Blockchains show their feels like a sensitive teen at their first high school dance, and that was very much in evidence during Tuesday night's presidential debate.

Zoom in: The crypto world is praying it will get a break from Washington coming out of this year's national election.

• And most of it wants a win by former President Trump because he's made his support very clear.

Driving the news: One could see those hopes getting dashed in real time, however, almost as soon as the debate began, by looking at various on-chain assets.

• On Polygon, the prediction market Polymarket suddenly lost faith in crypto's champion, as Vice President Kamala Harris started confidently — and only became more so as she baited Trump into losing his cool.
• Bitcoin price started falling immediately, as well.

Meanwhile, it's been a blood bath in the many Trump meme coins out there. Newsletter notables like MAGA and TREMP plunged by double-digits, where they remain.

• Plus, not only did crypto advocates urge debate moderators to turn the conversation to cryptocurrency, bettors were putting money down on whether or not either candidate would speak of the topic.
• Those who bet they would are collectively out about $700,000.

The big picture: Anyone who doubts that this election is seen as crucial to the nascent cryptocurrency industry need only look at the $169 million its scions have posted to establish a foothold in Congress.

• And the price of bitcoin, in particular, has been seen as a proxy reading for how good traders feel about getting a positive outcome in November.
• "The industry anticipates more favorable treatment from one party," chief legal officer Jason Allegrante of the treasury management company Fireblocks, said in a statement. "It recognizes where the fault lines lie for the moment."

Between the lines: While much that was lost has been regained since the morning after the face-off, even some of those previously skeptical of the link between election odds and bitcoin price are changing their tune.

• One researcher, David Lawant at blockchain prime brokerage firm FalconX, had poured cold water last month on the idea that bitcoin's price is primarily a bet on the election.
• He had put the two metrics we've looked at here together (Polymarket bets and bitcoin price) to see if they moved as one through the end of July. They didn't.
• Bitcoin has a lot on its mind.

The latest: "It was probably too early in the election cycle" when he ran that analysis before, Lawant tells Axios in a post-debate follow-up call yesterday.

• He re-ran his analysis over recent days and it looks different. "We have this inkling that the market is starting to react to these things in a stronger and clearer way than it was before," he said.

The bottom line: "It's possible that the election will become a much stronger driver of prices."

Chainalysis has been publishing its global cryptocurrency adoption index for five years now, with the most recent installment dropping yesterday.

What jumps out is that the five highest-ranked countries have changed quite a bit from year to year.

By the numbers: India has been No. 1 for the last two years (despite being very harsh on the industry), but it didn't even make the top 10 in 2020.

• Vietnam was No. 1 the two years before India took the lead, but now it's fifth, behind the U.S.
• (Yet research by Kyros Ventures shows people in Vietnam and neighboring countries to be avid users of all sorts of crypto products.)
• One of the biggest movers this year was Indonesia, which jumped from seventh place to third. Chainalysis said the country has received $157 billion in cryptocurrency.

The intrigue: While the list has changed over the last five years, so has the methodology, as the company refined the ways it looked at the question and new activities became popular online.

The big picture: From its inception, cryptocurrency has attempted to evade easy surveillance. And even the market leaders in crypto surveillance have struggled to define the best way to compare blockchain activity from country to country.

• So looking across the company's five successive efforts to quantify and compare the on-chain activity of the citizenry in different nations is also something of a recent history of the industry in and of itself.

The biggest change: decentralized finance (DeFi). In the first report, DeFi is not one of the metrics, even though that was DeFi's breakout year.

• In 2022, DeFi became a key part of the metrics. Chainalysis also had to calibrate for the ways that DeFi tends to become a bit of a turducken of investments within investments.
• Also, lately, it has struck a balance between professional volume and that of normal people by attempting to distinguish between them in separate metrics.

The latest: Chainalysis has already seen levels of activity in 2024 higher than the highest highs in the last boom.

• If that feels wrong to you, that's because activity in high-income countries did drop off. It's just that it increased in the rest of the world, Chainalysis shows.

Worth your time: The 2020, 2021, 2022 and 2023 summaries.

🧞‍♂️ Prometheum — the contrarian crypto exchange — is finally offering a service: custody. (CoinDesk)

🙋 tZero says, ME TOO! on Prometheum's offering, with fresh license. (Blockworks)

🪆 Russia's digital ruble is coming next year. (CoinDesk)

This week Tether, the company behind the massive stablecoin, announced a crime-fighting partnership called the T3 Financial Crime Unit, aimed at spotting illicit use of its coin and freezing funds fast.

Between the lines: The timing might have something to do with a thorough report on the company published by the Wall Street Journal on Tuesday.

Russian oligarchs and weapons dealers shuttle tether abroad to buy property and pay suppliers for sanctioned goods. ... Yet in dysfunctional economies such as Argentina and Turkey, beset by hyperinflation and a shortage of hard currency, tether is also a lifeline for people.

Why it matters: Much is made of the use of tether (and cryptocurrency in general) for crime, but criminals are just like the rest of us — they use useful things.

• Roads, cell phones, duct tape: all great for regular life and crime, too.

Details: The report is worth a full read. They found some compelling anecdotes from tether's use around the world.

• A Russian fixer taking in rubles and turning them into tether, now in French custody.
• CityPay.io, the tether-based system that has rolled out all over the Georgian capital of Tbilisi.
• The hijinks that ensued after Venezuela's state-backed oil firm, PdVSA, evaded sanctions by demanding payments in tether.

The bottom line: Tether's market cap is $118 billion, and the company made more profit than BlackRock last year.

DeFi Education Fund attorney Amanda Tuminelli brought Smart Brevity vibes to a congressional hearing on decentralized finance this week.

What they're saying: "First, DeFi is different from and an improvement upon traditional finance, because it does not rely on intermediaries," Tuminelli told the subcommittee on digital assets on Tuesday

• "Second, the existing approach of demanding that DeFi look like, function like or be treated like traditional finance has not and will not work."

💭 Our thought bubble: You can disagree with what she has to say, but you can't say she doesn't make her case with clarity.

• Watch the hearing.