The crypto markets are up this week, BTC is up 6%, Eth 13%, etc with all the top 10 cryptos in terms of market cap being up. SUI continues to soar and is now up 45% sitting at $1.74. Biggest winners are SUI and TAO being up 46% and 78% respectively.
Crypto asset manager Grayscale Investments announced the launch of two crypto investment trusts, adding Bittensor and Sui to its product suite.
On Aug. 7, the crypto investment provider stated that its Grayscale Bittensor Trust product would focus on investing in TAO (TAO), the native token of the Bittensor protocol. The project used tokens to incentivize the development of open-source artificial intelligence.
Historically, stocks tend to underperform in September, but this year has defied that trend. A surge in risk appetite propelled the S&P 500 to its 41st record high of the year, while the Dow Jones also posted significant gains. Nvidia, which climbed nearly 4%, played a key role in driving the S&P 500 higher. The chipmaker has become a bellwether for risk sentiment, often rallying when investors are more willing to embrace risk. Big daily swings have become the norm for Nvidia as it edges closer to a $3 trillion valuation.
Two notable dynamics are currently influencing the blue-chip U.S. stock indices. First, Nvidia is once again leading the charge among the "Magnificent 7," suggesting that concerns about the future of AI, which contributed to last month's tech sell-off, have eased for now. If AI continues to be a dominant investment theme, U.S. blue-chip stocks are likely to benefit.
Secondly, the rally isn't confined to the tech sector alone. The other 493 companies in the S&P 500, outside of the Magnificent 7, also hit record highs on Tuesday, as did the Dow Jones Industrial Average. The equal-weighted S&P 500 index is closely mirroring its market capitalization-weighted counterpart, signaling that gains are being distributed across various sectors. This broad-based strength suggests there could be more room for U.S. stocks to rise.
Last week, the Federal Reserve reduced its benchmark interest rate for the first time in over four years, marking the start of a long-awaited shift toward normalizing monetary policy after keeping rates at a two-decade high for more than a year.
Initially, market participants were unusually uncertain about the outcome of the Fed meeting and unsure how to interpret the substantial half-percentage point cut. However, as concerns about the magnitude of the move subsided, stocks surged to record highs by Thursday.
Wall Street’s reaction reflected a mix of caution and optimism. While rate cuts generally benefit the stock market by lowering returns on fixed-income investments and fostering business growth, they also signal potential economic trouble ahead—particularly with larger cuts like the one made last week. Jerome Powell stressed that the US economy is strong and that the cuts are coming as a result of positive inflation figure trends on one side and concerns for the labour market on the other. As for potential further rate cuts, researchers and investors believe it likely the FED will introduce another series of cuts in November. On Polymarket, online betting site, another 50 bips cut is priced at 50% likelihood.
Bitcoin and the broader crypto market remained relatively subdued following the announcement by People's Bank of China (PBoC) Governor Pan Gongsheng that China would reduce its reserve requirement ratio (RRR) by 50 basis points (bps). The RRR represents the portion of deposits that commercial banks must hold in reserve rather than lending or investing. A reduction in the RRR typically stimulates the economy by increasing the availability of loans and allowing banks to make more investments.
While Chinese stocks rallied in response to the news, Bitcoin and altcoins showed little to no reaction, in contrast to the crypto market rally that followed the U.S. Federal Reserve’s decision to cut interest rates by 50 bps. This muted response highlights the growing correlation between Bitcoin, Fed rate changes, and U.S. stock performance.
However, with central banks globally easing economic policies and the historical trend of a strong Q4 for crypto, the market may still be poised for a significant rise in the coming weeks.
One of the major developments last Friday was the U.S. Securities and Exchange Commission’s (SEC) approval for the listing and trading of physically settled options tied to BlackRock’s spot Bitcoin (BTC) ETF, the iShares Bitcoin Trust (IBIT).
Bitwise’s head of alpha strategies suggested that these products could pave the way for significant upside volatility in Bitcoin’s price. On Sept. 20, the SEC gave its regulatory approval for the Nasdaq exchange to list options on BlackRock’s iShares Bitcoin Trust ETF (IBIT), marking the first time the SEC has allowed options linked to spot Bitcoin funds for U.S. customers.
Jeff Park, Bitwise Asset Management’s head of alpha strategies, described the introduction of spot Bitcoin options on regulated U.S. exchanges—where the Options Clearing Corporation (OCC) mitigates counterparty risk—as "the most monumental advancement possible" for cryptocurrency markets in a tweet on Friday.
Partially as a result of this announcement, we can see when we look at the BTC ETF chart, that the BlackRock IBIT BTC ETF has recorded first inflows of 11.5 and 98.9 million dollars this week after seeing no inflow last week. Overall, in the last week, there has been net inflow of over 350 million USD into BTC ETFs. On the other hand, ETH ETFs have not been performing as well, with net outflows of 18 million USD recorded in the last week.
Let us now turn our attention to the price of gold for a moment. It is now standing at $2,656, and it has recorded record high prices over the last few days. This is in part because of the crisis in the Middle East as well as the fed rate cuts.
Finally, some key numbers to look out for this week, we have the Initial jobless claims tomorrow, and the PCE index comes out on Friday. The Core Personal Consumption Expenditure (PCE) Price Index tracks changes in the prices of goods and services purchased by consumers, excluding categories like food and energy. Prices are weighted based on total expenditure per item, reflecting price changes from the consumer’s perspective. This index serves as a critical measure for assessing inflation and shifts in consumer purchasing behavior.
A higher-than-expected PCE reading is generally seen as positive or bullish for the U.S. dollar. Conversely, a lower-than-expected reading is considered negative or bearish for the USD.
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