Five Things to Know in Crypto This Week: Fed Chair Powell and BTC Spot ETF Inflows

Fed Chair Powell Signals September Rate Cut

It was a crucial week for the global markets, with the Fed under the spotlight at the Jackson Hole Symposium.

On Friday, August 23, Fed Chair Powell indicated the time for policy adjustment had arrived. While Powell did not offer a timing for the rate cut, the markets expect a September move.

Powell’s indication of a potential Fed rate cut spurred buyer demand for riskier assets, signaling investor confidence in a more accommodating monetary policy. The Nasdaq Composite Index rallied 1.47% on Friday, closing the week up 1.40%.

More significantly, the total crypto market cap surged 5.28% on Friday. Monday, August 19, through Saturday, August 24, the crypto market cap increased by 8.69% to $2.203 trillion.

US BTC-spot ETF Market Responds to Powell’s Speech

Fed Chair Powell’s speech also boosted demand for US BTC-spot ETFs, crucial for maintaining a bullish supply-demand balance.

According to Farside Investors, the US BTC-spot ETF market recorded total net inflows of $252.0 million on Friday, marking the highest since July 22. Moreover, the spot ETF market extended its net inflow streak to seven sessions.

For the week ending August 23, notable flows included:

• Grayscale Bitcoin Trust (GBTC) saw net outflows of $86.8 million in the week ending August 23 (previous week: -$195.2 million).
• (BTCO) reported net outflows of $3.1 million
• iShares Bitcoin Trust (IBIT) had net inflows of $318.8 million.
• Fidelity Wise Origin Bitcoin Fund (FBTC) saw net inflows of $87.8 million.
• ARK 21Shares Bitcoin ETF (ARKB) had net inflows of $83.5 million.
• Grayscale Bitcoin Mini Trust (BTC) reported net inflows of $69.0 million.

Overall, nine of the eleven issuers recorded net inflows for the week ending August 23, reflecting positive sentiment toward Powell’s speech. US BTC-spot ETF market inflows contributed to BTC’s weekly gain.

Monday, August 19, through Saturday, August 24, BTC was up 9.31% to $63,938.

US ETH-spot ETF Market Sees Extended Outflow Streak

In contrast to the US BTC-spot ETF market, the US ETH-spot ETF market faced continued outflows.

According to Farside Investors, the US ETH-spot ETF market saw total net outflows of $44.5 million in the week ending August 23. Significantly, the ETH-spot ETF market extended its net outflow streak to seven sessions, contrasting with the BTC-spot ETF market’s inflow streak of seven sessions.

Since launch, the US ETH-spot ETF market saw total net outflows of $465.0 million. Outflows from the US ETH-spot ETF market left ETH underperforming compared with BTC.

From Monday, August 19, to Saturday, August 24, ETH was up 5.63% to $2,760. (BTC: + 9.13%).

SEC vs. Ripple: Kraken Ruling May Influence SEC’s Appeal Strategy

XRP was up 7.86% to $0.6080 from Monday, August 19, to Saturday, August 24. Uncertainty about SEC plans to appeal rulings from the SEC vs. Ripple case left XRP below the August 7 high of $0.6434. On August 7, Judge Torres delivered her final judgment, ordering Ripple to pay a $125 million fine and to comply with US Securities laws.

The SEC has 60 days from the final judgment date to file an appeal. However, other SEC vs. crypto court rulings may influence the SEC’s decision regarding Ripple.

On Friday, Kraken Chief Legal Officer Marco Santori shared a crucial court ruling in the SEC vs. Kraken case, saying that the US courts ruled that no tokens trading on Kraken are securities.

The ruling further endorses the Programmatic Sales of XRP ruling, where Judge Analisa Torres determined that programmatic sales of XRP do not satisfy the third prong of the Howey Test.

Pro-crypto lawyer James Murphy, also known as MetaLawMan, commented on the court ruling, stating,

“The Court denied Kraken’s motion to dismiss. […]. As I read the opinion, I sympathized with the Judge as he had to sift through a lot of conflicting crypto case law that has developed as a consequence of the SEC’s scattered, regulation-by-enforcement approach.”

Murphy added,

“Interestingly, the Judge specifically aligned himself with the reasoning of Judge Torres in the Ripple case on a number of points.”

US Politics Highlight Crypto Significance

This week, the US Presidential Election took an unexpected turn as independent Robert F. Kennedy Jr. officially suspended his campaign, backing Trump.

RFK Jr. and Trump have targeted the crypto vote in campaign speeches. However, Kennedy only had 4.6% of the vote, while Kamala Harris leads Trump by 3.7 points, according to the latest polls. Kennedy’s endorsement may boost Trump’s electoral base. A Trump victory could end the SEC’s reign of regulation-by-enforcement that troubles the crypto market.

In July, Trump declared,

“On day one, I will fire Gary Gensler.”