Fed pivot confirmed, ETH hits $4,888 ATH, BTC rebounds to 117,500, and crypto lending surges to a record $61.7B

Executive Takeaways

• Fed pivot confirmed: Powell’s Jackson Hole speech signaled the start of easing in September.
• Market odds: ~85% probability of a September cut.
• ETF dynamics: BTC ETFs lost –$1.18B, while ETH ETFs flipped to inflows late week, pushing ETH to a new all-time high of $4,888.
• Options: Defensive hedging (put-call ratio 1.33), but vol eased post-Powell.
• Price action: Bitcoin spent most of the week pinned near lows before rebounding sharply to 117,500 on Friday as Powell spoke; ETH broke higher to fresh records; altcoins joined the rally.
• Structural shift: Crypto lending hit $61.7B, led by DATCOs.

Fed Watch: July Minutes → September Outlook

The minutes from the Federal Open Market Committee’s July 29–30 meeting set the stage for the week. Rates were held steady at 4.25–4.50%, but the discussion revealed a committee still focused on inflation risks, particularly from tariffs. Most members viewed price stability as the greater challenge, but two officials — Michelle Bowman and Christopher Waller — dissented, preferring a 25bps cut. Their case was anchored in weak labor market data, with July payrolls adding just 73,000 jobs, far below expectations.

Markets, however, looked past the hawkish majority. The CME FedWatch tool showed investors pricing in roughly an 85% chance of a September rate cut, with some strategists — JPMorgan among them — projecting as many as four consecutive cuts stretching into 2026.

The real catalyst came at Jackson Hole. Powell emphasized the “shifting balance of risks” between inflation and employment, effectively opening the door to easing. His words struck a dovish chord and marked a turning point in market sentiment.

Bottom line: The easing cycle begins in September. The debate now is not if cuts will start, but whether the first move will be –25bps or –50bps.

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Market Story: Bracing for Powell → Risk-On Rally

For most of the week, crypto traded heavy. ETF outflows weighed on sentiment, options positioning turned defensive, and Bitcoin hovered near its lows. Ethereum held in consolidation, unable to build momentum. Traders braced for Powell to reaffirm inflation vigilance, which would have kept risk assets capped.

On Friday, the mood flipped. As Powell acknowledged that labor-market risks warranted equal attention alongside inflation, he signaled that rate cuts were on the table. Risk assets re-priced instantly. Equities surged, Treasuries rallied, and the dollar softened. Bitcoin, which had been pinned at the bottom of its weekly range, ripped higher and touched 117,500 right as Powell was speaking. Ethereum went even further, breaking decisively through resistance to close the week at a new all-time high of $4,888. Altcoins joined the rally, confirming that Powell’s dovish tone unleashed a broad re-risking across digital assets.

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ETF Watch: BTC Weakness, ETH Strength

Bitcoin ETFs told the risk-off story of the week. Spot products shed nearly $1.18 billion, the fourth straight week of redemptions. Tuesday’s outflow alone was more than half a billion dollars, underscoring investor caution before Powell. Those persistent redemptions kept Bitcoin pinned at the low end of its range until Friday’s reversal.

Ethereum ETFs, however, flipped the script. After logging early-week redemptions of about –$866 million, flows turned sharply positive late in the week, with inflows of +$288 million on Thursday and +$338 million on Friday. That demand surge aligned with ETH’s breakout to $4,888, showing how ETFs are becoming not just a reflection of flows but a driver of price momentum.

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Crypto Lens: Derivatives & Positioning

Options markets captured the pendulum swing from fear to relief. Heading into Powell’s remarks, the put-call ratio on Bitcoin options spiked to 1.33, with heavy open interest at the $110,000 strike. Traders had positioned for downside protection, wary that Powell might lean hawkish.

Instead, implied volatility collapsed after the dovish turn. Ethereum, in particular, saw skew reset as liquidity returned and confidence rose with the breakout. The message from derivatives was clear: markets entered hedged and defensive but exited cautiously optimistic.

