CLARITY Act, and crypto executives held the first meeting of the CFTC’s Innovation Advisory Committee. Both events resulted in substantial positive regulatory headlines and may have contributed to last week’s positive performance.

Our take

While the launch from near the 200-week MA ($64k) to the $80k level was historic – the biggest weekly gain in BTC history in dollar terms – it was also aided by substantial short liquidations, gamma squeeze, and momentum chasing. With other risk assets (such as AI-related stocks) near all-time highs, and bitcoin trading more than 50% off its prior all-time high but also failing to make new lows, BTC was primed to receive inflows from allocators who correctly assessed that it looked “cheap.” Finally, the return of the debasement trade narrative, more from the signal in Bessent’s announcement than its substance, has been a major tailwind as well. Given the U.S. debt profile, the debasement narrative will likely remain highly relevant to investors, which could benefit long-term bitcoin bulls, even if interest in the debasement trade ebbs and flows on shorter time frames.

As discussed in a recent Galaxy client alert, in four of the five completed bear markets, once the 50-week moving average was first broken to the upside, the bear market bottom was definitively “in.” (The only exception is during the mini-bear market in between the April and November 2021 all-time highs, a period that most bitcoin analysts don’t even consider to be a “full bear market.”) Essentially, retaking the 50w MA has previously confirmed the end of a bear market. Right now, BTCUSD is knocking on the door of the 50-week MA, which will almost certainly drop from $81.8k to ~$81.1k at candle close on Sunday, Aug. 30 (as a week from September 2025 rolls off the average).

If bulls can push BTC to close a weekly candle above the 50w MA, history suggests the bear market may be over. – Alex Thorn

Solana Stakeholders Debate SOL Issuance and Burn Rates

Solana stakeholders are deciding whether to update its issuance schedule and fee mechanisms as votes on Solana Governance Proposals (SGP) 0002 and 0003 approach their conclusion (the formal vote closes at ~11:15 am EST Friday).

SGP-0002 would revamp Solana’s issuance schedule by doubling the annual disinflation rate to 30%, reducing projected issuance by ~18.9 million SOL over the next six years and reaching Solana’s terminal inflation rate of 1.5% in roughly three years instead of six. SGP-0003 would update Solana’s fee mechanisms. Rather than pay a set 5,000 lamports (1 billion lamports equals 1 SOL) per-signature base fee, the proposal splits the fee into a 2,500 lamport base inclusion fee and a resource fee that scales with the amount of cost units the transaction consumes (essentially the complexity and computational overhead of the transaction). Projections estimate daily SOL burn could rise from ~648 SOL to upwards of ~7,500 if the plan is implemented.

Both proposals are being considered under Solana’s new governance framework (itself up for a formal vote under SGP-0001) that introduces a “Solana Constitution” and a mechanism for validators and stakers to shape the network’s trajectory by proposing SGPs. Quorum requires one-third of network stake with greater than two-thirds voting in favor to pass. Solana’s SIMD governance framework, primarily used by its core developer shops to implement technical updates, will remain in place.

At the time of publication (8/28/26 at 9 am), SGP-0002 and SGP-0003 have met quorum but do not have a sufficient FOR majority to pass.

Our take

As we discussed on a recent episode of Galaxy Grid, the business of blockchains is evolving. Activity and speculation alone are not enough to justify the native token appreciating in price. Investors are demanding better economics and tangible value accrual that link onchain activity to the token. SGP-0002 and SGP-0003 show what that looks like at the underlying token issuance and consumption level by reducing overall supply and increasing burn.

Both proposals initially looked like they would be approved with an overwhelming amount of FOR votes early on. The latest tallies, however, demonstrate there is still no clear consensus across the ecosystem. Whether or not they ultimately pass, the general direction of both proposals is correct. Solana’s issuance and fee mechanisms were designed at a time when future demand was highly uncertain. As we have argued repeatedly, at that time issuance was a bootstrapping mechanism for the network. Solana’s long-term viability depends on an onchain economy where demand for blockspace drives fees and validator income. Solana’s initial fee design differentiated the chain by creating an incredibly cheap platform to transact on but was conceived at a time when many assumed value would accrue at the network level rather than the application level.

