Summer Break Over, Markets Gain New Momentum

Stock Markets Rally Again – Macro Drivers Strengthen

U.S. stock markets reversed last week's decline and rallied, with Nasdaq in particular hitting a new all-time high. Several major Wall Street banks still anticipate a correction, but we continue to see the uptrend holding strong. Key drivers include:

• Rising global liquidity
• Continued rate cutting cycle
• Delayed impact of a weakening dollar
• U.S. fiscal dominance and growing deficits
• "Treasury QE" – artificially supporting long-term rates
• Fading tariff and geopolitical fears

These trends appear to be accelerating especially in crypto markets, as a weakening dollar provides additional tailwinds.

Rate Cuts Continue – Central Banks Accept Inflation

The Bank of England cut its policy rate to 4%, even as inflation is expected to rise to a two-year high in September. Governor Bailey said rates are still on a downward path, but cuts must be measured and gradual. In practice, central banks appear to have accepted higher inflation levels to ease sovereign debt burdens.

In the U.S., the ISM services index barely stayed in expansion territory in July, while prices rose sharply. This raised stagflation fears, but Fed officials' comments on potential September rate cuts restored risk appetite. Markets now price in a 90% probability of a September cut.

Trump's nomination of Stephen Miran to the Fed board reinforces market expectations of easier monetary policy.

Fiat System Flexes – Store of Value Assets Win

Central banks' balancing act between inflation and slowing growth means that growth and employment are prioritized. As a result, fiat currencies continue to weaken, and investors seek safety in hard assets like gold and Bitcoin.

Trump's announced 39% tariffs on Swiss gold bars pushed gold futures to new intraday highs. Speculation about U.S. gold revaluation and building a Bitcoin reserve has emerged, though unconfirmed. Still, this highlights Bitcoin's advantage as a digital, borderless store of value.

Crypto Markets Wake Up – ETF Flows Return

After end-of-month rebalancing, Bitcoin and Ethereum ETFs are seeing capital inflows again. Bitcoin's consolidation phase appears to be over.

Ethereum is particularly well-positioned, as its positioning remains low relative to growing demand. The adoption of ETH treasuries supports this trend. Breaking above $4,000 suggests a new rally toward 2021 highs has begun.

• Standard Chartered: ETH treasury stocks offer better returns than ETH ETFs. The stocks increase ETH holdings and provide access to staking yields.
• Ripple: Announced the acquisition of Rail, a platform specializing in stablecoin payments, for $200 million. The company handles 10% of all stablecoin-based payment transactions globally.
• Satsuma Technology: Raised $217.6 million in a bond round. Part of the funds will be allocated to a Bitcoin reserve in Singapore.

• Marex and JPMorgan: Used JPMorgan's Kinexys blockchain platform for the first time to settle client payments. This reduces settlement risk and enables near-real-time transfers in a closed system.
• Standard Chartered and Animoca Brands: Establishing Anchorpoint, a joint venture in Hong Kong, to obtain a stablecoin issuance license.

• 401(k) retirement accounts: The President's new executive order allows 401(k) investments in crypto. Potential capital flows could reach billions of dollars.
• SEC and ETH staking: Approved liquid ETH staking products, pushing Ether above $4,000. This could accelerate institutional adoption.
• JPMorgan outlook: Sees room for upside in both equities and crypto as inflation stabilizes and liquidity remains high.
• MetaMask and Stripe: Developing a new stablecoin that integrates directly with the MetaMask wallet. This could solve Web3 usability bottlenecks.
• Ripple vs SEC: Won the long legal battle against the SEC. XRP sales on secondary markets did not violate securities laws.
• Altcoin warning: Analysts warn that altcoin rallies may be short-lived without macro support and growing liquidity.