Happy Friday. Markets head into today’s CPI print on shaky footing as higher oil prices and rising odds of a rate hike dragged BTC, gold and equities lower. ETHFI was the exception, gaining 14.8% as EtherFi Cash continued to post record volumes and grow its share of protocol revenue.

Meanwhile, Robinhood Chain has already blown past our expectations. It generated $38.8M in REV over just 15 days, briefly reaching a $944M annualized run rate. We revisit whether that surge can last and what it could mean for Robinhood’s broader crypto business.

All four major benchmarks finished the day in the red. The S&P 500 fell 0.73% and the Nasdaq declined 1.34%, while gold and BTC both lost 1.87%.

The weakness largely came down to changing interest rate expectations. The odds of a hike next week have risen to 66.7%, up from 52.4% a week ago. Renewed hostilities between the US and Iran have pushed oil above $100, adding to inflationary pressure and strengthening the case for the Fed to keep policy tight.

The US bond market also sold off after the Treasury’s buyback fell short of the expected $6B. Together, higher oil prices, rising yields and a more hawkish rate outlook created a difficult backdrop for risk assets. Some of yesterday’s selling may also reflect investors reducing exposure ahead of today’s CPI release, which could materially shift expectations for next week’s Fed decision.

The weakness extended across crypto, with Crypto Equities the only sector to finish modestly higher.

However, one token stood out in the sea of red. ETHFI gained 14.8% as EtherFi Cash continued to post record weekly volumes and revenue extended its recovery from the June lows. Cash now generates around 60% of EtherFi’s revenue, yet the market continues to value ETHFI primarily as a liquid restaking token. If the team continues to deliver, the growing importance of Cash could support a broader rerating toward a crypto neobank rather than a pure restaking protocol.

ETF flows have also paused after several days of strong inflows, with $17.9M of net outflows yesterday. The market appears to be waiting for today’s CPI print and next week’s Fed meeting before committing to its next move. With rate expectations already shifting quickly, volatility is likely to remain elevated over the coming week.

— Kunal

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Reflecting on Robinhood Chain

Back in the beginning of August, we published a report on Robinhood Chain and the effect it could have on Robinhood Chain’s underlying business. While we were certainly bullish on Robinhood Chain in that report, our ultimate conclusion was that Robinhood Chain would need to get creative with revenue and search for alternative revenue sources beyond traditional ones like chain real economic value (REV). 

Our conclusion wasn’t necessarily an indictment of Robinhood Chain, but rather, an extrapolation of the sobering reality of blockchain economics. REV, across the board, is in a secular decline as total REV was at its lowest monthly levels since before the 2021 bull run. 

Since this report was published, Robinhood Chain has gone on one of the most spectacular runs of any blockchain ever, and it’s time to revisit our prior expectations about how Robinhood Chain REV may impact the overall Robinhood business. 

Robinhood Chain REV started picking up in the latter half of August, and truly started going parabolic in September. Over a 15-day period from August 27 to September 10, Robinhood Chain recorded $38.8 million in REV, nearly on par with the $43.1 million figure we expected it to pull in for the entire year. For the sake of comparison, over that 15-day stretch, Robinhood Chain was operating at a $944.0 million annualized REV run rate. That run rate is over 2x greater than the annualized revenue of Robinhood Crypto in Q2. 

To further put into perspective just how unparalleled Robinhood Chain’s meteoric rise has been, during that aforementioned 15-day period, it was operating a level of REV that the entire L2 sector combined has never been able to operate at, not even for a single day. 

Now, to address the giant elephant in the room, just how sustainable is this REV?

Robinhood’s REV numbers have largely been built off the back of, you guessed it, memecoins. Memecoins are traditionally one of the largest drivers of REV, but come at the cost of extreme volatility. Memecoin and other speculative activity on Robinhood seems to be pulling back too, with some of the standout tokens during this run already down 30% or more from the highs. 

With that in mind, REV seems to have at least locally peaked here, with September 9 and 10 “only” at $1 million (compared to the high of $8.3 million on September 4). For Robinhood Chain REV to be a $100 million annualized revenue line for Robinhood, it needs to operate at ~$274,000 daily REV, so this mark seems entirely within reason for Robinhood Chain to maintain given its currently operating at ~4x that. 

Although it’s unlikely (we won’t say impossible given how our predictions in the report went) for Robinhood to maintain its peak activity going forward, it only needs to operate at a fraction of that level for REV to be a meaningful driver to not only Robinhood Crypto, but to the Robinhood business as a whole. 

And lastly, while the focus has been on REV, let us not forget that Robinhood Chain can impact Robinhood revenues beyond just REV. In fact, there may be reason to believe that this is already happening as Robinhood reported that its August crypto volumes were up 61% MoM. Just how much of this increase is attributable to the success of Robinhood Chain is unclear (crypto did finally put in a strong move off the bottom, which certainly played a part in the MoM increase), but it's not unreasonable to assume that Robinhood Chain did have a positive impact. Ultimately, Robinhood Chain has been a success beyond our wildest dreams, and it may prove to be the catalyst Robinhood needed to bring back crypto as one of its biggest revenue drivers. 

— AJC

PumpFun: Undervalued or Worthless?

Blockworks Research argues that PUMP is one of crypto’s most mispriced assets, combining a dominant memecoin infrastructure business with growing consumer exposure. Pump generates $677M in annualized revenue but trades at just 2.8x sales, partly because the market tracks the declining memecoin sector rather than Pump’s record revenue in SOL. Programmatic buybacks funded by 50% of revenue currently absorb roughly 17.6% of circulating supply annualized, while insider selling has remained limited and frontend volume has grown 5.6x since July. 

Everyone will Trade

The article argues that the rise of memecoins, prediction markets and social trading is not simply a response to economic frustration, but part of a longer shift toward retail-led markets. It compares crypto to YouTube, which turned content creation into a permissionless global industry and allowed individual creators to become major institutions. Crypto is doing the same for finance by giving anyone access to 24/7 markets, new trading primitives and public performance records. As the trend matures, trading could become a spectator sport, capital may flow toward transparent onchain traders and vaults, and distribution will matter more for founders and investors. Most participants will still lose money, but retail could increasingly drive market activity.