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#Fed #Crypto In previous articles, we mentioned that U.S. financial regulators have always had complicated feelings toward the crypto industry: they worry about risks, but also fear falling behind, and in the end gradually compromise with the development of the crypto sector. This emotional attitude has been reflected in U.S. financial regulatory policy. Over the past few years, American financial regulation has repeatedly swung between relaxation and strict control, then gradually loosened. Since 2024, major institutions in the U.S. have gradually begun to “accept” the crypto industry. Recently, the Federal Reserve officially announced the cancellation of the “Novel Activities Supervision Program,” reintegrating the supervision of banks’ crypto and fintech-related businesses back into the standard regulatory process. This news has undoubtedly stirred up no small wave in the crypto community. On the surface, this is just an adjustment to the regulatory framework. But when interpreted in the broader environment, it reveals several important signals: first, a clear softening of regulators’ attitude; second, an easing of tensions between crypto firms and banks; third, a repositioning of the U.S. financial system regarding crypto. Today, let’s analyze from several angles: What does this step by the Federal Reserve mean? What opportunities and challenges will it bring to the crypto market? And where might it lead in the future? Review: The Past and Present of the Fed’s “Special Supervision Program” To understand this change, we first need to look back at the background of this regulatory program. In 2023, the U.S. banking crisis erupted: Silicon Valley Bank (SVB), Silvergate Bank, and Signature Bank all collapsed in succession — and these just happened to be banks closely connected with the crypto industry. At that time, suspicion toward the crypto sector within the financial system reached its peak. In order to prevent “innovation risks” from triggering systemic problems, the Federal Reserve urgently set up the so-called “Novel Activities Supervision Program,” aimed at applying extra scrutiny to banks engaged in crypto, blockchain, and fintech businesses. To put it bluntly, this program functioned more like a “firewall.” It did not directly prohibit banks from participating in crypto-related business, but it dramatically raised compliance costs. For many banks considering entering crypto, simply dealing with approvals and compliance discussions consumed massive resources — some even chose to give up altogether. Thus, this became one of the most common complaints from crypto firms: U.S. regulators did not outright ban, but “persuaded banks to quit” through cumbersome processes. The Logic and Significance Behind the Fed’s Sudden Cancellation: Banks No Longer “Fear Crypto” Now, the Fed has suddenly announced the cancellation of this program, returning crypto supervision to the standard process. Behind this lie at least three layers of logic: 1. A deeper understanding of crypto business risks. In the past, regulators considered crypto a “black box”: they did not understand how risks transmitted, nor the industry’s logic, so they could only apply “special treatment.” But after more than a year of research and observation, the Fed gradually realized that crypto businesses are not a monstrous flood — their risks can be managed using conventional regulatory tools. 2. A political shift in the U.S. regulatory environment. Since Trump took office, the policy direction has clearly changed. He has repeatedly released pro-crypto signals, emphasizing that the U.S. should become a “crypto innovation center.” Against this backdrop, the Fed’s move is undoubtedly aligned with broader policy, a kind of policy echo. 3. The practical needs of the financial system and banks. As the crypto industry continues to grow, if traditional banks are kept permanently outside, they will lose market opportunities. Many banks can find new profit growth points in custody, payment settlement, and cross-border services through crypto businesses. The Fed’s “loosening” is, in a sense, giving banks breathing room. For the banking sector, these changes are very direct. Previously, many U.S. banks kept their distance from crypto clients, fearing that involvement would make them a key target of regulatory scrutiny. But now, with the special supervision program gone, banks can handle crypto-related business under conventional risk management processes. In other words, as long as basic requirements like AML (anti-money laundering), KYC (know your customer), and consumer protection are met, banks can fully decide for themselves whether to offer services. This means that in the future, more banks will reconsider providing accounts, payments, and custody services to crypto firms. For the crypto industry, this is a long-awaited positive, because “opening a bank account” has been one of their biggest pain points in recent years. The Significance for the Crypto Industry: A Clearer Path to Compliance For the crypto sector, this does not mean regulation is completely lifted, but it does mean the compliance path is clearer. In the past, firms often complained about policy ambiguity: Can we do this? What approvals are required? When might we be shut down? This uncertainty forced many projects to take detours, or even move headquarters to Europe or Asia. Particularly