Market Mood: Risk Off
Bitcoin and stocks both sold off after a morning inflation report. That report pushed the odds of a rate hike from about 60% up to about 74%, which is bad for risk assets. Bitcoin trades around 77K. Ethereum sits just over 2,400.
Fund Flows
This month has brought healthy inflows: about $700 million into Bitcoin products and about $150 million into Ethereum products. But the pattern flipped yesterday. Bitcoin products saw about $120 million in outflows while Ethereum products took in about $35 million. That reverses the usual pattern, since flows normally favor Bitcoin. This could signal growing institutional interest in the newly released staked Ethereum products - worth watching.
The Clarity Act
The Genius Act set up the federal framework for crypto. Now the market waits on the Clarity Act, revived for a procedural vote on September 15th. Passage is not priced into crypto. Even earlier, when the odds of passing sat around 40-50%, it still was not priced in. The bill needs 60 votes, so some Democrats must be pulled over. There are disputes over text covering conflicts of interest and President Trump. It could still pass - lawmakers who pour work into bipartisan bills like to see a result.
Hyperliquid, Kraken, and NASDAQ
Hyperliquid has surged over the past weeks. It drew attention after President Trump mentioned it at a crypto summit. Hyperliquid may reach a deal with Kraken's child company to bring its perpetual futures product to the US, which could be huge. NASDAQ is investing $100 million in Kraken's parent, strengthening an existing relationship. The goal is to build market infrastructure so capital moves quickly and efficiently in an always-on market for these products.
Stablecoins and Tokenization
The passed act set the stage for stablecoins. New rules requiring stablecoins to be backed by government treasuries bring a whole new asset class into crypto activity. Expect much more tokenization of different products. When it goes fully mainstream is still an open question.
Technical Outlook
September is usually a tough month for both stocks and Bitcoin. Bitcoin hit its golden cross, meaning its 50-day moving average crossed above its 200-day moving average - a strong signal. When this has happened, the average one-month return was 9% and the average forward three-month return was almost 30%. It has occurred only eight times in Bitcoin's history. Given that, Bitcoin could move higher from here. One view held that Bitcoin could reach 90,000 in October if September closes positive.
