Clapp Weekly: Rally on Fed hopes, ETH eyes ATH, Trump's crypto push

BTC price

Bitcoin closed in on its all-time high yesterday as the possibility of a September Fed rate cut worked its way through the market. Analysts note that rising open interest alongside spot and perpetual buying indicates additional fuel for this bull run. Treasuries are also growing: Metaplanet and Smarter Web Company bought 518 BTC and 295 BTC, respectively.

BTC rose from last week's low of $113,470 to $117,596 on Friday, Aug. 8, and resumed its climb on Sunday, Aug. 10. Momentum culminated in yesterday's high of $122,227 — just shy of the ATH — before a retreat.

Currently at $119,655, BTC has gained 0.5% over the past 24 hours with a +5.3% 7-day change.

ETH price

ETH has breached $4.6k, and Polymarket bettors predict $5k before the end of August. Friday's ETF inflows ($460 million) outpaced those for Bitcoin counterparts ($400 million); ETF and treasury-owned ether moved from $24 billion in July to $33 billion (more below).

ETH saw its price grow steadily from $3.5k last Wednesday, Aug. 6, to $4,297.86 on Sunday, Aug. 10, before another leg up this morning. Unlike BTC, it remained calm through the weekend, hovering around $4.25k, until Monday's push higher.

Trading at $4,663.76, ETH is up 8.4% over the past 24 hours and 29.9% over the past week.

Seven-day altcoin dynamics

Dovish comments from Treasury Secretary Scott Bessent have added fuel to a rally triggered by a softer-than-expected July CPI. All major altcoins, including ETH, ADA, SOL, and XRP, moved higher, while BTC inched slightly toward $120k.

Speaking to Fox News, Bessent suggested the Fed should consider cutting its benchmark rate by 50 basis points in September. He also said the regulator could have made the first reduction in June if the data had been accurate, revealing its “foundational issue.”

Previously, the markets fully priced in only a 25-basis-point cut. Though the Treasury Secretary is not a member of the Fed, Trump has tasked Bessent with picking a replacement for Fed Chair Jerome Powell.

The July Consumer Price Index report showed a 2.7% YoY rise in headline inflation — below the projected 2.8%. However, the core reading, excluding volatile food and energy, ticked up to 3.1%, versus expectations of 3%. While mixed, the data is unlikely to diminish the odds of a September Fed rate cut.

Weekly winners & losers

LDO (+69.1%), powering Ethereum’s largest decentralized staking platform, surged after the SEC clarified that liquid staking is exempt from securities laws. The agency’s staff statement triggered a wave of interest in Ethereum-based products and derivatives.

LINK (+50.3%) also rallied, hitting a 7-month high following its new partnership with Intercontinental Exchange (NYSE’s parent company) and the announcement of Chainlink’s Reserve token buyback program. The initiative will convert revenue from ecosystem services and enterprise integrations into LINK, further tightening its supply.

ENA (+40.0%) extended last week’s gains, buoyed by its collaboration with Pendle, which sent the USDe supply soaring to record levels. The partnership introduced a looping strategy: users can purchase Pendle’s PT tokens with Ethena’s USDe to earn fixed yields, then borrow USDC against them via Aave — creating a synergistic demand cycle for both protocols.

On the downside, XMR (-13.1%) faced pressure after Qubic controversially seized over 51% of the network’s hashrate as part of an "experiment," sparking fears of eroded trust in the privacy token. Such hashrate dominance theoretically allows Qubic to reorganize the blockchain, alter transaction history, censor transfers, or even execute double-spend attacks. 

IP (-6.7%) also corrected after its initial rally fueled by Upbit’s listing and Heritage Distilling’s plan to become the first public company with an IP treasury. Meanwhile, XDC (-4.0%) dipped despite two bullish catalysts: network staking surpassing $300 million and the SEC’s explicit "not a security" designation. Its muted price action suggests profit-taking.