in the U.S., despite having the world’s largest pool of capital and users, regulatory vagueness was always a headache — you might open a bank account one day, only to be told by the compliance department the next day that it’s “frozen.” Such cases have been all too common in the crypto industry. Now things are different. With the Fed, OCC, and FDIC all expressing a unified stance, banks can decide on crypto business within the existing regulatory framework. This means crypto firms can cooperate more openly and directly with banks, lowering compliance costs and reducing uncertainty. For example, previously, a crypto company seeking custody services had to repeatedly explain its business logic, prove compliance ability, and even wait for implicit “permission” from regulators. Now, banks can make the decision themselves, based on their own risk control systems. This directly improves efficiency and reduces anxiety for firms operating in the “policy gray zone.” From a long-term perspective, this certainty will bring two clear changes: 1. Capital inflows will accelerate. Institutional and traditional investors have been cautious about crypto largely because of fears of sudden regulatory shifts leading to stranded assets or exposed legal risks. The regulators’ “unified tone” now provides the market with a signal: there is a path to compliance, and as long as you follow the framework, you won’t suddenly “step on a landmine.” For traditional funds, hedge funds, and even pension funds, this is a huge positive. 2. Business models in the industry will be healthier. In recent years, many crypto projects operated in gray areas to avoid regulation, or focused on overseas markets, which limited their growth. With clearer compliance environments, projects can put more energy into product innovation and user experience, instead of “how to bypass compliance.” This not only improves overall market transparency, but also gives users a stronger sense of security. After all, retail investors’ greatest fear is project fraud or frozen funds — these risks will decrease as compliance improves. What’s more notable is that this compliance shift will not only affect the U.S. but could trigger global policy linkage. The U.S. has always been at the core of the global financial system; if even U.S. regulators begin “drawing boundaries” for crypto, major financial centers in Europe and Asia are likely to follow suit, issuing clearer policy frameworks. This would create a chain reaction: compliance becomes the “new standard” for the industry, rather than a “choice for a few projects.” From this perspective, this is not just a U.S. market positive, but a sign that the global crypto industry is maturing. In short, the era of policy ambiguity is fading. Compliance clarity will bring the crypto industry into a phase of “equal dialogue with traditional finance.” For project teams, this means fewer worries; for institutional investors, this means greater certainty; and for the whole industry, this marks the turning point from wild growth to institutionalization and scaling. Market Opportunities: Capital, Institutions, and New Business 1. Easier institutional capital inflows. A core precondition for institutional investors entering the crypto market is reliable banking and custody services. As banks open up, crypto funds, family offices, and even pension funds will be more confident in allocating digital assets. 2. Smoother payment and settlement services. Banks re-engaging in crypto payments and cross-border transfers will make digital asset use in everyday payments and settlement more widespread. For stablecoins, this is undoubtedly a massive positive. 3. New financial products may accelerate. Bank-crypto partnerships may expand beyond accounts and payments into derivatives, loans, and collateral products. This would push crypto financialization to a new level. The Tug-of-War Between Regulation and Innovation Overall, the Fed’s cancellation of the special supervision program is a form of “compromise with the market” between regulation and innovation. It acknowledges the importance of crypto business, while attempting to bring its risks under conventional frameworks. In the coming years, three trends are worth close attention: Cooperation between banks and crypto firms will increase rapidly, especially in custody, payments, and stablecoins. Compliance will accelerate as the main theme, the era of wild growth will fade, and the survivors will be those willing to embrace regulation. Policy swings will still exist, and the industry must remain flexible, avoiding overreliance on a single market. Conclusion The Federal Reserve’s cancellation of the “crypto special supervision program” is both a reassessment of the crypto industry by the U.S. financial system and a new milestone for the entire industry’s development. For banks, it is a chance to re-enter the crypto track; for crypto firms, it is a turning point in reducing compliance uncertainty; for the market, it is a signal of further institutional inflows. But we cannot be overly optimistic. Regulation will never fully let go, and risk events could always alter policy trajectories. What is certain is that the relationship between crypto and traditional finance will only grow closer. And in the future, the competition will not just be about technology and business models — but also about mastering and adapting to the regulatory environment.

