What Is $WATER

On August 15, the Cboe BZX Exchange, a subsidiary of the Chicago Board Options Exchange (Cboe), submitted a rule change application to the U.S. Securities and Exchange Commission (SEC) to launch the first U.S. 3x leveraged Bitcoin and Ethereum ETFs. According to the documents, Cboe plans to list a 3x Bitcoin ETF, a 3x Ethereum ETF, as well as 3x ETFs for gold, silver, crude oil, and natural gas. These products aim to achieve three times the daily return of the underlying assets by holding futures contracts from the Chicago Mercantile Exchange (CME) or the New York Mercantile Exchange (COMEX), using cash and cash equivalents as collateral. The proposed ETFs will operate as a 'commodity pool' and will be regulated by the U.S. Commodity Futures Trading Commission (CFTC), rather than the traditional ETF structure regulated by the SEC under the Investment Company Act of 1940. Since leveraged products do not meet the existing general listing standards of the exchange, Cboe needs to submit a specialized rule change application to the SEC and plans to concurrently file an S-1 registration statement under the Securities Act of 1933. Cboe stated that this structure will provide an additional layer of federal oversight. The funds will be issued by Volatility Shares LLC and will be incorporated under VS Trust. Market analysts indicate that 3x leveraged ETFs are primarily aimed at short-term trading and professional investors, and are not suitable as long-term holding tools. Previously, Volatility Shares launched 2x Bitcoin and Ethereum strategy ETFs in the U.S., while the first 3x and inverse 3x Bitcoin and Ethereum ETF products appeared in the European market last year.

On August 15, Morgan Stanley downgraded Circle (CRCL) stock from 'Hold' to 'Underweight' on August 3, significantly lowering the target price from $106 to $38. Analysts stated that the downgrade was primarily due to the contraction in USDC circulation, which exposed Circle's high sensitivity to reserve income. Meanwhile, the company's business structure is shifting towards a revenue model with lower profit margins. The report also reduced the forecasts for Circle's USDC scale in 2027 and 2028 by approximately 33% and 44%, respectively, and projected that the company's GAAP earnings per share would be about 3% and 20% lower than market consensus. However, Morgan Stanley's latest 13F filing shows that as of June 30, its holdings in Circle shares surged from approximately 1.46 million shares to 8.32 million shares, indicating a significant increase in the second quarter. This suggests that while Morgan Stanley publicly downgraded Circle's rating and target price in early August, signaling a cautious outlook, its disclosed holdings as of the end of the second quarter show a notable increase. It is important to note that the 13F filing reflects holdings as of June 30 and does not indicate whether positions were adjusted before or after the August downgrade. The market is focused on the apparent contrast between institutional research views and historical holdings disclosures.

On August 15, Serenity issued a statement and shared images to address recent market rumors about its accounts 'zeroing out', stating that such claims are 'exaggerated'. They noted that despite a significant adjustment in the AI sector in July, their year-to-date (YTD) return remains at 2411.84%. Previously, Serenity had publicly indicated that the sharp decline in AI-related stocks in July led to a temporary drawdown of approximately 49.4% in their investment portfolio, which is primarily focused on key areas of AI infrastructure, including storage, optical communication, robotics, and high-volatility upstream semiconductors. Serenity has long been attentive to the 'bottleneck segments' within the AI industry chain and has conducted research around memory, photonics, CPO, and semiconductor supply chains, gaining market attention for their bets on AI infrastructure-related assets.