Cryptocurrency news

Ether nears all-time high as traders bet big on $5k breakout

Ethereum’s ether is charging toward its all-time high, prompting options traders to bet aggressively on a $5k+ breakout by September. After lagging BTC for months, ETH is finally gaining momentum — and analysts believe this could be just the beginning.

According to Deribit, traders have splurged over $5 million on $5,000-call options expiring September 26 — proof of strong conviction in an imminent surge. Some are even targeting $5,500, $6,000, and $7,500 by year-end via bull call spreads and OTC deals.

Currently trading at roughly $4.6k, ETH has climbed 26% this month, sitting just 4.4% below its 2021 peak of $4,861. Derivatives activity suggests bigger moves ahead.

Why ETH has room to run

Analysts say conditions are right for a potential retest of the level, with strong technical momentum and institutional buying. On Aug. 8, about $460 million flowed into ETH exchange-traded funds (ETFs), eclipsing the $400 million BTC ETF flow. Yesterday's growth to $520 million suggests potential to exceed $2 billion in weekly flows for the first time.

Collectively, ether-linked spot ETFs and corporate ETH treasuries have grown to $33 billion, compared to $24 billion in July. Accumulation continues: on Aug. 12, BlackRock acquired over $12 billion worth of ETH, while Bitmine Immersion is soliciting $20 billion to buy more of it, as per an SEC filing.

Meanwhile, the available supply on exchanges has approached its lowest level since 2016 — another sign of confidence and HODLing behavior.

ATH within reach

After months of consolidation between $2k–$4k, ETH’s breakout could mark the start of a new parabolic phase. With institutional demand rising (thanks to spot ETF inflows) and stakers accumulating supply, the path to $5K looks clearer than ever.

Trump lets crypto into 401(k) plans, bars crypto debanking

Crypto is set to become part of Americans' retirement plans. On Aug. 7, President Donald Trump directed regulators to review rules that currently discourage employers from including crypto, alongside private equity and other alternative assets, in 401(k) plans.

This executive order aims to provide everyday workers with access to investments formerly reserved for high-net-worth individuals and institutions. Meanwhile, digital assets firms can unlock previously untouched pools of funding. The accompanying fact sheet states:

"Alternative assets, such as private equity, real estate, and digital assets, offer competitive returns and diversification benefits."

Trump's move potentially opens the gates for billions of dollars to flow into cryptocurrencies. Retirement plans featuring crypto could help prices while further integrating digital assets with the broader financial system.

The Department of Labor (DOL) has already taken steps in this direction, rescinding 2022 guidance that urged "extreme care" before adding crypto to retirement plans. US Secretary of Labor Lori Chavez-DeRemer praised the shift, stating: 

“The federal government should not be making retirement investment decisions for hardworking Americans, including decisions regarding alternative assets.”

Crypto 401(k) plans raise concerns

Yet not everyone is convinced. Richard Clarke of Colonial Surety Company warns that employers could face major risks: 

“As private assets become prevalent in 401(k)s, plan sponsors face increased administrative burdens... They will need to navigate a market with loose regulations and reporting obligations, leading to reduced transparency.”

Clarke also added that plan sponsors will have to adapt to crypto's growing integration into everyday finance. A lack of transparency, regulatory uncertainty, and potential for cyber hacks underlie significant "fiduciary risks" — and could make these plans more volatile.

Stakes are high

With nearly half of US workers fearing they’ll outlive their savings, some see alternative investments as a chance for higher returns. Yet critics argue that crypto’s volatility and opaque regulations make it a gamble for retirement funds.

For now, employers are in a holding pattern. As Julia Zuckerman of Segal notes, “Plan fiduciaries would decide for themselves whether or not to offer these investments.” With the DOL’s review underway, the debate over risk versus opportunity is far from settled.

Debanking order

Another executive order targets what Trump calls "politicized" bank account closures. It directs federal regulators to crack down on financial institutions that deny services based on politics, religion, or legal businesses.

The White House claims the move will stop "unfair debanking," including in crypto, where companies have faced sudden banking cutoffs. Regulators now have six months to scrub "reputation risk" policies that critics say let banks blacklist customers for ideological reasons.