As the U.S. midterm elections approach, stock market anxiety is heating up, and the VIX curve is steepening.

World Liberty Financial (WLF), a crypto project linked to the Trump family, saw its CEO Zach Witkoff state Tuesday that the USD1 stablecoin now has a circulating supply exceeding $4 billion, with its 24-hour trading volume peaking at $1.7 billion. He noted the stablecoin’s actual usage demand refutes external allegations that it is used to funnel benefits to Trump and his family. Witkoff added that he "never has and never will" discuss company business with Trump, emphasizing his primary focus is delivering products and services to users. Founded in 2024 by Trump, his son, and related parties, WLF currently operates the USD1 stablecoin and has received conditional approval for a U.S. national trust bank license. Meanwhile, WLF remains mired in conflict-of-interest controversies: a UAE-linked entity reportedly acquired a 49% stake in WLF, and the Trump family is set to earn hundreds of millions of dollars from WLF tokens and related equity transactions in 2025. Witkoff stressed that stablecoins are emerging as the internet’s "native cash layer," with USD1 set to continue expanding its applications moving forward.

Robinhood Chain ecosystem decentralized exchange Arcus has launched the pToken protocol, which tokenizes custodial perpetual contract accounts into transferable ERC-20 tokens, allowing users to gain leveraged asset exposure without directly managing margin and positions, while pTokens can be used in on-chain protocols such as lending. According to Arcus, each pToken represents proportional ownership of a perpetual contract account under a specific market and fixed leverage multiple, and users can trade pTokens just like spot tokens. The platform has rolled out leveraged products for assets including BTC, SOL, and HYPE, such as pBTC and pBTC3x, and also supports stock token leveraged products like pHOOD3x. Additionally, Arcus has introduced multi-asset collateral functionality, enabling eligible stock tokens including SPY, QQQ, and MAG7 to be used as collateral for perpetual contracts, with an initial loan-to-value (LTV) ratio of 50% — letting users access leverage without selling their underlying assets. Robinhood Chain officially launched its mainnet on July 1, with current total value locked (TVL) exceeding $600 million and cumulative DEX trading volume surpassing $26 billion. Arcus reports its cumulative trading volume has topped $250 million, with average daily trading volume over $3.3 million, TVL of $18 million, and more than 85,000 waitlist users for its perpetual contracts.

Canada is imposing tariffs ranging from 15% to 50% on approximately $20 billion worth of U.S. goods, including a hike in tariffs on American steel products from 25% to 50%. The Canadian government announced that starting September 8, it will levy retaliatory tariffs of 15%, 25% or 50% on around 700 products.

While Nvidia’s earnings report and Federal Reserve Chair Kevin Warsh’s Jackson Hole speech remain the week’s market focus, traders have begun positioning in advance for market volatility tied to the November U.S. midterm elections. Data from Cboe shows the VIX futures term structure has risen sharply: the September contract is around 17.4, October climbs to 19, and November further rises to 19.7. Historical data indicates midterm election years typically coincide with higher stock market volatility. Since 1945, actual volatility in midterm election years has exceeded that of the prior year 80% of the time, with an average increase of 3.5 percentage points; the S&P 500’s average annual return in midterm election years is just around 4%. This year’s unique risk centers on the AI investment boom. As backlash against massive capital spending on AI infrastructure emerges within both U.S. political parties, election outcomes could not only reshape congressional dynamics but also directly impact the AI sector—currently the hottest theme in U.S. equities. Cboe has launched S&P 500 daily options expiring on Election Day and the day after. Current market implied pricing shows the S&P 500’s expected single-day volatility on November 4 (the day following Election Day) is approximately 1.4%. Notably, the VIX closed at 15.8 on Monday, still well below its long-term average of 19.4, meaning current market volatility and hedging costs remain at low levels. Analysts note the market is pricing in election risks in advance, but the full scope of actual risks may not yet be fully reflected in asset prices.

Insight Beating AI Flash News: Google Cloud has simultaneously launched Gemini Enterprise for Financial Services and Gemini Enterprise for Legal. These are industry-specific agent platforms built on Gemini Enterprise, marking the first two such versions, with healthcare, life sciences, and other professional services versions also in development. The financial services version targets capital markets and corporate banking. It comes with a built-in Financial Research Agent, over 50 financial capabilities, and 13 data connectors that directly integrate data from FactSet, Moody’s, MSCI, S&P Global, SEC EDGAR, etc., for use in KYC, credit research, portfolio risk analysis, and bond issuance documentation. Deutsche Bank participated in designing the Financial Research Agent and plans to deploy it in its corporate banking division; CME Group has already started using this financial version of Gemini Enterprise. The legal version connects to legal tools and databases including Harvey, Legora, Thomson Reuters, iManage, RelativityOne, supporting contract review, legal research, citation verification, and regulatory tracking. Original system file permissions and case isolation rules will remain in effect, and customer data will not be used to train Google’s base models. This launch is essentially adding "industry suites" to Gemini Enterprise: the model is just the foundation, with core offerings being industry data, permissions, workflows, and specialized agents. Google aims to capture the central entry point for enterprises to access various AI tools.

The U.S. Department of Justice announced that a San Francisco federal jury has found Japheth Dillman, founder of cryptocurrency fund Block Bits Capital, guilty of wire fraud and conspiracy. Prosecutors alleged that between June 2017 and August 2018, Dillman raised nearly $1 million from over 20 investors, claiming the fund used its proprietary trading software "Autotrader" to trade cryptocurrencies and generate returns—though he knew the software was incomplete and non-operational. Dillman and an accomplice subsequently diverted the investment funds to personal expenses and high-risk crypto projects, and after those investments incurred substantial losses, he continued to falsely inform investors the fund had earned significant profits. Dillman is currently released on bail, with sentencing scheduled for December 8; he faces up to 20 years in prison and a $250,000 fine on each count.