Neither proposal is perfect, and their implementation would come with tradeoffs. One of the biggest areas of pushback has been that they create uncertainty over whether issuance and fee parameters might change again. If issuance and fee schedules can change through a vote, how can validators and businesses plan? While SOL inflation is the not the be-all and end-all for validator sustainability, prematurely reducing rewards could make running a validator on SOL unattractive if it does not lead to material appreciation in SOL’s price or if fees do not pick up to compensate for the loss (see our Solana Q2 report for an overview of validator economics). For businesses that service their customers by paying for blockspace, an adjustment in fee policy could dramatically impact their operations, requiring major updates to their code (although if that requires them to improve the efficiency of their transactions, that should be a net benefit over the longer term) and reducing margins.

Too much certainty, however, is an impediment to Solana’s growth. There needs to be built-in flexibility to ensure these chains can adapt to shifting technical and economic environments. While protocol ossification is a necessary characteristic of a store of value like Bitcoin, it is not necessary for an ecosystem that aims to host the world’s economy and must adapt to an ever-changing external environment.

Any change will always have tradeoffs, creating winners and losers. The key is to ensure a governance system that enables all stakeholders to have a voice in shaping the chain’s trajectory and ultimately results in more winners than losers. –Lucas Tcheyan

Coinbase Enters Tokenized Stock Fray on Third-Party ‘Wrapper’ Side

On Monday, Coinbase launched tokenized equities on its layer-2 network Base. According to the launch announcement, “a Coinbase Tokenized Stock is a real share that you actually own, onchain. Authorized participants, which are institutional market makers, buy the shares. Those shares go to Alpaca, a regulated broker and custodian, in a bankruptcy-remote structure supervised by Abu Dhabi Global Market’s (ADGM's) regulatory authority. If you hold the token, you hold a direct claim on the share. Coinbase Tokenized Stocks are the real deal.” Tokens are built on the company’s previously announced B20 standard.

Coinbase launched with four stocks in the first batch: NVIDIA (NVDAc), Meta (METAc), Apple (AAPLc), and Alphabet (GOOGLc). In total, about $7.5m worth of share supply in these four stocks currently exists on Base. Coinbase has created contracts for 13 stocks in total, but only those four have any circulating supply. The others are AMZN, COIN, CIRCL, INTC, MSFT, MSTR, SNDK, SPCX, and TSLA.

These tokenized stocks are not accessible to Americans, though with a VPN they can be accessed through the Uniswap or Aerodrome frontends. Coinbase also announced that it is allowing its tokenized stocks to be used as collateral in Aave on Base.

Our take

The march to tokenize stocks continues, though yet again the activity is offshore. For the U.S., the market is still waiting for the Securities and Exchange Commission (SEC) to publish its long-awaited “innovation exemption,” a time-limited exemptive relief that we expect will allow for the trading of Reg NMS stocks in decentralized finance trading protocols.

While Regulation Crypto Assets (“Reg Crypto”), published by the SEC last week, is a formal rulemaking proposal relating to the primary issuance of non-security tokens (and primarily modifies compliance obligations under the Securities Act), the innovation exemption relates to the secondary trading of securities under the Exchange Act.

Bloomberg reported in May that the SEC was on the verge of announcing the innovation exemption, but then internal disputes about whether to include third-party issuer tokenized stocks (also sometimes called “wrappers”) in the exemption caused the regulator to delay its rollout. The SEC may also have delayed publication to avoid complicating the ongoing CLARITY Act negotiations in the U.S. Senate. As we wrote several weeks ago, though, the clock is now becoming an issue.

Assuming the “innovation exemption” will ultimately be a time-limited sandbox meant to pilot stock trading onchain, participants need sufficient time to surface issues to inform eventual rulemaking. Then the rulemaking itself will take a long time, and it’s also likely to result in litigation. And presumably this needs to progress from sandbox to adopted rule in the next 28 months before the Trump administration leaves office.