#BlackSeptember #Bitcoin #Fed “Black September” is a meme most of us know well. Each time the calendar flips to September, Bitcoin, Ethereum, and the broader market seem cursed: weak rallies, frequent sell-offs. As the most infamous risk month of the year, September’s poor performance isn’t unique to crypto — traditional markets like equities can’t escape it either. Amusingly, the phrase “Black September” actually originated from the stock market. This September delivered on that reputation again. Bitcoin broke key support, on-chain stablecoins rushed for the exits, and fear spread. As some joked: “Black September isn’t a legend — it’s a required course every year.” The September Curse: Seasonal Anxiety in Crypto 1. The market memory of an “unlucky September” Historical stats in U.S. equities show September has the lowest average monthly return, and the effect is even more pronounced in crypto. From 2017 to 2022, Bitcoin posted negative returns six Septembers in a row. Although this seasonal effect eased somewhat in 2023 and 2024, the “September curse” remains deeply etched in investors’ minds. Come September, even a small gust of wind can amplify fear. This time, BTC slipping below $110,000 and ETH breaking under $3,900 is a textbook case of “historical shadow + market expectations” applying dual pressure. 2. Why does September so often underperform? • Tighter liquidity: Overseas markets enter earnings season, capital tilts toward traditional assets, and risk appetite falls. • Macro policy sensitivity: The Fed, ECB, and others often hold rate meetings in September; markets are hypersensitive to rate expectations. • Market psychology: History nudges investors to take profits or cut exposure early, creating a self-fulfilling loop. In other words, September is often not a “trend-deciding month,” but a “risk-pre-release month.” Behind the BTC and ETH Plunge: Liquidations Are Only the Surface This sell-off once again reveals crypto’s brutality. Many headlines emphasized “longs and shorts liquidated” in derivatives. Data show over 250,000 traders liquidated in 24 hours, with more than $1.1 billion wiped out. On the tape, it looks like a classic leverage cascade. But pinning the drop solely on liquidations only grasps the surface. What truly drove the abrupt downturn was an imbalance of inflows vs. outflows, cooling narratives, a tighter macro backdrop, and the stacking effect of black swans. 1. Institutional flows cool: ETF net outflows exacerbate the drop Over the past two years, “institutionalization” was the market’s biggest certainty. Spot ETFs opened the gates for Wall Street capital, directly propelling BTC and ETH to new highs. Many investors even viewed ETFs as a “base-position backstop.” But in September, the tide turned: • ETH ETFs recorded multiple consecutive days of net outflows, totaling over $500 million. • Bitcoin ETFs also posted net outflows three times this week, totaling around $480 million. Translation: institutions trimmed risk and left. The “backstop bid” vanished. Remember, ETFs are merely pipes for money in and out — they don’t only flow one way. Plenty of retail traders fantasized that “with ETFs, it won’t drop,” but reality shows that when institutions see risk > return, they pull liquidity too. In short, ETFs are a double-edged sword. They can bring incremental capital, and they can also amplify downside when the market cools. 2. The DAT narrative cools: valuations re-anchor to NAV Beyond institutions, “narratives” powered this summer’s rally — especially the Digital Asset Treasury (DAT) model, which gave ETH a sizable premium. • In the hot July–August phase: weighted mNAV for ETH DATs once exceeded 5×, capital poured in, and volumes hit records. • By September: that story’s pull faded quickly; mNAV fell back near 1×, with almost no premium left. • Related projects’ on-chain activity dropped sharply; investor enthusiasm ebbed fast. This means the market is de-story-fying, re-anchoring capital to true net asset value (NAV). Without narrative support, ETH struggled to maintain lofty valuations — so a break below $3,900 became natural. It’s a reminder that crypto narratives are highly cyclical. From “AI + Crypto” to “RWA” to “DAT,” each story has a shelf life. When the buzz fades and capital turns rational, prices correct. 3. Macro factors: The Fed’s uncertainty Macro remains an inescapable variable. Recent U.S. data stayed strong — especially jobs and consumption — reinforcing views of a resilient economy. The fallout: • Hopes for an October rate cut were clearly reduced. • The Fed is split internally on whether to cut this year. • The U.S. dollar index strengthened, and global risk appetite fell. For BTC and ETH, that’s undeniably bearish. In global investors’ eyes, they remain high-volatility risk assets. When rate expectations wobble and the dollar strengthens, capital naturally flows out of crypto and back into more stable assets. Put simply, macro headwinds formed the essential backdrop for this drop. Without macro “help,” the negatives from ETF outflows and narrative cooling might not have been amplified so quickly. 