Market update

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

This newsletter is a co-production with our partner, Bitcoin Alpha. 

Stay informed in three steps:      

1. Ether pulls back after record month
After reaching new all-time highs at the end of August, Ether dropped back to around $4,200. The price movement coincided with profit-taking and a shift in ETF flows. While August was still a record month with billions in inflows, the last days of the month saw outflows instead. This shows that investors are locking in profits after the strong rally.

2. Bitcoin consolidates around $111,000
This week, Bitcoin remained in a narrow range between $108,000 and $112,000, close to the lowest levels of the summer period. However, Bitcoin ETFs saw inflows again on the first trading day of September. This is an early sign that investors are willing to re-enter at lower prices, although the picture remains mixed.

3. Altcoins hold their ground
Several major altcoins, such as Solana and Aave, have shown resilience in recent weeks while Bitcoin weakened. There is not yet a broad altcoin rally, but the relative momentum of these projects stands out. If Bitcoin shows more stability, there could be more room for a convincing recovery in the altcoin market.

News Overview

The key headlines from this week:

• SEC and CFTC clear the way for spot crypto. U.S. regulators have jointly declared that regulated exchanges can begin offering spot crypto products. This paves the way for players such as Nasdaq and CME to enable direct trading in Bitcoin and Ether. Analysts see this as an important step toward broader adoption within the existing financial infrastructure.

• Rising search volume confirms interest in Ether (ETH). The number of searches for the market’s second-largest cryptocurrency has risen to levels last seen in 2022. The price performance of ETH, which has been significantly stronger than BTC over the past 30 days, is cited as the main driver. Behind this trend is, among other things, the rise of companies buying Ether to hold in their treasuries.

• Aave launches Horizon, a new market for real-world assets. Institutional investors can borrow stablecoins against tokenized government bonds and shares in money market funds as collateral. Partners such as Circle and VanEck are expected to give the new financial network a strong start with liquidity and legitimacy. Aave believes it can bring up to $25 billion in traditional assets into the DeFi world.

• U.S. government records GDP data on-chain. The Department of Commerce placed a hash of the latest quarterly figures on nine public networks, ranging from Bitcoin to Avalanche. Core data was also distributed via Chainlink and Pyth oracles. Coinbase and Kraken supported the effort. The agency stated that this makes the U.S. economy both “immutable” and globally accessible.

• Stablecoin market breaks through the $280 billion mark. Almost $3 billion was added in just the past week. Notably, Ethena’s USDe has doubled in size since August of last year. Only USDC and USDT are larger. This shows that DeFi stablecoins, often offering attractive yields, can grow quickly—even in a market dominated by two giants.

• Google develops its own blockchain network for banks. The Universal Ledger is designed to serve as a neutral payment network, featuring smart contracts built on Python, a widely used programming language. The network is operational as a testnet. With CME Group as a pilot partner, Google is positioning itself as a serious infrastructure player for on-chain finance, with a focus on compliance and institutional adoption.

Amdax’s Take

The new record high for ether shows there is structural demand, particularly through ETFs. Ethereum is increasingly seen not just as technology but as a full-fledged investment asset. As a result, it is attracting capital that previously flowed mainly into bitcoin.

At the same time, bitcoin fell to its lowest point since July. This demonstrates that investors remain cautious as long as there is no clarity on interest rate policy. Upcoming data on inflation and employment will determine whether there is room for rate cuts, and with that, for a broader rally.