Atkins Redefines Crypto Rules

In case you missed it! Our recap of last week’s reports:

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• DeFi Analytics 15th August 2025
• Block Scholes x Bybit Crypto Derivatives

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Daily Updates:

• Cryptocurrencies extended their almost one-week long slide with Bitcoin falling as low as $112.6K in early Asian trading hours. ETH is down 1% over the past 24 hours, and 9% over the past week, finding a local bottom of $4,060 earlier today.
• That mirrors sentiment in US equity markets too, where a selloff in big tech caused the Nasdaq 100 to slump 1.39%, while the S&P 500 index fell 0.59%.
• The sharp de-risking across risk-on asset classes comes as investors and traders have turned cautious ahead of Chair Powell’s Friday speech at the annual Jackson Hole Symposium.

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• After a CPI report on Tuesday last week that showed higher core inflation in the US but a tepid rise in the cost of goods (which tempered some concerns over tariff-induced inflation), markets had all but fully priced in a September rate cut. However, a significantly stronger-than-expected PPI inflation report forced markets to reassess their stance: 30-day federal funds futures currently indicate an 82.9% probability for a 25bps cut to the federal funds rate – a notable hawkish shift from market participants, given those odds were as high as 98% earlier last week.
• President Trump made his thoughts clear yesterday on Truth Social where he posted “There is no inflation, and every sign is pointing to a major rate cut”.

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• US Treasuries broke their three-day slide and rose yesterday, with ten-year treasury yields falling 3bps to 4.30%.
• That came after S&P Global Ratings affirmed the US credit grade at AA+, a score it has given the largest economy in the world since 2011, after it downgraded the US from AAA. S&P Global Ratings said “Amid the rise in effective tariff rates, we expect meaningful tariff revenue to generally offset weaker fiscal outcomes that might otherwise be associated with the recent fiscal legislation, which contains both cuts and increases in tax and spending.”

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• The sharp selloff leading into Powell’s Jackson Hole speech is not something new. As shown in the Charts of the Day, in 2024, we saw the same pivot away from risk-on assets, with BTC and the S&P 500 selling off ahead of the Chair’s speech.
• However, back then Powell took to the podium and made clear his intentions that the Fed’s fight against inflation was over, and its attention needed to be shifted towards the labour market — “The time has come for policy to adjust” and the Fed “will do everything we can to support a strong labor market”.
• This time around Powell is facing a more obvious drag on both sides of the Fed’s dual mandate, which may make it harder to announce a pivot towards rate cuts as easily as he did in 2024.
• US equities duly went on to rally and BTC surged past $64K, before both sold-off shortly after.

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• Derivatives markets for BTC and ETH seem less hopeful of a 2024 repeat. Both are pricing in for a continued move to the downside. ETH skew for all options expiring 60 days or less is tilted towards OTM put options, while 90- and 180-day options carry an implied volatility premium towards calls.
• For BTC, volatility smile skew is even more bearish – across the entire term structure, smiles are skewed towards puts, with 7-day skew currently at -5.4%.

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• The derisking in BTC and ETH spot markets is also apparent in Spot ETF flows. Yesterday marked the third consecutive day of net outflows from BTC Spot ETFs, which sold $523.3M worth of Bitcoin, led primarily by a $246.9M outflow in Fidelity’s BTC fund.
• Spot ETH ETFs fared worse comparatively. The nine products collectively sold $422.2M of Ether — the second largest day of outflows on record, with the top three biggest outflow days all occurring in August alone.

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• The state of Wyoming officially launched its own stablecoin yesterday. The Frontier Stable Token, FRNT, will be backed by US dollars and short-term treasuries, plus an extra 2% overcollateralisation and is live on seven blockchains, including Ethereum and Solana.

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• At the Wyoming Blockchain Symposium in Jackson Hole on August 19, 2025, SEC Chair Paul Atkins suggested that very few crypto tokens should be treated as securities.He emphasized that it’s not the token itself but the surrounding context—how it’s packaged and sold—that determines whether it qualifies.
• “This idea that just the token itself is a security…probably not,” Atkins said. His remarks mark a clear departure from former Chair Gary Gensler, who viewed most digital assets as securities under the Howey test.
• The comments come as Congress advances the Digital Asset Market Clarity (CLARITY) Act, aiming to establish formal rules for the crypto market, while the SEC appears poised to take a more cautious, case-by-case approach.

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• Stablecoin issuer Tether has appointed former White House Crypto Council executive director, Bo Hines as the Strategic Advisor for Digital Assets and U.S. Strategy.
• Following Hines resignation from the Trump administration earlier this month, he will start his new role immediately, where he will lead and coordinate Tether’s U.S. strategy and growth efforts.

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• The UK’s annual inflation rate jumped to 3.8% in July 2025, up from 3.6% in June and above the 3.7% forecast. Transport costs were the main driver, climbing 3.2% versus 1.7% in June, led by a 30.2% spike in airfares.
• Core inflation also decreased up to 3.8%, reflecting faster growth in both goods (2.7% vs. 2.4%) and services (5.0% vs. 4.7%). This marked the highest core inflation since early 2024.

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• The Eurozone’s annual core inflation rate remained steady at 2.3% in July 2025, unchanged from June and May. By comparison, core inflation in the Euro area has averaged 1.93% since 1991, reaching a peak of 5.7% in March 2023 and a record low of 0.2% in September 2020.

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This Week’s Calendar:

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Charts of the Day:

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