4. Black swans: On-chain attacks fan the flames To make matters worse, recent security incidents on-chain helped fuel panic: • UXLINK was attacked, losing $11.3 million, alongside malicious minting. • On BNB Chain, GAIN was exploited for 5 billion tokens, and the price instantly plunged 90%. • The Hyperdrive stablecoin protocol account was attacked; all money markets were paused. By dollar value, these weren’t massive. But amid fragile sentiment, any black swan can be magnified into a stampede. Especially for retail, seeing “hack, crash, mint” triggers first-order selling. In that sense, exploits acted as fuses that fully released fear. In sum, calling this BTC and ETH plunge a derivatives liquidation cascade only captures the result, not the cause. The core logic was a turn in flows and sentiment: • Institutions withdrew via ETFs, draining liquidity. • The DAT narrative cooled, and valuations reverted to rational anchors. • Macro tightened, with Fed policy expectations unstable. • Black swans added fuel, amplifying panic. For investors, it’s another reminder: no single variable explains crypto price action. To understand volatility, you must track capital flows, narrative strength, and the macro — otherwise it’s easy to be fooled by appearances. Can October Bring a Turnaround? Here’s What the Market Is Saying 1. The bull case • Seasonality reversal: History shows October is often a “turnaround month” for Bitcoin, with mostly positive returns in recent years. • Policy catalysts: The U.S. Congress and regulators are advancing market-structure legislation for crypto; passage could lift confidence. • Institutional holding trend intact: VanEck data show 290+ companies hold a combined $163+ billion in BTC; institutional demand remains a long-term support. • A new ETH narrative: As treasury assets tilt toward ETH allocation, ETH could become the next institutional favorite. 2. The cautious view • Technicals not yet stabilized: BTC’s key support is near $109,500; a break could trigger a second leg down. • Unsteady flows: ETF inflows remain choppy; another stretch of net outflows would keep pressure on. • Macro risks linger: The Fed’s policy uncertainty is still the Sword of Damocles overhead. Conclusion This BTC and ETH sell-off once again validated the power of the September curse. In the short run, the market may keep chopping in fear; in the long run, crypto’s foundational logic hasn’t changed: • BTC remains the world’s strongest store-of-value asset. • ETH remains the most promising on-chain economic infrastructure. • Black September is a cyclical wobble point, not the end of the trend. After weathering storms, healthier rallies can follow. October just might be the next rebound’s starting point.

#fed #Crypto This time the Fed didn’t disappoint the mainstream chorus — it finally cut rates. The Federal Reserve announced a 25 bps reduction, lowering the federal funds rate target range to 4.00%–4.25%. This is the first cut since last December and broadly in line with market expectations. While the move isn’t aggressive, the signal sent has jolted global asset markets: U.S. equities swung, gold dipped, the dollar weakened briefly then rebounded, and major crypto assets like Bitcoin and Ethereum moved sharply higher. This rate cut isn’t just the reactivation of a policy tool; it also marks a shift in the macro backdrop and liquidity regime. For crypto, will this be the catalyst for a new bull cycle — or merely a short-term tailwind? This piece breaks it down across four angles: The Fed’s policy backdrop and logic How rate cuts impact traditional markets Direct and indirect effects on crypto How investors can weigh opportunities and risks Why the Fed Cut: Slowing Growth and a Double Bind In its latest FOMC statement, the Fed emphasized several points: Employment growth has slowed, and the unemployment rate has ticked up; Inflation remains elevated, but the overall risk balance has shifted; The rate cut is about “risk management,” not outright stimulus. In other words, the Fed faces a two-sided dilemma: On one hand: a softening labor market raises downside risk to employment; keeping rates high could hasten recession. On the other: inflation isn’t fully subdued, and an overly hasty cut could rekindle price pressures. Chair Powell stated plainly that “there is no risk-free path for monetary policy.” The choice is about