Markets Nervous, but Fundamentals Remain Strong

ETF Flows: Bitcoin Turns Negative, Ethereum Continues Strong Rally

Spot Bitcoin ETFs saw a total net outflow of $643 million last week (July 28–Aug 1), ending a seven-week inflow streak. Meanwhile, Ethereum spot ETFs attracted $154 million, marking the twelfth consecutive week of positive net flows. Of the nine ETFs, only ETHA ended in positive territory.

Ethena Becomes Third Largest Stablecoin

USDe supply has increased 75% in the past month and now exceeds $9.3 billion. Ethena is now the third-largest stablecoin and has also become the sixth-largest DeFi protocol by TVL.

France Drafts Law for Bitcoin Mining with Nuclear Power

Rassemblement National is drafting a law to use France's surplus nuclear power for Bitcoin mining. Marine Le Pen's shift in stance reflects a broader political wind in Europe regarding crypto.

Coinbase vs. UK Regulators

Brian Armstrong criticized the UK's crypto advertising bans as outdated and compared crypto demonization to financial industry failures. He argues that censorship only gives crypto more visibility.

George Osborne Calls for Rapid Action in Britain

Former Chancellor George Osborne warns that Britain is falling behind in the global crypto race and calls for reforms. He now serves as an advisor to Coinbase.

August Started Nervously

The strengthening U.S. dollar and weakening Japanese yen weighed on risk assets early in August. Bitcoin fell below $112,000, and altcoin movement was subdued. At the same time, the S&P 500 saw its weakest week since April.

Tariff Fears and Uncertainty Cast Shadows

Although the U.S. struck favorable trade deals with the EU and Japan and delayed China tariff decisions, uncertainty around the August 1 deadline weighed on sentiment. Trump uses tariffs as a negotiating tactic, but markets hate uncertainty.

Powell and Jobs Data Contradiction

The Fed held rates unchanged, and while two members voted for a cut, Powell's hawkish tone and PCE inflation holding at 2.8% suggested caution. Q2 GDP growth of 3% supported the wait-and-see approach. However, Friday's jobs report showed only 73,000 new positions, and prior month revisions took away 258,000 jobs – the worst revision since 1968 outside of recessions. This quickly brought September rate cut expectations back above 80%.

"Treasury QE" and Debt-Fueled Growth

The U.S. announced it needs $1.6 trillion in borrowing over the next six months. Of that, $1 trillion will be raised in Q3 alone. The strategy is to emphasize short-term debt, keeping long-term rate movements modest – essentially yield curve control outside the central bank.

This combination of fiscal and monetary policy keeps risk markets alive. The economy isn't collapsing but is slowing in a controlled manner. The Fed now has a reason to cut rates while GDP grows on deficits and stimulus packages.

The Dip Is Your Friend – Structural Drivers Remain Strong

Markets react short-term to macro data, but the fundamentals haven't changed:

• Global liquidity is growing
• Late-stage rate cutting cycle supports risk-taking
• Dollar weakness supports cryptocurrencies
• U.S. fiscal dominance continues
• "Treasury QE" keeps long rates low
• Tariff fears are fading

BTC and ETH may continue to move sideways, but ETF flows and corporate investments keep demand high. We still expect BTC to rise toward $150,000 and ETH to break $5,000 in the coming months.

Kraken Q2: Strong Growth, but Volatility Shows

Kraken reported $412 million in revenue and $186.8 billion in volume for Q2. The summer slowdown in crypto markets was visible, but the company significantly increased its stablecoin-based trading share.

JPMorgan and Coinbase Partner Up

JPMorgan is teaming up with Coinbase to allow 80 million customers to buy crypto directly from their bank accounts or with credit points. This is the first time a U.S. rewards points program has been connected to crypto.

• South Korea: Tourist destinations now have ATMs where foreigners can exchange stablecoins for cash.
• Bolivia and El Salvador: The countries are cooperating on crypto regulation and oversight development.
• Algeria: All crypto activity, including mining, is now criminalized under new law.
• Robinhood: Q2 profit of $386 million with crypto revenue growth of 98% year-over-year.