Markets Digest Fed Action

Find out our latest reports in partnership with Bybit, listed below:

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• Bybit x Block Scholes Quarterly Report: What will drive crypto in Q3 2025?‍
• Bybit x Block Scholes July Volatility Review‍
• ‍Bybit x Block Scholes Quarterly Report: Altcoin season and the evolving role of Bitcoin

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Daily Updates:

• The week ahead on Wall Street is set to be busy, with markets reflecting the Federal Reserve’s fifirst-rateut since December 2024.  The spotlight now turns to Fed communication, with newly appointed Governor Stephen Miran speaking Monday and Chair Jerome Powell on Tuesday. Markets will be assessing how policymakers frame the path ahead following last week’s move.

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• The week’s most closely watched release comes Friday, when the core PCE index is expected to show a 0.3% monthly increase and a 2.9% annual pace—still above the Fed’s 2% goal. The University of Michigan’s consumer sentiment survey and fresh mortgage rate data, with borrowing costs near one-year lows, will provide additional context on household conditions.

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• As of Monday morning, the cryptocurrency market is experiencing a notable downturn.
• BTC has fallen to $112.4K, down approximately 2.35% in the past 24h. ETH is trading at $4.1K, reflecting a 6% decrease.  
• XRP has declined to $2.8. A 5.4% drop, while SOL is at $220, down almost 7%.
• Bitcoin had risen to nearly $118,000 earlier in the week after the Federal Reserve cut rates by 25 basis points, but that rally faded some days later after the announcement.

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• Short-dated volatility rallied once again, pushing ETH one-week IV to a high of 67% and BTC to 33%. Despite the inversion in ETH’s term structure (as one-week tenor at-the-money implied volatility traded above the level of longer-dated tenors), BTC’s remained flat in a repeat of the pattern that we have seen in each ETH inversion since Q1 2025.
• The sudden move lower overnight has taken BTC put-call skew back to Friday’s bearish levels (now 5% in favour of puts at a one week tenor) – it’s taken ETH skew even further into bearish territory (a skew of 6.5% towards puts at a one week tenor).
• The newly bearish sentiment has impacted funding rates, with a premium now paid by short positions. This is in contrast to the consistent bearish positioning in options markets last week, which had not been matched by similarly bearish positioning in perpetual swap positions.

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• European Union finance ministers have a preliminary agreement on Friday on a framework for the digital euro, the bloc’s proposed central bank digital currency (CBDC). The roadmap outlines how a digital euro could coexist with commercial bank money and provides ministers with oversight over whether issuance occurs and limits on individual holdings to reduce risks such as bank runs.
• The agreement, reached in Copenhagen alongside European Central Bank (ECB) President Christine Lagarde and European Commissioner Valdis Dombrovskis, positions the digital euro as both a payment instrument and a strategic initiative to strengthen Europe’s financial sovereignty, providing a European-controlled alternative to U.S.-dominated payment networks. Lagarde emphasized that the project aims to support secure, cross-border payments using European infrastructure.
• Despite the agreement, full implementation is expected to take years. The European Parliament must approve enabling legislation, potentially by mid-2026, after which the ECB estimates it could take up to three years to begin issuing the digital euro.

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• Grayscale filed a revised S-1 on Friday with the U.S. Securities and Exchange Commission (SEC) as it seeks to convert its closed-end Dogecoin trust into a full-fledged exchange-traded fund (ETF). If approved, the ETF would trade on NYSE Arca under the ticker GDOG, with Coinbase serving as the prime broker and custodian.
• The filing comes just days after the SEC finalized new standards for listing crypto funds, aimed at simplifying the approval process and reducing regulatory friction.

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• Crypto custodian BitGo has filed for an initial public offering (IPO) in the United States, aiming for a listing on the New York Stock Exchange.
• BitGo reported strong revenue growth in the first half of 2025, reaching $4.2B, nearly four times the $1.1B recorded in the same period last year. Net income, however, fell to $12.6M, down from $30.9M.
• Importantly, under the IPO structure, co-founder and CEO Mike Belshe will retain majority voting control through a dual-class stock arrangement, making BitGo a “controlled company” under NYSE rules. The filing notes that the company does not currently plan to rely on governance exemptions associated with this status but reserves the option to do so in the future.

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• MetaMask’s newly launched stablecoin, mUSD, has quickly expanded its circulating supply to $65M just one week after launch, up from approximately $15M at launch.
• Most of the mUSD supply is currently on Linea (88.2%), with the remainder on Ethereum (11.8%), according to Dune analytics data compiled by Seoul Data Labs.

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• Japanese bitcoin treasury firm Metaplanet announced on Monday that it acquired 5,419 BTC for approximately $632.5M, marking the company’s largest single bitcoin purchase to date. The acquisition was made at an average price of around $116,724 per BTC, according to the CEO Simon Gerovich.
• With this purchase, Metaplanet’s total bitcoin holdings now reach 25,555 BTC, accumulated at an average cost of roughly $106,065 per bitcoin.
• According to The Block's data dashboard, this likely elevates the company into the ranks of the top five publicly disclosed corporate holders of bitcoin, surpassing Bullish and trailing only Strategy, Mara, XXI, and Bitcoin Standard Treasury Company.

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• Blockchain platform Kaia and LINE NEXT, the Web3 division of messaging giant LINE, announced plans to launch Project Unify, a stablecoin superapp, later this year on LINE’s Dapp Portal. The app is designed to integrate payments, remittances, and on- and off-ramps into a single user interface, streamlining the use of stablecoins for consumers and businesses alike.
• Project Unify will allow users to deposit stablecoins and earn real-time incentives, transfer funds through messages, and make both online and in-store payments with spending rewards.

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This Week’s Calendar:

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Charts of the Day:

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