The second quarter was about $30 billion larger than the previous record decline, not two years earlier at the onset of the COVID-19 pandemic. Reuters reports on this one. In other news, a fresh report out says U.S. firms that do most of their business at home will fare better than those exposed to Europe, where a recession is all but guaranteed. That's according to strategists at Goldman Sachs. Quote, despite concerns that investors have about U.S. equity markets, we believe it offers greater absolute and risk adjusted return potential than recession plagued European markets, they wrote in a note. Bloomberg reports on that one. Meanwhile, the Federal Reserve's attempt to get a clean read on post pandemic inflation has focused attention on gauges that elevate housing costs, which is why what happens to rental inflation will factor heavily into the future of monetary policy. The good news is that rental inflation may be close to topping out after advancing almost 6% in just the 12 months through July. The bad news is that it will take a while to go back down. And that means that fed officials will maintain higher interest rates for some time, if you're the fed and you're trying to push down on inflation, you have to sort of hammer the labor market a little bit. In the sense that that's what's going to help push shelter inflation down. The president of inflation insights in Pasadena, California said. Most other prices, meanwhile, are quote out of their control. It's another one from Bloomberg. Turning to international news, the Conservative Party of Canada or the CPC elected a pro Bitcoin Ontario member of parliament. Pierre poi liev. As the party's new leader on Saturday, and it wasn't even close. Quickly have garnered over 68% of the conservative vote. Miles ahead of his closest rival, who only managed to scrounge up about 16% of the total vote. Poorly have not only dominated in vote count, but also as the preferred candidate in almost every single electoral district across Canada, quote, government is ruining the Canadian dollar, so Canadians should have the freedom to use other money, such as Bitcoin. Willie has said earlier this year. Coin desk Frederick reports. Turning to industry news, the Biden administration's new findings on Bitcoin mining's environmental impact, united some industry advocates and some of its critics, both sides declaring their views had support from the highest levels of the U.S. government. On Thursday, The White House office of science and technology policy released a much anticipated 45 page report on Bitcoin mining and detailed the pros and cons of the industry's impact on the environmental and energy grid, calling for more research so that federal agencies can come up with standards to minimize harm. Oh joy. If these measures prove inefficient the report set, the administration and Congress should consider limiting or eliminating energy intensive technologies like proof of work. The system that powers the Bitcoin blockchain and at least for a few more days, Ethereum. Bitcoin mining in particular is based on criticism for its energy usage and carbon emissions. But the industry is argued that it can actually support the world's transition to renewables. Advocates say the report highlights the positive potential of Bitcoin mining, whereas critics note that the government agency tried to debunk some of the miners arguments, quote every major Bitcoin influencer going on national TV should be hammering the point that The White House report found that proof of work mining could yield positive results for climate change, tweeted one attorney. Coin desks Eliza Gritty has more. And finally, the notable reduction in energy consumption after the merge may allow some institutional investors to purchase ether for the first time. Those were barred from buying tokens that run on blockchains using proof of work consensus mechanisms. New report out from Bank of America says, quote, the ability to stake eth and generate a higher quality yield lower credit and liquidity risk is a validator or through the staking service rather than on black box lending and borrowing applications, may also drive institutional adoption, analysts wrote. The big bank says that higher quality yield also has ramifications for the web three ecosystem of decentralized applications. A decentralized insurance protocol such as nexus mutual needs to generate a return on its reserves to allow for it to become a feasible alternative to traditional insurance companies, the bank said. Insurance companies normally invest their reserves in corporate or government debt, but instruments with similar risk and reward characteristics are difficult to find in the digital asset ecosystem. Staking on Ethereum may in fact be the closest alternative. It added. Coin desks will canny, has more. And in crypto culture news, here's Adrian blast. Thank you, Adam, what's up, everybody? Starbucks, the popular coffee roaster is set to begin a non fungible token or NFT based loyalty program with the blockchain technology provided by polygon. The company's Starbucks Odyssey will allow customers to purchase and earn digital collectibles in the form of an NFT that offer benefits and immersive experiences. The program is to be built on polygon's proof of stake network, a scaling tool that sits on top of the Ethereum network, applications that run on polygon and other scalars can avoid some of the high costs and low transaction speeds caused by congestion on Ethereum's main network. Starbucks hinted at developing a web three experience in May when it announced plans to launch a series of NFT collections providing quote unique experiences, community building, and customer engagement. Jamie Crowley reports on that. Thanks very much for that Adrian. Today's featured stories and opinion piece from coin desks, David zamora. Today's feature is entitled, then they fight you. Scenarios for coming crypto regulation. I can't count how many times over the years I've seen someone on a crypto Twitter trot out the old saw