balancing jobs and inflation — less a one-way pivot than a calibrated trade-off. Notably, the dot plot suggests room for two more cuts this year, with cumulative easing possibly reaching 75 bps. Markets have pre-priced much of this, which has helped support risk assets. First-Order Reactions in Traditional Markets Right after the decision, major markets responded quickly: U.S. equities: Nasdaq fell as much as ~1% before recovering; the Dow rose. Equities remain cautious on the rate path, but easier liquidity expectations still underpin prices. U.S. Treasuries: Yields fell, then rose — signaling ongoing disagreement on growth and policy trajectories. Gold: Spiked, then faded as some investors took profits. U.S. dollar: Dipped, then rebounded — underscoring that a cut doesn’t guarantee a sustained USD downtrend. Takeaway: the market treats the cut as a supportive signal, but not necessarily the start of a broad, long-lasting bull — more a near-term repricing. What the Cut Means for Crypto 1) Lower Funding Costs Favor Risk Assets There’s no direct mechanical link between crypto and the fed funds rate, but liquidity and risk appetite transmit powerfully. A cut reduces funding costs: The opportunity cost of holding cash falls, raising the appeal of risk assets; Institutional capital can deploy leverage or financing more readily; With global liquidity expanding, non-sovereign assets like BTC tend to benefit. As several analyses note, since 2023 USD liquidity has tracked Bitcoin’s trend closely. If this cut is followed by two more, it could become a core variable pushing BTC to fresh highs. 2) Bitcoin’s “Digital Gold” Thesis Gets a Boost In high-rate regimes, income-producing instruments (deposits, bonds) look more attractive. As rates fall, those “risk-free” returns shrink and BTC’s scarcity and upside optionality stand out again. Commentators argue this wave of cheaper capital can buoy Bitcoin further. Historically, each liquidity-easing phase overlapped with BTC bull legs: Post-2020 pandemic QE: BTC made new ATHs; From 2023’s pause in hikes: BTC advanced past the $100k mark; Now: will this cut ignite a third crescendo? It’s a key watchpoint. 3) Tailwinds for ETH and Application-Layer Assets Unlike BTC, ETH and broader application assets (DeFi, GameFi, etc.) rely more on active capital. Lower rates mean cheaper financing and speculation — these segments may show higher beta than BTC. Some strategists note that beyond BTC, ETH and AI-adjacent themes could also be beneficiaries. The pattern from prior cycles often holds: BTC leads, then ETH and higher-risk assets follow. 4) Short-Term Risks: Over-Exuberance and Higher Volatility A cut isn’t a one-way ticket up: “Buy the rumor, sell the news” can trigger profit-taking once the decision lands; Crypto volatility can amplify rate-driven sentiment — fueling both stronger rallies and sharper pullbacks. Market color suggests BTC is facing strong resistance around $110k–$116k. A clean break and hold favors continuation; failure risks renewed range-trade chop. Medium-Term: What Will Determine If the Bull Extends? Pace and magnitude of cuts: If three cuts materialize this year, liquidity improves meaningfully; a renewed inflation flare-up turning the Fed hawkish could whiplash risk assets. Macro resilience: Cuts often imply slowing growth; if recession risk rises meaningfully, risk appetite can deteriorate — dragging on crypto. Regulatory climate: Liquidity helps, but policy remains the biggest wildcard. U.S. SEC/CFTC posture and global compliance paths will shape the speed of institutional inflows. Sentiment & cycle: With BTC already near historical highs (≈$118k), continuation requires fresh net inflows, not just rate-cut optics. Investor Playbook: Opportunity and Risk Positives: improving liquidity; potential for BTC/ETH to revisit or make new ATHs. Risks: overheated short-term sentiment and elevated volatility — chasing breakouts carries danger. Practical approach: Track key support/resistance on BTC/ETH; avoid emotion-driven chasing. Follow DeFi/AI/app-layer themes, but size positions conservatively. Long-term allocators can treat the easing cycle as a DCA/add window — ladder entries rather than lump-sum buys. Bottom Line This Fed cut is both a policy adjustment and a reshaping of global liquidity conditions. For crypto, it may be a powerful bull-market extender — but it doesn’t erase risk. As Powell said, there’s no risk-free policy path. Likewise, there’s no risk-free crypto allocation. In a market where inflows and volatility co-exist, investors must see the opportunity and keep their discipline. In short: rate cuts are a catalyst for crypto — but whether we make new highs will depend on the confluence of liquidity, policy, and sentiment.

