Crypto roars back to life

•   ●  BTC hits $79k
  
•   ●  Gold taps $4,600
  
•   ●  Huge macro week ahead

Crypto roars back to life

The stars aligned perfectly for the entire crypto industry last week. On the one hand was the triple-whammy of the SEC, the White House and the CFTC all pushing for the immediate adoption of new rules pertaining to digital assets; on the other hand, the latest intervention by the US Treasury revealed that bond markets are beginning to lose faith in long-term debt instruments, raising fears of the so-called debasement trade.

The SEC’s new proposed rule book, published last Tuesday, bypasses many of the core components of the delayed Clarity Act, and would potentially serve as an effective stopgap while the US legislative branch gets its act together. The proposal, which will remain open to public comment over the next couple of months, would distance many of the major crypto projects from the definition of an investment contract, thereby making such digital assets more palatable to institutional firms. Subsequent meetings at the White House and at the CFTC reinforced the message that the US government is willing to move swiftly on the matter should Congress continue to stall.

As for the Treasury intervention, it seems that bond markets were not interested with the planned expansion of the long-term treasury buyback programme. By Friday, bond yields had largely recovered to the same levels on offer before Scott Bessent’s announcement, suggesting that markets are worried about the US government’s ability, or indeed willingness, to reign in the record-high deficit. The lack of faith in traditional debt instruments has forced markets to reallocate into more scarce investment vehicles, hence the recent surge in precious metals and cryptocurrencies alike.

Bitcoin jumped 24% over the course of last week – something that it has not done for a number of years. Such euphoric performances are not exactly bear market moves, and indeed last week’s price action has completely shattered the bearish narratives that have steered sentiment over the last 10 months. Technical levels have been torn through, moving averages have been left in the dust, downtrends have been invalidated and long-term predictions are being strenuously tested. An estimated $1.6 billion poured into spot Bitcoin ETFs last week, while $4 billion in short positions were erased across all cryptocurrencies in one of the biggest liquidation events of the last five years. With the leverage now cleared out, the question now turns to whether crypto can maintain the momentum into this week and beyond. The moves in precious metals were nothing to be sneezed at either, with gold gaining 5% by Friday to reach $4,600 per ounce, and silver adding over $4 to its tally to close just under $69 per ounce.

Huge macro week ahead

Several events are scheduled to light up the economic calendar this week, starting on Wednesday with the PCE price index. The latest inflation reading will factor straight into the Federal Reserve’s next interest rate decision on the 16th of September, which is currently a toss up as to which way the board will swing. While recent data has been somewhat encouraging, and with many officials speaking less urgently of the inflationary pressures caused by tariffs or higher crude oil prices, official figures are far from the Fed’s 2% target. Headline inflation is expected to stay at 3.7% in July, while the core element is likewise predicted to remain unmoved at 3.3%. Interestingly, after this month’s report, the Bureau of Economic Analysis will change its methodology in a way that will likely diminish the impact of “computer software and accessories” prices, which have soared in recent months due to the explosion of the AI sector. Wednesday will also see the publication of the preliminary estimate for US Q2 GDP growth, which is forecast to increase to 1.6%, beating the advance estimate which showed just 1.5%. During the same day, durable goods and personal spending complete the economic picture, while Nvidia (NVDA) is set to publish its latest earnings report after the closing bell.

During the latter half of the week, attentions will turn to the Jackson Hole Symposium in Wyoming. While the main theme of the gathering centres around financial innovation and payment infrastructure, Fed Chairman Kevin Warsh will deliver a speech on Friday that will directly address the central bank’s policy path going into the September meeting. Friday may also provide some late week entertainment in the form of the annual revision to non-farm payroll data. Last year, the revision stripped 911,000 jobs from the 12-month period ending March 2025, destroying the job creation narrative that had prevailed up until that point. This year, economists are predicting something of the opposite, with Commerzbank in particular expecting a revision of 250,000 jobs to the upside.

#BTC #CRYPTO #HODL

About the Author

Lawrence J. came from a strong technical and engineering background before pivoting into a more financial role later on in his career. Always interested in international finance, Lawrence is experienced in both traditional markets as well as the emerging crypto markets. He now serves as the financial writer for RADEX MARKETS.

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