that starts with first they ignore you, then they laugh at you. Well, be careful what you wish for, because over the past year, we've clearly reached the then they fight you portion of the quote, often misattributed to Mahatma Gandhi. For more than a decade, regulators including the U.S. Securities and Exchange Commission have been imposing only minimal restraint and targeting egregious frauds for prosecution. But otherwise leaving crypto largely to its own devices. But when Gary gensler was appointed to have the SEC under the Biden administration, he signaled early and often his intention to take a more rigorous approach. That attitude is manifested in a variety of ways, even beyond gensler's formal domain. In May, the SEC doubled the number of staffers in its enforcement division who were focused on crypto. Sanctions against the privacy software known as tornado cache by the office of foreign assets control has triggered the most acute worry in the industry, and will face legal challenges, and last week saw filings from grayscale investments acknowledging in response to an SEC inquiry that the steller zcash and horizon crypto tokens quote may currently be and quote securities. And full disclosure, grayscale and coin desk are both earned by digital currency group. Some of this increased scrutiny may be simply a consequence of crypto's growing influence and the stakes, rather than entirely due to gensler. According to the law blog, legal intelligencer, cryptocurrency enforcement actions by the SEC have shot up to 79 for the three years from 2018 to 2021 from just 18 between 2013 and 2017. But it also does no good to deny the obvious. Gensler came in ready to regulate, and he got a convenient mandate courtesy of the immense amount of truly damaging fraud and foolhardy experimentation in crypto. That was always present, but the increased exposure of the general public to crypto speculation during the 2020 through 2022 bull market made the situation far more dangerous than it had been. So there are two maybe three possible outcomes here. The most likely, unfortunately, is that gensler's SEC places mounting legal pressure on both token issuers and exchanges. Primarily using even more enforcement actions to treat tokens as securities and a relatively uniform way. That would almost certainly strangle many good crypto projects along with the bad. The preferable alternative would be a real attempt to structure rules that wouldn't hamper the potential of this new technology along the lines of the formal time limited safe harbor proposed by SEC commissioner Hester purse. That proposal includes data reporting requirements for token projects, which is good, but didn't place any prior restraint on entities that wanted to try something new, which is also good. Personally, I would love to see additional safe harbor permissions for tokens with very low value. The sort that might be deployed for small scale doubts or decentralized autonomous organizations or other truly community driven projects. But let's be realistic. Regulation that leaves substantial room for experimentation isn't particularly likely to come to fruition. In part, that's because Congress remains a bit of an ineffectual mess. Ill equipped to craft complex and rational, new rules. But more fundamentally, the SEC and other regulators just aren't set up to grapple with the truly mind bending complexities of blockchain's crossover between technology and finance. That disconnect may be inevitable because regulation implies a normative vision of the way that things should be. Embracing risk and chaos and figuring it out as we go is probably the only real way to find out the long-term potential of these innovations. With that possibility has basically closed over the past two years, thanks to a combination of real growth and shameless hox tourism. Figures like Alex mashinsky and du Quan conveniently disregarded the experimental nature of the products they were promoting to the general public, and that means that real engineers and designers tinkering at the truly bleeding edge are poised to pay a completely undeserved penalty. As these tighter constraints close in, it'll be increasingly important to remember what's actually being targeted by stricter regulation. Ultimately, the problem is not cryptocurrency, the blockchain itself, which are merely technologies. The problem is that they've been overhyped and exploited to further a much larger system, in which promotion of high risk investments yields big rewards, even if those investments are more likely to get vaporized. The same dynamic is in play in the regulated venture capital industry. We recently saw the absurdity of another 350 million, being handed to low rent P. T. Barnum, Adam Neumann, who became a billionaire in the course of destroying $11 billion of other people's money at WeWork, his Neumann, a smarter, better, or more trustworthy person than duquan, that seems like a stretch. Of course, there is a potential upside as the crackdown ramps up. It could return cryptocurrency to its roots. The fat days of loose oversight were moved incentives to build truly robust systems that could operate beyond government reach in favor of fragile systems with superficial features that could be shown to retail traders and investors. Features like censorship resistance and true decentralization are about to get a lot more important. And in the long run, that could be the best outcome of all. Hey, listeners, thank you for listening. On behalf of markets daily, you're invited to coin desk's new event. The investing in digital enterprises and asset summit or ideas for short. This event facilitates capital flow and market growth by connecting the digital economy with traditional finance. Join us on October 18th and 19th for a 360° investment experience where you can source invest and secure your next big deal in digital assets in one place. Use code markets 20 that's all one word and with the number 20 for 20% off a general pass. Register today at coin desk dot com slash ideas.