#Trump #Cook #Crypto Disclaimer: This article provides an in-depth analysis of market hot topics only. It does not involve or represent any political stance or political views. A butterfly flaps its wings in South America, and the result might be a tornado in Texas. At this moment, the butterfly effect has been vividly demonstrated: what seemed like a trivial mortgage issue triggered a storm leading to the attempted removal of a Federal Reserve Governor. This is essentially a political clash over “who gets the final say”: the President seeking to fire a Governor, while the Fed insists that “Governors cannot be arbitrarily dismissed.” What looks like a power struggle quickly spilled over into financial markets — and even shook the crypto world. Some joked: “The Fed’s meeting minutes matter less than one sentence from Trump.” Others warned: “The politicization of crypto markets has reached a new high.” So how exactly did this “Trump vs. Cook” drama unfold, and why did it ripple through both Wall Street and crypto? Let’s break it down step by step. Click to register SuperEx Click to download the SuperEx APP Click to enter SuperEx CMC Click to enter SuperEx DAO Academy — Space The Timeline: Trump’s Attempt to Remove Cook 1. The Trigger: Mortgage “Fraud” Accusation → Trump Strikes The story didn’t begin with monetary policy, but rather with what seemed like a trivial “butterfly” — a home loan. According to media reports, FHFA Director Bill Pulte accused Fed Governor Cook of applying for mortgages on two properties, declaring each as her primary residence to secure lower interest rates. Cases like this aren’t rare in the U.S., but when it involves a high-profile official, it becomes political ammunition. Trump seized the opportunity. On social media, he immediately amplified the report and bluntly declared: “Cook should resign immediately.” Remember, Trump has long held grievances against the Fed. Since taking office, he’s repeatedly blasted the central bank for not cutting rates, even calling out Chair Powell as “slow to act.” After years of stalemate, Trump shifted his sights from Powell to the Governors. Cook — neither his appointee nor free of controversy — became the perfect target. Thus, Trump moved quickly, announcing his intention to remove her. 2. The Fed Pushes Back: Governors Cannot Be Arbitrarily Fired But here’s the key question: Can the President actually fire a Fed Governor? The answer: not so simple. Under the Federal Reserve Act, Governors serve 14-year terms precisely to guarantee central bank independence and shield it from short-term political cycles. Legally, the President can only remove a Governor “for cause.” But what counts as “cause”? The law doesn’t clearly define it. Typically, only serious misconduct or major ethical violations qualify. Whether Cook’s mortgage issue rises to that level is for the courts to decide. The Fed responded swiftly: A Governor’s term is fixed; the President cannot dismiss at will. Cook remains a sitting Governor and will participate in rate decisions unless a court rules otherwise. Cook, through her lawyer, announced plans to sue immediately to defend her rights. This means at the upcoming Sept. 16–17 FOMC meeting, Cook will almost certainly still be present. Even if Trump ultimately prevails, his action won’t take immediate effect. 3. Trump’s Real Goal: Rate Cuts Trump’s public feud with the Fed isn’t really about Cook — it’s about pushing rate cuts. For years, Trump has argued that high rates are shackles on the U.S. economy, hurting stocks and jobs. He wants easier money to fuel growth, lower government debt costs, and — politically — to showcase a booming economy under his watch. Markets understand this logic: rate cuts lower financing costs, boost equities and housing, and ease fiscal stress. For a president who equates prosperity with political strength, this is vital. But Chair Powell and most Governors insist on a “data-dependent” approach: only if inflation subsides and employment holds steady will cuts be considered. This cautious stance clashes directly with Trump’s political urgency. So Trump bypassed policy debate and turned to personnel and public pressure instead. By targeting Cook, he sent a blunt signal: “If you don’t comply, I’ll reshape the Fed’s power structure step by step.” The risks? Market doubts about Fed independence could rise, raising long-term inflation expectations. Wider rifts inside the Fed would make future policy harder to predict, fueling volatility. In short: Trump’s rate-cut gamble is a double-edged sword. Short-term, he may win cheers from markets and voters. Long-term, the Fed’s credibility — and the dollar’s global standing — may quietly erode. Market Reaction: Stocks and Crypto Rally While the political drama unfolded, markets already voted. On the very day Trump declared Cook’s ouster and hinted rate cuts were inevitable: U.S. equities surged: Dow +1.89%, S&P 500 +1.52%, Nasdaq +1.88%. Crypto soared even more: BTC rebounded to $117,000; ETH broke above $4,800, and by Aug. 25 touched a new ATH at $4,956. Why? Because traders read Trump’s move as political pressure that makes rate cuts nearly certain. Liquidity easing = risk assets rally. Both Wall Street and crypto followed the script. Ripple Effects in Crypto: Capital Shifts & New Hotspots For crypto, the impact goes beyond price spikes — it’s about capital allocation. 1. BTC flows into ETH On-chain data shows about $2B in BTC rotated into Ethereum during the dip-and-rally cycle, suggesting institutions see ETH as a stronger play in this environment. 2. Institutions quietly accumulate ETH In the last 12 hours, BitMine received 131,736 ETH from custodians like BitGo, Galaxy Digital, and FalconX — clear evidence of big money doubling down. 3. New project tokens get a boost Liquidity expectations also lifted certain DeFi governance tokens, which spiked in volume and price. This is the butterfly effect in action: one political move, cascading into global crypto flows. Conclusion Some say Trump and crypto are in a “mutual exploitation” relationship: crypto leverages Trump’s publicity and policy shocks, while Trump points to market rallies — stocks and coins alike — as proof he’s “reviving the economy.” This Cook episode is just the latest example. Regardless of how the courts rule, Trump has already succeeded in putting the Fed on the political stage — and dragging crypto into the storm of power struggles. Perhaps that was his real goal all along.