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Altcoin Watch: Rotation Beyond the Majors

Altcoins also caught the Friday rally, though their trajectories varied. Solana rebounded to finish the week near 212, continuing to benefit from treasury accumulation narratives. XRP was steadier, holding support at 2.75 and closing just above 3.00. Sui , meanwhile, continued to attract attention as a treasury play. Earlier this month, Mill City Ventures closed its $450 million private placement (July 31) and disclosed an additional open-market purchase of ~5.6M SUI on August 11, bringing its total holdings to nearly 82M tokens. While not new this week, those corporate allocations helped underpin sentiment and kept SUI constructive through the August 18–25 window, with the token holding its higher range between 3.30 and 3.80.

These moves highlight the structural shift underway: where Bitcoin pioneered the role of a corporate reserve asset, projects like Solana and Sui are now being positioned in treasuries as strategic holdings, reinforcing ecosystem alignment and adding to institutional credibility.

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DATCOs & The Corporate Treasury Boom

Beyond day-to-day price action, the bigger story was the continuing rise of Digital Asset Treasury Companies (DATCOs). Total crypto lending - spanning CeFi, DeFi, DATCOs, and ETFs — surged to $61.7 billion, breaking past the previous 2021 record.

Of this, $17.8 billion came from centralized lenders, $26.5 billion from DeFi protocols (much of it inflated by looping strategies), and at least $16 billion tied directly to DATCOs and ETF-related leverage. Unlike retail users looping stETH or traders recycling collateral on Aave, DATCOs accumulate assets by raising debt — convertible bonds, corporate notes, PIPE financing — and funneling that borrowed capital into Bitcoin and Ethereum treasuries. Functionally, this places them squarely within the lending/credit landscape: instead of lending out their crypto, they borrow in fiat terms to inject fresh capital into crypto markets.

This distinction is key. DATCO activity gets grouped alongside lending because each issuance of debt or equity-at-a-premium creates a leveraged bid for digital assets, similar to how a DeFi user borrows against collateral to go long. In effect, DATCOs have turned corporate balance sheets into giant leverage engines for BTC and ETH accumulation.

Collectively, these firms now control about 791,000 BTC and more than 1.3 million ETH. Strategy (formerly MicroStrategy) is still the giant with over 600,000 BTC, but challengers like Metaplanet and SharpLink Gaming are emerging with more diversified approaches — including ETH, SOL, and other altcoins.

The model is highly reflexive: as long as company shares trade at a premium to NAV, the cycle of raising, buying, and accreting continues. But if premiums collapse or debt maturities loom — $3.65 billion comes due in 2028 — the loop could unwind quickly. ETFs add another layer, since shares can be margined or lent against, creating synthetic leverage on BTC/ETH exposure.

For now, however, the flow of corporate balance-sheet demand remains one of the strongest structural supports for the market, and the surge in DATCO debt issuance underscores why the crypto lending landscape has become larger and more complex than ever.

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The Fed’s Mandate Tilt

Powell reframed the Fed’s dual mandate in a way markets couldn’t ignore. By placing labor-market weakness alongside inflation as an equal concern, he effectively validated rate cuts as the next step. For allocators, that shift provides confidence to re-risk portfolios.

Crypto stands to benefit disproportionately. Ethereum’s breakout was powered by ETF inflows and staking demand; Bitcoin remains the anchor reserve; altcoins like Solana and Sui are gaining traction via treasury adoption. The volatility reset after Powell shows that markets see the pivot as credible.

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Scenario Map (2–4 Weeks)

• Base Case (60%) — Gradual easing cycle begins: We assume the Fed delivers a September cut. In this case, BTC would likely continue consolidating in the 112–124k range, while ETH sustains its position above the recent all-time high.
• Upside Case (25%) — Accelerated soft-landing narrative: If upcoming jobs and inflation data come in weaker than expected, markets may build expectations for a faster easing path. ETH momentum could strengthen further, with secondary assets like SOL and SUI extending gains.
• Risk Case (15%) — Tariff stickiness and inflation pressure: Should tariff-driven inflation prove persistent, markets may re-price the pace of cuts. Under that backdrop, BTC could test 105–110k, ETH may drift back toward prior support, and altcoin momentum would likely stall.

