Crypto Daily | ETH Briefly Tops $4.9K; Rising Fed Rate Cut Chatter May Be Risky for Crypto, Santiment Warns

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Ethereum Sets Fresh High, Edges Toward $5,000 After Powell’s Dovish Jackson Hole Speech

Ethereum climbed to a new record over the weekend, edging closer to the $5,000 mark, after Federal Reserve Chair Jerome Powell signaled rate cuts that fueled a broad rally in risk assets.

The second-largest cryptocurrency hit $4,954.81 on Sunday, marking its first all-time high since 2021. By Monday, it was trading slightly lower at $4,776.46, still up nearly 15% from Friday’s levels.

The surge came as crypto markets cheered Powell’s remarks at Jackson Hole, where he hinted that interest rates could soon be lowered. The prospect of looser policy lifted equities and digital assets alike, with Bitcoin rising 4% on Friday and Ether leading the rally.

Rising Fed Rate Cut Chatter May Be Risky for Crypto, Santiment Warns

The optimism surrounding the potential Federal Reserve (FED) rate cut and its anticipated ability to spark a massive crypto rally has dominated market sentiment recently.

However, crypto intelligence platform Santiment has cautioned that this “buy the rumor, sell the news” mentality could present significant risks for investors.

Historical patterns show that such dramatic increases in conversation around a single bullish theme often suggest euphoria levels are becoming excessive and could indicate a local market top.

Bitcoin-Volatility Collapse Forces Risk-Loving Traders Elsewhere

Bitcoin, once the unruly child of finance, is showing signs of maturity as its wild swings fade, forcing speculative traders to hunt for a new playground.

The world’s biggest cryptocurrency is behaving more like a blue-chip stock as Wall Street’s buy-and-hold investors plunge in. Annualized volatility has dropped to a once-unthinkable 38% from close to 200% more than a decade ago. It is now comparable to the likes of Starbucks Corp. or Goldman Sachs Group Inc., according to Bytetree Asset Management.

Investors chasing price swings are instead turning to rival Ethereum, the second-largest virtual currency. On several trading days this month, Ether exchange-traded fund volumes have matched or surpassed their Bitcoin counterparts on the heels of a corporate-buying frenzy.

Metaplanet Pushes Bitcoin Holdings Higher With Fresh $11.8M Buy, Now Holds Near 19K BTC

Metaplanet has once again expanded its Bitcoin reserves, acquiring 103 tokens for 1.736b yen, or about $11.8m, as part of its ongoing treasury strategy.

The Tokyo-listed company now holds 18,991 Bitcoin in total, purchased at an average price of 15.05m yen per coin. In dollar terms, its stash is valued at more than $2.14b at current exchange rates.

The move comes just a week after Metaplanet added 775 Bitcoin to its balance sheet, showing its rapid accumulation pace.

Coinbase Foresees 300% Surge in Stablecoin Market Cap to $1.2 Trillion by 2028

US-based cryptocurrency exchange Coinbase anticipates a significant surge in the stablecoin market cap, which could touch $1.2 trillion by 2028, a 300% rise from the current level.

The forecast is based on a model that considers factors such as the volume of US Treasuries issued, as stablecoins are typically backed by US dollars or Treasuries.

As per Coinbase’s report, this growth doesn’t necessitate large or permanent rate dislocations, but rather hinges on incremental, policy-enabled adoption compounding over time.

Bitcoin & Ethereum Spot ETF Flow

The overall net outflow of the US Bitcoin spot ETF on Friday was $23.15 million. The total net asset value of Bitcoin spot ETFs is $150.23 billion.

The Bitcoin spot ETF with the highest net inflow on August 22 was Grayscale Bitcoin Mini Trust ETF, with a net inflow of $65.74 million.

Source: SoSoValue

The overall net inflow of the US Ethereum spot ETF on Friday was $341.16 million. The total net asset value of Ethereum spot ETFs is $12.43 billion.

The Ethereum spot ETF with the highest net inflow on August 22 was Fidelity Ethereum Fund, with a net inflow of $117.90 million.