Hike Fears Return

• Flat week across BTC and equities. BTC open $77.7K, high $81.4K on Thursday, close $77.6K. Flat on the week. ETH lost 1.89% to $2.4K and total market cap held $2.6T. S&P and the Nasdaq barely moved.
• Hike odds reversed. Polymarket went from 30% hike / 70% hold to 52% / 48% on Warsh's Jackson Hole keynote. FedWatch is more decisive at 62.6% / 37.4%. 
• The volatility breakout lasted a week. BVIV fell from 46.5 to 38.9, back to the 7th percentile of the past 12 months, through a hawkish Fed surprise.
• ETFs saw $1.9B of inflows. BTC $924.5M, ETH $815.7M, SOL $142.7M, HYPE $56.8M. August is BTC's best month since October 2025 and its best August on record.

A Round Trip

BTC opened Monday at $77.7K, ran to a high of $81.4K on Thursday, and closed Sunday at $77.6K. Flat on the week. ETH lost 1.89% to $2.4K. Total crypto market cap finished at $2.6T. Last week's leaders dipped as well. XRP gave back 10.72%, HYPE printed a fresh all-time high at $86.73 and still closed down 2.89%. ZEC fell 2.19%. SOL was the only major to hold a gain, up 6.61% to $101 with a high of $110.

Equities barely moved. The S&P 500 added 0.18% to 7,677 and the Nasdaq 100 gained 0.53%. Brent fell 4.36% from $93.68 to $89.59 and gold fell 3.89% to $4,458, the two largest moves of the week across everything we track.

A Key Meeting Defined the Week

Warsh Reprices September

Kevin Warsh's first Jackson Hole keynote as Chair ran half an hour on Friday morning with the markets deciphering his every word. OOn this summer's cooler inflation prints, he said they "do not tell me that underlying trends have meaningfully improved." He again declined to offer explicit guidance, but named PCE as the gauge he will act on, and called current financial conditions not restrictive. Core PCE landed Wednesday at plus 0.2% m/m and 3.3% y/y against 3.2% expected, unchanged from June, with headline at 3.7%. Q2 GDP's second estimate held at 1.5% with consumer spending revised up to 3.4% annualized, which supports the same argument Warsh made about conditions not being restrictive. 

Polymarket's FOMC September market went from 30% hike / 70% hold to 52% / 48%. On FedWatch, the odds are more decisive with a 62.6% hike and 37.4% hold. Yields spiked as crypto, gold and tech stocks fell as expectations of a hike grew.

Schwab Opens the Retail Channel

Schwab said on Thursday it will add SOL, AVAX and LINK to Schwab Crypto in the coming months at 75bp per trade. Schwab Crypto only opened BTC and ETH retail access in May. The firm holds more than $12T of client assets across 39.9M brokerage accounts, which makes this a potentially large distribution channel. Nothing is live yet and no date was given.

CLARITY Hits a New Low

Polymarket odds on CLARITY passing this year fell to 13%, back to the all-time low set after the August recess and half the 28% it spiked to the week prior. Cloture on the motion to proceed is eligible at 2:15pm ET on September 15, the same day the FOMC convenes, and it needs 60 votes.

The blocker is no longer ethics language. The ICBA has been pushing for a total ban on stablecoin yield, citing its own estimate it would move $1.3T of deposits and cut community bank lending by $850B. That campaign already cost the bill two Republican votes in early August. What changed this week is that its CEO ruled out a compromise on Thursday, which closes the negotiated fix the September timeline depends on.

Volatility, Positioning and Leverage

Volatility Metrics

The volatility breakout we saw the week prior was short. After BVIV reached 46.5, it has dropped to 38.9, down 16%, and sits in the 7th percentile of all readings in the last 12 months. 

Liquidations and OI

Aggregate futures open interest is $135B, down 2.3% against last issue's $137.5B. It held flat through the week and has unwound since Sunday's close.

The flush is happening now. 24-hour liquidations are $399.5M, up 521% from a muted Saturday, with $276.4M on the long side against $123.1M short across 98,988 accounts. Coinglass's aggregate long/short ratio is slightly short-tilted at 49.3% / 50.7%. The narrative froth has drained. Funding on trending tokens like ZEC and PUMP has come down to single digits annualized and in some cases flipped negative, meaning shorts are now paying to hold the coins that led the last two weeks.

ETF Flows Continue

BTC and ETH ETFs took $1.74B combined, a second consecutive week above $1.7B. The last back-to-back week of such magnitude was September 29 and October 6, 2025.

BTC: $924.5M. Four inflow days, then $201.9M out on Friday as Warsh spoke, the first outflow session in ten. Cumulative flows since launch stand at $54.70B. August sits at $3.32B, the best month since October 2025 and the best August on record. Year to date now sits at -$1.89B against -$4.74B two weeks ago. Two weeks erased 60% of the year's outflows.

ETH: $815.7M. 13 consecutive sessions of inflows, including $102.1M on Friday while BTC bled. Best week since September 29, 2025. Cumulative net flows hit $12.97B. August sits at $1.75B, the best month since August 2025, and year to date has flipped positive at $623M. ETH had 88% of BTC's inflows while being just roughly 19% of its market cap.

Beyond BTC and ETH, SOL and HYPE ETFs had a breakout week. Solana ETFs saw $142.7M of net inflows, five times the prior week's $28.7M, with five inflow days and $56.1M on August 27 alone. Cumulative net inflows cross $1.3B. HYPE had $56.8M, against $3.8M the week before, for a total of $350M in cumulative net inflows. 

Key Events for the Week Ahead

Tuesday, September 1

• US: ISM Manufacturing, JOLTS for July, construction spending, all 10am ET.
• Europe: August flash CPI.
• China: Caixin manufacturing PMI, 9:45am CST.

Wednesday, September 2

• US: ADP national employment, 8:15am ET.

Thursday, September 3

• US: ISM Services, initial jobless claims pulled forward for the holiday.

Friday, September 4

• US: August nonfarm payrolls, 8:30am ET.