#FOMC #Stablecoin #Crypto At the beginning of August, the Federal Reserve (Fed) released the minutes of its July FOMC meeting. This set of minutes was somewhat unusual: if in past years the content was mostly the old themes of inflation, employment, and interest rate balance, then this time, a brand-new “protagonist” kept showing up again and again — stablecoins. According to the full text of the minutes, the term “stablecoin” appeared eight times, its level of attention even exceeding that of some traditional topics. For the Fed, this was not a casual mention, but rather a deliberately bolded signal. One must know, in the traditional central bank lexicon, any word that gets repeatedly mentioned is basically a variable that could potentially shake the financial system. This is not a coincidence. With the passing of the GENIUS Act, stablecoins have already leapt from being a marginal “crypto niche tool” to becoming a variable that could affect monetary policy, the banking system, and even U.S. fiscal policy. This means the Fed is no longer only watching inflation and the yield curve, but has begun turning its gaze toward that crypto field they once glossed over. In other words, stablecoins have now officially entered the Fed’s strategic horizon. So, what exactly did the Fed say? And what does this mean for banks, the crypto market, and ordinary investors? Let’s break it down step by step. Key Highlights of the Minutes: Three Core Themes This meeting’s minutes mainly revolved around three blocks: 1. Macroeconomy and Interest Rates Most members believe that inflation risks still outweigh employment risks. The interest rate level may be approaching neutral, but it is still not safe enough to relax. The effects of tariffs may show up with a lag, and companies could pass the costs onto consumers. In other words, the Fed still worries that “inflation might reignite.” 2. Asset Valuation and Market Bubbles The minutes mentioned “concerns about elevated asset valuations.” This line is quite telling. It reads like a reminder to the markets: don’t just stare at rate-cut expectations, the frenzied rise in asset prices is also entering the Fed’s “watch list.” 3. The Sudden Rise of Stablecoins A considerable portion of the minutes discussed payment stablecoins. Committee members believe stablecoins could improve payment efficiency and increase demand for U.S. Treasuries, but at the same time might also impact the banking system and monetary policy. More critically, they clearly pointed out that the passing of the GENIUS Act means the legitimate scope of stablecoin use is expanding. To sum it up in one sentence: the rate path remains cautious → concerns about asset bubbles are rising → stablecoins became the biggest “keyword” in crypto. If we carefully examine the language of the minutes, we can see the Fed’s attitude toward stablecoins shifting from “peripheral observation” to “core agenda.” Scenarios mentioned: payment systems, demand for supporting assets (U.S. Treasuries), financial stability, monetary policy implementation. Tone shift: no longer just “risk reminders,” but now beginning to analyze their systemic impact on the macro and financial system. This means stablecoins are no longer just a “toy of the crypto circle,” but have entered the central bank’s strategic vision. Fed Governor Waller, in his speech, even directly pointed out: AI + stablecoins = the future of payment innovation. He even used the phrase “technology-driven revolution.” In other words, in official language, stablecoins have upgraded from “potential threat” to “potential opportunity.” The “Subtext” of the Minutes: Who Wins, Who Loses? We can treat the Fed’s minutes like an “official dress rehearsal script.” What’s written isn’t just what the central bank plans to do, but also who might benefit and who might get hurt. 1. U.S. Treasuries: The Winners The minutes explicitly stated that with the possible increase in payment stablecoin usage, this will “boost demand for U.S. Treasuries and other safe assets.” Why is this key? Because stablecoins must have a “backing,” and that backing needs to be both safe and liquid. For global investors, assets that meet both conditions are few and far between, and U.S. Treasuries are almost the “only standard answer.” This means the expansion of stablecoins will naturally drive demand for Treasuries. The subtext of the minutes is: “Treasury Department, you don’t need to worry too much about debt issuance being absorbed, because stablecoins will become new buyers.” Against the backdrop of persistent fiscal deficits and huge debt levels, this is a signal not to be ignored. Stablecoins act like an “automatic augmenter,” quietly propping up U.S. debt. From the crypto perspective, this means stablecoins are no longer just “settlement tools in the crypto circle,” but are now deeply binding with the U.S. Treasury market. In other words, behind one USDC lies not just one dollar, but also one dollar plus the credit of the U.S. Treasury. 