RISE AND SHINE, ASIA PACIFIC!
Paul Kim here, fueling your Monday with the Asia Pacific Morning Brief. Skip the snooze button and dive into the crypto currents shaping our markets and influencing the world. Green tea’s brewing – let’s get started.
August arrived with a crypto cold snap. Bitcoin, after a period of relative calm between $117,000 and $120,000 since July 11th, stumbled hard last week. A nearly 4% drop shook the leading cryptocurrency, but the real carnage was in altcoins, some of which plummeted by a staggering 15% or more. The question now: Is this a mere summer squall, or the beginning of a deeper, more prolonged downturn?
First by Powell, Second by NFP
Last week’s market dip played out in two acts. The first act starred Fed Chair Jerome Powell, fresh off Wednesday’s FOMC meeting. The audience expected a September rate cut, a sweet encore after July’s pause. But Powell took the stage and dashed those hopes with a splash of icy water.
September rate cut? Don’t bet the farm on it. Powell’s playing it cool, acknowledging recession whispers while keeping rates steady. His reasoning? Those tariff-fueled inflation fears are still just smoke, not fire. We’re in wait-and-see mode.
He stressed that the robust labor market, nearing equilibrium, allows for a sharper focus: shifting the primary concern from securing jobs to aggressively combating inflation’s looming threat.
Behind the Fed’s confident facade, a battle rages. While some cheer a robust economy, voices of dissent cry foul. Governor Christopher Waller, a prominent skeptic, points to the chilling truth hidden beneath the headlines: private sector job creation is sputtering. But the real kicker? Retrospective data revisions paint a far bleaker picture than initially perceived – whispering warnings that preemptive rate cuts might be the only way to avert disaster.
Powell’s words have poured cold water on hopes for a September rate cut, a sentiment echoed by the Fed’s dominant voices. Bitcoin, sensitive to such shifts, reacted swiftly, plummeting to $115,800.
Bitcoin Price. Source: CoinMarketCap
July’s jobs report landed with a thud, defying Wall Street’s forecasts and casting a shadow on Powell’s sunny economic forecast. Economists braced for a modest 110,000 new jobs, but the economy coughed up a meager 73,000. This isn’t just a miss; it’s a stark warning signal suggesting the US labor market may be losing steam.
The rosy picture of the job market just got a harsh reality check. That impressive headline of 147,000 jobs added in June? Turns out, it was mostly smoke and mirrors. A staggering 258,000-job revision for May and June by the US Bureau of Labor Statistics reveals a far grimmer truth. June’s initial boom deflated to a mere 14,000, while May limped in at 19,000 numbers we haven’t seen this low in half a decade.
The headline unemployment figure might have held steady at 4.2%, but lurking beneath the surface, a darker truth emerged: the U-6 unemployment rate surged to a chilling 7.9% – a level unseen since the pandemic’s darkest days. The ranks of the long-term unemployed swelled, a stark testament to the economy’s ailing pulse. This grim reality check sent tremors through Wall Street, triggering a stock market rout. Even Bitcoin, once a beacon of stability, succumbed to the fear, plummeting to around $112,000. The numbers paint a clear picture: economic storm clouds are gathering.
Macro Downturn Drags Corporate Buying and ETFs, Which Once Led the Rise
The crypto market spent the week riding a macroeconomic rollercoaster. The once-powerful tailwind of spot Bitcoin and Ethereum ETF inflows, the very force that propelled prices skyward in July, fizzled out after July 30th. The shift culminated on August 1st with a dramatic exodus: spot ETFs saw their worst single-day outflow since winter’s chill.
Ethereum’s ascent hit turbulence. The very giants fueling its price surge stumbled. Early in the week, Sharplink Gaming roared with a $296 million Ethereum acquisition and staking pledge, painting a bullish picture. Bitmine’s Tom Lee then boldly declared Ethereum’s true worth at a staggering $60,000. Yet, the initial optimism proved fragile.
Ethereum’s Corporate Gold Rush: Standard Chartered predicts companies will hoard 10% of all ETH. Corporate Ethereum wallets are exploding, amassing over $10 billion – a jaw-dropping 50x surge in just four months, signaling a strategic land grab.
But the crypto market’s rug pull arrived swiftly. All bullish momentum evaporated as Ethereum plummeted 7.2%, leaving even the strongest firms reeling. Sharplink Gaming, a top Ethereum holder, saw its stock price slashed by a staggering 30.80%, while Bitmine suffered a brutal 23.16% hit, painting a stark picture of the week’s carnage.
As storm clouds gathered, a chilling wind of bearish sentiment swept through the crypto markets. Arthur Hayes, the once-celebrated founder of BitMEX, emerged as its harbinger. His grim forecast: Bitcoin plummeting to a gut-wrenching $100,000, Ethereum collapsing to a mere $3,000. The culprits? Hayes pointed to looming US tariff legislation and the agonizingly slow drip of global credit, painting a stark picture of potential devastation.
Ethereum’s weekend took a turn as on-chain whispers revealed a chilling statistic: the ETH accumulation rate plunged to a two-month low of 27.57%. Has the feeding frenzy ended? Are investors losing their appetite for the world’s second-largest cryptocurrency? The data suggests a chilling pause in the aggressive accumulation of ETH, leaving analysts questioning the market’s next move.
US Stock Market Is the Key
July’s crypto surge evaporated in a flash. Now, all eyes are on Wall Street: can stocks shake off the NFP data tremors and bounce back? Crypto’s fate this week hangs in the balance.
Last year’s jobs boom? Turns out, phantom jobs haunted the US economy. The Employment Statistics Bureau confessed to overstating annual nonfarm payrolls by a staggering 800,000 – jobs that vanished upon closer inspection. A ghost workforce, debunked. Yet, Wall Street shrugged. Did the market even notice this substantial statistical correction?
Friday’s market plunge? Blame gravity and a sky-high US stock market ripe for a fall. Weak jobs data simply greased the skids, turning a gentle ascent into a screaming descent. Now, all eyes are on Wall Street: if bulls can regain their footing without another stumble, crypto could catch a ride on the rebound.
Powell’s repeated recalibrations risk cementing his earlier denial of a September rate cut, even as US job numbers surge. The market’s already bracing for action, with the CME Group’s FedWatch tool predicting three cuts this year. Will the Fed pivot, or hold firm against the tide?
Silence before the storm? This week offers a momentary lull on the macroeconomic front, but don’t be fooled. All eyes are glued to the US employment picture. Monday’s release of the Conference Board’s Employment Trends Index isn’t just another data point – it’s a potential market-mover that could send shockwaves through Wall Street. Watch closely.
We wish our readers successful investments this week as well.
Thanks for reading The “Gap” in US Employment Data Triggers a Decline Is Bitcoin Poised for Recovery?