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Strategic View

By the end of the week, crypto markets looked more constructive. BTC recovered to 117,500 on Powell’s remarks, while ETH’s move to $4,888 underscored its leadership role. Solana and Sui also benefitted from the ongoing treasury adoption narrative.

Volatility eased after Powell, reflecting greater confidence. ETF inflows into ETH, the continued rise of corporate treasuries (DATCOs), and record lending activity all suggest that structural demand is becoming a larger part of the market backdrop.

Heading into September, our working assumption is that conditions remain supportive. ETH holds the leadership position, BTC is consolidating in a healthy range, and altcoins are gradually building credibility through treasury adoption and ecosystem alignment.

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Closing Note

The week’s developments underscored a turning point: the Fed has opened the door to easing, and crypto markets are responding with renewed conviction. The combination of Powell’s dovish tone, Ethereum’s leadership, Bitcoin’s recovery, and the rise of DATCOs points to a market entering its next phase with structural tailwinds intact. The coming weeks will test whether this momentum can sustain — but for now, conditions remain constructive.

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Macro Data Recap

Key Speeches:

• Aug 19: President Trump spoke on economic policy.
• Aug 20: ECB President Lagarde; FOMC’s Waller; and release of FOMC minutes (July 29–30 meeting).

Eurozone PMIs (Aug 21):

• Eurozone Manufacturing: 50.5 (forecast 49.5; prior 49.8)
• Eurozone Services: 50.7 (forecast 50.8; prior 51.0)

U.S. Data (Aug 21):

• Weekly Jobless Claims: 235k (forecast 226k; prior 224k)
• Philly Fed Manufacturing Index: –0.3 (forecast 6.8; prior 15.9)
• Flash Manufacturing PMI: 53.3 (forecast 49.7; prior 49.8)
• Flash Services PMI: 55.4 (forecast 54.2; prior 55.7)
• Existing Home Sales: 4.01M (forecast 3.92M; prior 3.93M)
• Jackson Hole Symposium began — Powell’s dovish remarks set the stage for Friday’s rally.

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What We’re Watching Next Week (Aug 25–29)

Mon Aug 25

• U.S. New Home Sales (635k, up from 627k)

Tue Aug 26

• U.S. Core Durable Goods Orders (forecast +0.3%)
• U.S. Durable Goods Orders (prior –9.4%, expected rebound –3.8%)
• U.S. Consumer Confidence (96.3 vs 97.2 prior)
• Richmond Fed Manufacturing Index (–17 vs –20 prior)

Thu Aug 28

• Prelim GDP q/q (forecast +3.1%, prior 3.0%)
• Weekly Jobless Claims (forecast 231k, prior 235k)
• Prelim GDP Price Index (forecast 2.0%)
• Pending Home Sales (forecast –0.3%)

Fri Aug 29

• Fed’s Waller speaks (2am)
• Tokyo Core CPI y/y (forecast 2.6% vs 2.9% prior)
• German Preliminary CPI m/m (forecast flat, prior +0.3%)
• Spanish Flash CPI y/y (forecast 2.8%)
• Core PCE Price Index m/m (forecast +0.3%, key Fed inflation gauge)
• Revised University of Michigan Consumer Sentiment (58.6 expected)

Why it matters:

• U.S. GDP and PCE inflation (Thu/Fri) are the most critical releases ahead of September’s FOMC, shaping expectations between a –25bps vs –50bps cut.
• Jobless claims remain in focus after last week’s jump to 235k.
• European CPI prints (Germany, Spain) will test the ECB’s “done hiking” stance.
• Fed communication (Waller) could fine-tune how markets price the September decision.