MUFG: U.S. Dollar Faces Downside Risks Ahead of Speeches by Bessent and Walsh

Serenity remains bullish on optical communications stock Applied Optoelectronics (AAOI) but criticized the company’s at-the-market (ATM) equity financing. “We dislike AAOI’s over-reliance on ATM offerings, a principle that applied equally to IREN and POET before, and we will not treat AAOI differently,” the firm stated. Its sharpest criticism centers on timing: the roughly $600 million ATM should have been launched after the completion of 1.6T optical module qualification, a milestone expected in the coming weeks, or structured as convertible bonds priced above market value. Instead, the company rolled out the offering after its share price dropped from $220 to $130, and every subsequent use of the ATM will trigger short-term structural selling pressure and sustained stock price suppression. Serenity explained its core rationale for maintaining a heavy position in AAOI: the firm faces capacity constraints while demand visibility is very high, making AAOI more attractive than POET. “Investors can hold AAOI’s stock long-term without supporting every business decision of its management,” it said. “You can absolutely criticize the management’s financing pace while still holding its stock based on the supply-demand structure.” AAOI reported 86% year-on-year revenue growth in the second quarter, beating expectations, but its third-quarter guidance was weak. The latest ATM offering has further amplified market concerns over short-term valuation and liquidity.

Pakistan’s Virtual Assets Regulatory Authority (PVARA) has announced the official launch of the country’s cryptocurrency regulatory regime. Digital asset companies must submit applications for No Objection Certificates (NOCs) by the September 5 deadline, or cease operations. PVARA noted that licensed entities must comply with strict operational and security standards, including safeguarding client funds, maintaining robust cybersecurity, providing clear disclosures, and upholding transparent business practices. The licensing rules under Pakistan’s Virtual Assets Act 2026 cover 11 crypto-related activities, including custody, trading platforms, brokerage dealers, and derivatives. Earlier, Pakistan’s State Bank lifted the ban on financial institutions providing banking services to crypto firms in April, though banks themselves remain prohibited from investing in, trading, or holding crypto assets. Pakistan had long adopted a restrictive stance on cryptocurrencies; the establishment of this regulatory framework signals a policy shift from restriction to regulation, aiming to integrate the crypto industry into the formal financial system within anti-money laundering (AML) and consumer protection frameworks.

The European Securities and Markets Authority (ESMA) today updated its MiCA (Markets in Crypto-Assets) register of crypto asset service providers (CASPs), bringing the total number of EU-authorized CASPs to 331. All six new additions are German cooperative banks, including Raiffeisenbank Aidlingen, Ihre Volksbank, VR-Bank Mittelfranken Mitte, Volksbank Euskirchen, VR Bank Ried-überwald, and Volksbank Backnang. Germany remains the EU leader with 79 CASPs, far outpacing France (35) and the Netherlands (29). Since Germany first took the lead in the EU with 57 CASPs at the end of June, the number of authorizations has continued to rise rapidly. Germany’s Federal Financial Supervisory Authority (BaFin) previously explained that its leading MiCA authorization count stems mainly from its large financial sector and numerous credit institutions eligible to offer crypto services. Germany’s existing national licensing regime also played a key role during the transition period, as some CASPs obtained authorizations via streamlined processes, driving a significantly faster rollout than other EU member states. No changes were made to asset reference tokens (ARTs), electronic money tokens (EMTs), or the non-compliant entities list in this update: the ART register remains empty, EMTs stand at 43, and the non-compliant entities list stays at 167. Under the EU’s unified crypto regulatory framework, Germany is seizing an early-mover advantage in compliance.

QCP Capital’s market commentary notes that Bitcoin posted its strongest weekly performance since March 2024 last week, surging over 20% and hitting roughly $79,500 at one point. This rally coincided with sharp shifts in interest rate markets: the U.S. 30-year Treasury yield briefly neared its 2007 high of 5.3%, after which the U.S. Treasury Department announced it would raise the size of its long-end liquidity support repo operations from a maximum of $2 billion per operation to at least $4 billion starting September 9. Long-end yields pulled back in response, the U.S. dollar weakened, and Bitcoin rose in lockstep with gold. Position adjustments accelerated the initial breakout, while spot market participation continued to strengthen. U.S. spot Bitcoin and Ethereum ETFs together drew around $2.6 billion in net inflows last week, marking their strongest single-week inflow since October 2025. This week, market focus has shifted to three macro variables: PCE inflation data, NVIDIA’s earnings (a signal for the AI investment cycle), and Federal Reserve Chair Waller’s first keynote speech at Jackson Hole (a signal for the monetary policy framework). Waller will deliver his speech at 10 PM ET on Friday, while July PCE data and the second estimate of Q2 GDP will be released on Wednesday. QCP concluded that last week’s market moves were driven primarily by position adjustments and U.S. Treasury market dynamics, and whether this week’s data can offer clearer guidance on the macro backdrop will be the market’s core focus.

Flop Labs announced in a post on X that it is focusing on AI agents participating in the Technocore ecosystem. These agents can create unique DID keys and earn FLOP token airdrop rewards by engaging with and promoting the Technocore ecosystem. Arthur Hayes subsequently reposted the post, stating: "Practical AI agents now have more avenues to participate in airdrops and earn FLOP tokens."

According to Israeli media reports, Iran’s state television aired a news segment detailing methods to contact US President Donald Trump’s son Barron Trump, and mentioned a $10 million bounty. The roughly three-minute report displayed locations and online platforms allegedly linked to the purported operation, while also attempting to map Barron Trump’s social circle and find ways to infiltrate the US Secret Service security system. However, the claims about the operation presented in the report rely heavily on staged visuals and provide no evidence to support the alleged plan to contact Barron Trump. The state broadcaster also released a video days ago offering advice on how to assassinate US First Lady Melania Trump. Barron Trump is Trump’s youngest son and the only child he shares with his third wife, Melania Trump.