22nd July 2025 > > Charles Schwab & ETH.
- Mark Timmis
- Jul 22
- 3 min read
tl;dr
Charles Schwab is about to make good on its crypto desires. Ethereum makes a welcome recovery.
Market Snap
Market Wrap
Yesterday was a rare day indeed with net outflows of $131mm from the spot BTC ETFs, only the second time in the last twenty-nine trading days.
Curious Cryptos’ meme corner
Curious Cryptos’ Commentary – Charles Schwab
Charles Schwab, an early entrant into the online investing game in the late noughties, has never been shy of adopting new technological developments. The appointment of Rick Wurster as the new CEO of Charles Schwab last year started well with the immediate approval of the CCC:
Rick made plain at the time:
“We also would like to directly offer crypto”.
The hindrance to Rick’s plan to bring financial freedom to the masses was the lack of regulatory clarity deliberately engineered by those in charge of the SEC at the time, for reasons that will never be explained. Rick was clear about what needed to happen:
“Our expectation is that with the changing regulatory environment, we are hopeful and likely to be able to launch direct spot crypto. Our goal is to do that in the next 12 months, and we are on a great path to be able to do that.”
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And that is exactly what the company is about to do:
“Our clients want their crypto to sit alongside their stocks, bonds and cash – not off to the side on a different app … We anticipate launching Bitcoin and Ether (spot trading) sometime soon so that our clients have access to that. We think that will be an acceleration of our growth.”
With around $11 TRILLION of assets under custody for its clients, Charles Schwab is one of the giants of the financial services world. The asset managers that fail to get on board the crypto train will gently slide into irrelevance, without even realising it. And after that, we won’t even notice that they have faded away, leaving no more than a ghostly mark on our collective memories.
Curious Cryptos’ Commentary – Ethereum (ETH)
ETH has been on a tear of late, up 24% in the last week, and 61% over the last month.
The spot ETH ETFs have seen a sustained and material uptick in activity, likely driven by the impending approval by the SEC for including staking operations with the ETF, providing 3%-4% annual returns, though that number is misunderstood by most.
The returns from staking within the proof-of-stake consensus are generated by the creation of new coins. All other things being equal (which they never are) those new coins simply dilute current holders. The simple way to think about that is to consider them as minor stock-splits. The market cap remains the same, and so each coin is worth a little less when measured in fiat. In effect, by holding but not staking PoS coins, the investor is taking an annual hit equivalent to the headline rate of inflation in the number of coins in circulation. For now, that is what holders of ETH ETFs are experiencing. (*)
In the last week alone, the spot ETH ETFs have seen inflows of $2.2bn. That is a decent chunk of a $440bn asset. Those flows are growing daily it seems.
There has also been dramatic growth in the number of companies adding ETH to the balance sheet, some of which are companies created solely to buy and hold ETH. A great example was reported yesterday by Reuters. The Ether Reserve will merge with SPAC Dynamix Corporation with the intention of raising $1.6bn of cash from issuing equity to buy 400,000 ETH. The new company, titled The Ether Machine, will trade on the Nasdaq.
Andrew Keys, Chairman of the Ether Machine, feeds the common misunderstanding about PoS yields:
“Bitcoin doesn’t have yield and Ether does.”
Andrew is right about this though:
"The largest beneficiary of the Genius Act is Ethereum because the majority of stablecoins reside on top of Ethereum.”
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Ethereum has been vocally disparaged over the last year or so by many in the industry. I think that narrative has changed to the benefit of investors in ETH. And just for fun, for Technical Analysis is no more than snake oil, this is the type of commentary now common amongst techies:
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(*) If you apply the same analysis to interest income or dividend income in relation to real-world assets, it becomes immediately apparent that taxing those income streams is morally reprehensible, and should not be allowed in a modern liberal democracy. But I don’t think this, or any future government, is going to listen to that argument.
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