“If the meeting was tomorrow, I would not see a case for reducing interest rates.”

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

• Panoptic x Block Scholes: Perpetual Options
• DeFi Analytics 15th August 2025
• Block Scholes x Bybit Crypto Derivatives

Daily Updates:

• Throughout this week crypto spot prices have slowly dwindled lower ahead of Chair Powell’s speech at the Jackson Hole Symposium scheduled later today.
• BTC began the week trading at $117K after reaching a record high only last Thursday, on Aug 14, 2025. Since then, it is down more than 4% and has dragged crypto-related equities along with it.
• BTC’s largest corporate holder, Strategy, is down 9% since Monday’s opening and shares of Coinbase are down almost 7%.

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• However, while BTC has struggled to bounce over the past two days, certain altcoins have shown some more strength than the largest cryptocurrency. ETH for example has jumped from a local bottom of $4,080 on Aug 20 and is now trading $4,300. That jump has been supported by a $287.6M purchase of Ether tokens yesterday by Spot ETH ETFs, ending a run of four consecutive trading days of outflows. BTC Spot ETFs however saw their fifth day of outflows (-$194.4M).
• SOL shows a similar pattern of strength too. After initially beginning the week with a drop from $197, since Aug 20, where it fell to $176, SOL has also bounced slightly and is now trading at $184.

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• Derivatives markets for BTC and ETH continue to show defensive positioning, however. As we have seen throughout the week, the put-call ratio for short-tenor BTC options has been skewed towards puts, suggesting that traders are bracing for near-term pullbacks. However, that premium for downside protection against further drops in BTC’s spot price has been across the entire term structure this week, including for longer-tenor options such as 90- and 180-day options.
• In comparison. For ETH options, the protection against downward moves is limited only to the next 30 days. Put-call skew for 90- and 180-day options has remained positive all week.

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• When compared to futures markets however, options traders are more bearish. Funding rates on ETH perpetual swap contracts have mostly increased over the week, with longs paying a 0.01% premium to hold their positions, while funding rates for BTC have also been positive all week.

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• As we mentioned at the start of the week, the selloff in crypto prices has been part of a wider de-risking across risk-on assets. Equity markets fell for another day, driven by large selloffs in big-tech. Palantir shares are down 13% this week, while Nvidia is down nearly 4% — a big move for a company that makes up 14% of the Nasdaq 100 index alone.

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• Chair Powell will have the opportunity later today to flag any potential changes to the Fed’s monetary policy stance, a stance which has currently led the central bank to keep interest rates unchanged for five consecutive meetings.
• The difficulty Chair Powell faces is the mixed signals from the US economy which are affecting both sides of the Fed’s dual mandate. Those mixed signals are fostering very diverse views among FOMC officials.
• In an interview with Yahoo Finance yesterday,  Cleveland Fed President Beth Hammack said “With the information I have, if the meeting was tomorrow, I would not see a case for reducing interest rates.”
• That mirrors her comments following the July employment report where she said “it looks like a healthy labour market that’s still well in balance but with some disappointing signs that we should watch very carefully” and that “Right now we’re missing by much more on the inflation side than we’re missing on the employment side”.

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• The Fed’s July meeting minutes support that view: “Participants noted that, if this year’s higher tariffs were to generate a larger-than expected or a more-persistent-than-anticipated increase in inflation, or if medium- or longer-term inflation expectations were to increase notably, then it would be appropriate to maintain a more restrictive stance of monetary policy than would otherwise be the case”.
• Atlanta President Raphael Bostic however still sees one more rate cut this year — in line with his June projection. Speaking at an event yesterday, the Fed President said “That’s kind of still where I am”, though added he’s “not stuck on anything”, should the impact of tariffs come in stronger than expected.

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• The former President of the St Louis Fed, James Bullard, said yesterday that “Rates are a little bit high right now, and I think we can get down about 100 basis points going into 2026. I think that’ll start with a rate reduction here at the September meeting, and probably be followed up later this year”. Last week Bullard said he spoke with Treasury Secretary Scott Bessent about potentially heading the Fed after Chair Powell’s term ends in May 2026.

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• Japan’s financial group, SBI Holdings have announced a series of partnerships, expanding their stake within digital infrastructure and web3:
• This includes a partnership with crypto infrastructure leader, Startale Group Pte Ltd to launch an onchain trading platform for tokenized stocks and real-world assets (RWAs).
• The new platform will offer 24/7 trading of tokenized stocks and RWAs, instant cross-border settlement, fractional ownership, seamless DeFi integration, institutional-grade custody, advanced account abstraction, real-time global regulatory compliance and scalable infrastructure.
• SBI Holdings have also announced a joint venture with stablecoin issuer Circle, to drive USDC adoption in Japan by leveraging SBI’s regulatory expertise, financial network, and liquidity infrastructure.
• Additionally, they have partnered with Ripple to support the rollout of stablecoin RLUSD in Japan, leveraging SBI’s strong market presence.

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• MetaMask has announced its native stablecoin MetaMask USD ($mUSD), that will serve as the digital dollar for the MetaMask ecosystem, scheduled to launch later this year on Ethereum and the Layer-2 network, Linea.

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This Week's Calendar:

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Charts of the Day:

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