Coinbase’s design, as with most tokenized stocks today, is the “third-party issuer” variety. There is no evidence that NVIDIA, Meta, Apple, or Google consented to the tokenization of their stocks in this manner. We’ve previously noted that third-party issued stocks obviate the relationship between issuer and shareholder potentially to the detriment of both. The question of “what you actually own” when you buy a third-party issued token, such as those issued by Ondo, xStocks, or now Coinbase, is a real one. The trickiness of the situation was highlighted in Coinbase’s own launch announcement, in which it called the stock tokens are “a real share that you actually own” but, just two sentences later, said “you hold a direct claim on the share.” Which is it? A real share, or a claim on a share?

In these wrapped setups, the tokenholder’s relationship is actually to a third-party structure of some kind (in this case, Coinbase Onchain SPV Ltd., a special-purpose vehicle incorporated in Abu Dhabi), not the issuer of the underlying equity. The extent to which shareholder rights are passed to the tokenholder is determined by the third-party issuer’s terms and conditions. In the case of Coinbase Tokenized Stocks, the token represents a beneficial interest in the pool of deposited shares and economic interest in the shares’ value, while legal title generally will remain with the trust, and tokenholders’ ability to exercise shareholder-related rights is essentially determined by the SPV (more details on that in the prospectuses for the tokens; AAPLc, for example).

Tokenized GLXY, on the other hand, is an issuer sponsored tokenized security, because we (Galaxy, the issuer) explicitly honor it as Class A Common Stock, and it is tracked and maintained by our own SEC-registered transfer agent, Superstate. This is the core of the dispute in the marketplace on this topic: third-party issued tokenized stocks scale better but have legal drawbacks, while issuer-sponsored tokenized stocks are less scalable to launch because each issuer needs to take action to enable it, but they carry much clearer shareholder rights. (For a fuller explanation of the terms “third-party issued” and “issuer-sponsored,” read our writeup on the SEC’s security token taxonomy from January.)

It’s still unclear where the SEC is going to come down on this issue for the innovation exemption, or when the SEC will publish the innovation exemption at all. Ultimately, we hope the exemption will allow for innovation and experimentation, albeit within limits and under the SEC’s watchful eye, so that the market will have an opportunity to decide the best way forward. – Alex Thorn

Other News

• 👔 JPMorgan said to weigh launching its own stablecoin...

• 💶 ... as U.K. fintech Revolut rolls out euro-backed stablecoin ...

• 🇺🇸 ... and 39 U.S. state bank associations plan their own blockchain network

• 🖥️ Perplexity, Nvidia partner to run AI directly on desktop

• 🗳️ Decision markets expand from Solana to Ethereum

• ❗ Cosmos Labs urges ecosystem’s EVM chains to halt after attack on 3 ...

• ‼️... and Bitcoin L2 Core Lightning tells node operators to go offline, too

• 🔷 Ethereum devs propose first step to protect staking from quantum attacks

• 🌎 Interchain bridge LayerZero tees up Atlas, a ‘universal backend’ for trading

• 🔏 Grayscale launches first spot Zcash ETF

Charts of the Week: Polymarket US Nips at Flagship Exchange’s Heels

Polymarket US is catching up with its namesake.

Last week, the U.S. prediction market hosted $870m of trading volume, compared to $1.2b on the flagship offshore exchange. Six months ago, Polymarket US volume was ~$60m, a sliver of Polymarket’s overall business.

This is a surprising outcome, and not only because Polymarket US launched only in December and reportedly got off to a rocky start. It is a regulated centralized venue that requires KYC, whereas the original, onchain version of Polymarket is global, permissionless, and six years old (a lifetime in crypto).

You might expect a fledgling, gated exchange to lag far behind an established, open one. Then again, despite its advantages, the international Polymarket was overtaken last year by its U.S.-only archrival Kalshi, which has since pulled far ahead. Kalshi capitalized on its regulated status by integrating with trading apps, including Coinbase and Phantom, which could not have legally offered unregulated Polymarket bets to their U.S. users. Turns out, regulation is distribution.