The Great Crypto Collapse: Bitcoin’s Fall and the Fed’s Fumbles!

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Greetings, weary traveler, to the Asia Pacific Morning Brief—a jumbled mosaic of financial despair and fleeting hope, curated by none other than Paul Kim. Grab your green tea, for you’ll need all the caffeine your trembling hands can handle. 🍵

Ah, August—a month of sweltering heat and equally scorching losses in the crypto world. Last week, Bitcoin, that digital golden calf, stumbled mightily, breaking free from its $117,000–$120,000 comfort zone. A 4% weekly drop? Mere child’s play. Some altcoins plunged over 15%, as if competing in a race to the bottom. 🏎️

First Came Powell, Then the NFP

Last week’s descent was a two-act tragedy. Act One starred Federal Reserve Chair Jerome Powell, who, after the July FOMC meeting, crushed dreams of a September rate cut faster than a boot on a cockroach. Powell, ever the optimist, acknowledged whispers of a recession but insisted on holding rates steady. After all, why act when tariffs and inflation are still playing a rousing game of Schrödinger’s cat? 🐱

Powell did manage to highlight the labor market’s “solid” state, a claim as reliable as a politician’s promise. But Fed Governor Christopher Waller wasn’t buying it, pointing out the private sector’s slowing employment growth. Despite Powell’s majority-backed stance, Bitcoin prices plummeted to $115,800, as if mocking his optimism. 🙃

Bitcoin’s Weekly Decline

Act Two arrived with the nonfarm payroll (NFP) data, a cruel reminder that reality often bites harder than fiction. Wall Street analysts predicted 110,000 new jobs in July, but the actual figure was a paltry 73,000. To add insult to injury, May and June data were revised downward by 258,000 jobs. June’s initial NFP figure of 147,000? A statistical mirage, revised to a laughable 14,000. 🤡

The official unemployment rate held steady at 4.2%, but the broader U-6 rate hit 7.9%, the highest since COVID-19. Long-term unemployment worsened, and the US stock market took a nosedive. Bitcoin, ever the obedient follower, retreated to $112,000. 📉

Macro Meltdown: Corporate Buying and ETFs Take a Hit

The crypto industry, once buoyed by corporate buying and ETF inflows, found itself dragged down by macroeconomic woes. July’s ETF-driven momentum vanished faster than a magician’s rabbit. August 1 saw the biggest single-day ETF outflow since February. Ethereum-buying companies, once the market’s darlings, stumbled like drunkards at a marathon.

Sharplink Gaming, for instance, boldly announced a $296 million Ethereum purchase, only to see its stock plummet by 30.80%. Bitmine, led by CEO Tom Lee, claimed Ethereum’s intrinsic value was $60,000, a figure as believable as a unicorn sighting. 🦄 Standard Chartered Bank noted Ethereum’s strategic accumulation had surged $10 billion in four months, but even this couldn’t stem the tide of decline.

Crypto influencer Arthur Hayes, founder of BitMEX, predicted Bitcoin could drop to $100,000 and Ethereum to $3,000, citing US tariffs and sluggish global credit expansion. Meanwhile, Ethereum’s holder accumulation ratio hit a two-month low, signaling investor apathy. 😴

The US Stock Market: The Decider of Crypto’s Fate

July’s warmth vanished faster than a snowball in hell. This week’s crypto prices hinge on the US stock market’s ability to recover from the NFP shock. Last year, the US Employment Statistics Bureau revised annual nonfarm payroll data by over 800,000 jobs, revealing jobs that never existed. Yet, the stock market shrugged it off like a minor inconvenience.

Last Friday’s drop was partly due to the market hitting new highs smoothly, with weakening employment figures providing a convenient excuse for correction. If the US stock market recovers, crypto may follow suit. If not, Powell’s denial of a September rate cut will loom large, with CME Group’s FedWatch tool already forecasting three rate cuts this year. 🕰️

No major macroeconomic events are expected this week, but US employment remains a critical focus. The Conference Board’s Employment Trends Index, released Monday, could sway US stock markets—and, by extension, the cryptoverse. 🎢

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2025-08-04 03:51