Bitcoin takes off and the rest of the crypto market follows

Every week, Amdax summarizes what’s happening in the crypto market for you. Want to dive deeper? Click on the links (if available) in this article for more insights.

Market update

Stay informed in three steps:

1. Bitcoin tops 80,000 dollars for the first time since May
Bitcoin broke out of the range it had been stuck in for weeks and touched 81,250 dollars, its highest level since mid-May. It now sits around 79,000 dollars, 22 percent higher than a week earlier, with the strongest three-day rise since 2023. Bitcoin was not the only one having a good week: Ether also climbed sharply and is at its highest point since January. Bitcoin ETFs grew by more than 1.7 billion dollars over the week. At the same time, large amounts of short positions were liquidated when the price increased. Together with the first sharp rise after a long stretch of decreasing prices, the crypto market had one of its best weeks in years. And where 2023 and 2024 were mostly about bitcoin moving up, the whole market came along this time, with outliers such as Ethena rising 100 percent in five days.

2. The dollar loses ground, and hard assets pick up
The trigger for the breakout did not come from crypto but from the US government. On August 19, the Treasury said it would buy back more long-term bonds, a move meant to lower interest rates. The thirty-year yield sits around 5.2 percent and works its way through the entire economy, from mortgage rates to the rates companies pay to raise capital. The market reacted firmly, with both gold and the crypto market rising sharply. This is a dynamic we have seen before: the so-called "debasement trade", where a falling dollar value goes hand in hand with a rising price for hard assets such as gold and crypto.

3. Washington is no longer waiting for Congress
Regulators did not stay on the sidelines either. The CLARITY-Act took center stage at the White House on Wednesday, where Trump hosted around twenty crypto executives and the chairs of the SEC and the CFTC. The bill is unlikely to move soon, given the recess and the upcoming midterms. On 18 August the SEC formally published its Regulation Crypto Assets proposal, which creates a separate route for raising capital with crypto. A day after the summit the CFTC said that if the CLARITY-Act stays stuck, it will use its existing powers to set rules itself. In concrete terms that means bringing exchanges where clients can trade perpetual futures to the US. Right now those firms are mostly based in Asia and are not available to American clients. The OCC, part of the Treasury, also said it wants to finalize the federal stablecoin rules in November, putting parts of the CLARITY-Act into effect without the law formally being passed.

Ries' take

Where the market had been flat for weeks and volatility sat at its lowest level in years, this week turned that completely around. Late last week we saw rises we had not seen in a long time. Ether jumped 20 percent in a day and the whole market 23 percent over the week, and unlike in 2024 the gains were not limited to bitcoin. Looking at history, we can be cautiously positive here. When a period of very low volatility was followed by a sharp rise, in 2018, 2022 and 2023 that was only the beginning of a bigger move. The question is whether that is the case again now.