2. Banks: The Anxious Ones The minutes noted that stablecoins could impact banks and the broader financial system. On the surface this sounds bland, but it actually reveals the anxiety within the banking system. The traditional banking profit model relies on two core elements: Deposit sources: people’s money in banks enables lending and investing. Payment channels: banks act as the infrastructure for domestic and cross-border payments, earning fees and spreads. But once stablecoins gain traction, what happens? Consumers and businesses might no longer need bank transfers, instead settling directly with stablecoins. Deposits could partly migrate into the stablecoin ecosystem. A simple example: if a company’s supply chain partners all accept USDC settlements, then it doesn’t need to keep all its funds in bank accounts, and would instead choose to hold stablecoins. Over time, banks’ deposit pools get “hollowed out,” and payment revenues get “diverted.” This explains why the minutes, though not bluntly critical, contained a hidden concern: stablecoins might cut into banks’ bread and butter. So we see an interesting contrast: The U.S. Treasury market is “smiling” because of stablecoins; The banking system is “anxious” because of stablecoins; The Fed itself is the “conflicted one.” 3. The Fed: The Conflicted Arbiter Another concern embedded in the minutes is that stablecoins could have broader effects on monetary policy implementation. Why? Because the Fed’s main tool for adjusting the economy is interest rate policy, which transmits to markets through the banking system. If more and more funds bypass banks and flow directly into the stablecoin system, the Fed’s tools become blunter. Imagine this: the Fed raises rates, intending for higher bank loan rates to reduce corporate and consumer borrowing, cooling down the economy. But if companies’ funds are mostly circulating in the stablecoin system, the sensitivity to bank loans decreases, and the efficiency of rate policy transmission is reduced. That’s the Fed’s dilemma: stablecoins can improve payment efficiency and bring financial innovation, but at the same time might weaken monetary policy effectiveness, making “hikes” and “cuts” less effective. The emphasis in the minutes on “monitoring the assets backing stablecoins” is essentially the Fed leaving itself a back door. The meaning is: I don’t oppose you playing, but I must watch you closely to ensure the whole system remains within my control. Stablecoins = A Double-Edged Sword To summarize in one sentence: stablecoins are like a double-edged sword. On one side, they cut open payment efficiency, bringing new financial imagination. On the other, they cut into the nerves of banks and monetary policy, causing discomfort to vested interests. For the crypto market, this double-edged sword effect means stablecoins won’t be allowed to “grow wild and free,” but will instead “grow with shackles.” From an investment perspective, this isn’t a bad thing. Because as long as the Fed is willing to pull stablecoins into formal discussions, it means they can’t be easily “killed off.” The only question is, in what form will they continue to exist: As Wall Street and the Treasury’s “new tool”? Or as a “decentralized force” preserving the crypto spirit? The answer may slowly emerge over the coming years. Opportunities and Risks for the Crypto Market For the crypto market, the biggest significance of these minutes is that stablecoins have officially been included in the Fed’s core discussion circle. This brings several implications: 1. Legitimacy Enhancement, Wider Applications The passing of the GENIUS Act legitimizes stablecoins. In the future, compliant stablecoins may quickly penetrate U.S. payments and settlement. This is a major boon for projects like USDC. 2. Revaluation of the Assets Behind Stablecoins If stablecoin reserves increasingly allocate to U.S. Treasuries, it means the crypto world and traditional finance will bind more tightly. In a sense, stablecoins could become the “hidden bid” for Treasuries. 3. DeFi and Traditional Finance Interfaces The “monitoring” mentioned in the minutes is not only regulatory pressure, but also potential interface opportunities. If compliant stablecoins become mainstream, DeFi’s legitimacy will also be lifted, since the underlying assets it relies on are more transparent and safer. 4. Risk: Squeezed Space for Decentralized Stablecoins Compared with centralized projects like USDC and USDT, decentralized stablecoins (such as DAI, FRAX) face bigger policy risks. Because clearly, the Fed prefers stablecoins it can control. Conclusion On the surface, the minutes were about discussions of rates and inflation, but the real “Easter egg” this time was undoubtedly stablecoins. Imagine: ten years ago, how could Fed minutes ever mention Bitcoin? Twenty years ago, who could have thought “virtual currencies” would become a central bank research topic? Yet today, stablecoins are already written into FOMC’s official documents. This feels like a “historic freeze-frame”: the crypto world is no longer just a marginal player, but is gradually becoming part of the global financial system. So if you are a participant in the crypto market, whether in Bitcoin, Ethereum, or DeFi protocols, remember this set of minutes. Because it is not an isolated document, but the prelude to the trajectory of the crypto market over the next several years.