Bitcoin Flows Rebound as The Fed Prepares First Rate Cut Since 2020

As we turn the page on summer and dive headfirst into a pivotal month for markets, Bitcoin hovers below $60,000, facing an impending rate cut decision from the Fed. We’ll find out Wednesday whether Fed Chair Powell opts for a 50- or 25-basis point cut in rates!

Here are all the top headlines in crypto, discussed per usual, with Archetype partner Dmitriy Berenzon joining our News Recap show today.

Crypto Fund Flows Rebound Amid Fed Rate Cut Speculation

After weeks of choppy action, crypto fund flows are showing signs of life. CoinShares reports $436 million in inflows across all crypto investment products, with the lion’s share directed toward Bitcoin ETFs.

Despite the uncertainty surrounding the Fed’s decision, there's a cautious optimism among crypto traders. Dmitriy highlighted that while it’s been a sideways market for the past quarter, this could mark a turnaround. Investors are increasingly excited about long-term opportunities, as the market searches for signals of a market bottom.

Ethereum Lagging Behind as Solana Gains Institutional Attention

While Bitcoin has shown resilience, Ethereum has continued to struggle, with the ETH/BTC ratio hitting its lowest level since April 2021.

Dmitriy offered an explanation: Ethereum’s scalability roadmap has become a point of concern, and Solana appears to be capturing the attention of institutional investors that once favored ETH. Ethereum’s user experience, particularly across Layer 2s, continues to be an unsolved issue, and this is reflected in the market’s performance. As Solana rises, Ethereum will need to address its core challenges to regain its footing in the market.

Trump Embraces DeFi: World Liberty Financial Launch Set for Tonight

In one of the most unexpected developments this year, former President Donald Trump is officially launching his DeFi project, World Liberty Financial.

Teased as a project aimed at taking on the big banks, Trump and his sons are diving into decentralized finance, with tonight’s 8 PM Twitter Spaces announcement expected to shed more light on their plans. Dmitriy noted the significance of Trump’s involvement in DeFi, regardless of political opinions, as it could push both parties toward more pro-crypto policies. However, the project’s success will hinge on avoiding technical pitfalls, such as security breaches, which have plagued similar projects in the past.

Bernstein Says DeFi Yields Set for a Comeback

Trump is getting into the DeFi space at an interesting time — right as interest rates at banks are set to decline, the excitement around DeFi is picking up steam.

Bernstein’s latest report points to the growing appeal of DeFi yields as interest rates fall. Total value locked in DeFi protocols is climbing once again, signaling that capital is returning to the space. According to Dmitriy, stablecoins and tokenized treasuries are providing yield-bearing opportunities that didn’t exist before, which could fuel further growth in the DeFi sector. This resurgence comes at a pivotal time as traders look to re-enter risk-on assets with the expected rate cuts.

In total, DeFi users are up 4x since January of 2023. Perhaps that trend is only going to continue if Trump’s project provides even more excitement for users.

FTX Founder Sam Bankman-Fried Files Appeal

SBF has finally filed his appeal from behind bars to overturn his fraud conviction via a 102-page filing. SBF’s lawyers are arguing the judge in his case unfairly neutered his defense and blocked him from preventing his side of the facts.

At trial, Judge Kaplan did have SBF present what he was about to say without the jury present and ruled on what he could proceed with before bringing them back into the courtroom. SBF’s side claims that gave prosecutors an unfair advantage in the case and infringed on his rights to a fair trial.

“Fair trial principles were swept away in a ‘Sentence first-verdict afterwards’ tsunami, as everyone rushed to judgment following FTX’s collapse,” wrote SBF’s lawyer Alexandra Shapiro, who joined the defense team after his conviction. “Sam Bankman-Fried was never presumed innocent. He was presumed guilty — before he was even charged.”

Of course, Coinage already dug into SBF’s complete defense with the help of Bernie Madoff’s former prosecutor for our exclusive 4-part series.

Other Web3 Headlines:

• 'An Explosion of Election Gambling' Is Nigh, CFTC Warns Appeals Court

• Sen. Elizabeth Warren's Pro-Crypto Opponent, John Deaton, Has a Plan to Beat Her

• Former Celsius CEO Mashinsky Seeks Testimony From Six Witnesses as He Faces 115-year prison Sentence

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