US Equities Closed at Record Highs While Bitcoin Fell Below $63,000

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In Today's Note

• The S&P 500 closed at a record, up 0.65%, and the Nasdaq-100 rose 1.15% after July producer prices slowed to 4.7% YoY from 5.5% and came in flat on the month against a 0.2% forecast. BTC did not follow, sliding from $65K to below $63K over the week as September hike odds fell to 33%.
• A Washington court ordered Kalshi to stop offering most prediction markets in the state by 2 September, and Baltimore sued both Kalshi and Polymarket over sports contracts, naming Coinbase, Robinhood and Webull as distributors.

Market Snapshot: Overnight Moves

Macro & Markets

• US equities closed at record highs amidst a drop in bond yields after more evidence that inflation in the US was moderating.
• Back-to-back gains in the S&P 500 pushed the index to a new high as it closed the day up 0.65%. The tech-heavy Nasdaq-100 rallied 1.15% and the closely watched Philadelphia Semiconductor Sector index ended Thursday’s session modestly higher.
• As we’ve seen through the week, BTC was less reluctant to take part in the rally, and over the past week has slowly traded lower, from $65K down below $63K.
• Meanwhile, the market-implied probability for a September rate hike by the Fed fell further, with traders now pricing in only a 33% chance for a 25bps increase.

• Wholesale inflation in the US decelerated in July by more than estimated as energy, food and goods prices all fell. The producer price index rose 4.7% in the twelve months through July, down from a 5.5% annual increase in June. On a month-over-month basis, the PPI was flat at 0% against forecasts for a 0.2% MoM rebound.

• Speaking at an event yesterday, Richmond Fed president Tom Barkin said that it is still unclear whether the Fed will need to raise interest rates to tame above target inflation. In remarks prepared for delivery to the Greenville Chamber of Commerce, Barkin said, the FOMC is committed to reaching 2% inflation, but “The open question is how it gets there. Will the Fed need to raise rates or is inflation already on a path down to target?"
• He argued that "much of today's elevated inflation level has come from shocks, which should pass," such as higher tariffs and oil prices, as well as surging demand and prices for the supplies needed in the artificial intelligence buildout, a boom that "should ease at some point."
• As those pressures ease, "the current level of interest rates, many think, is still restrictive enough to bring inflation down," Barkin claimed.

• His more hawkish counterpart on the other hand, Cleveland President Beth Hammack, reiterated her view that the committee should raise rates immediately. Speaking at an event in Ohio she said, "When I'm talking to businesses, I hear that businesses are excited to raise funds, they're excited to borrow so they can continue to invest. They see the growth opportunities, which is great; I want them to continue to see growth opportunities, but if we have too much of that growth.... it could mean that that's putting additional pressure on price increases and that puts more of that inflationary pressure out there”.
• As such, “We need to make sure that we've got some amount of restraint coming from policy so that we can get inflation from this above-3% number back down to that 2% objective."

• On the geopolitical front, Treasury Secretary Scott Bessent said the US will shortly announce an unprecedented update to its economic measures against Iran, as part of ongoing efforts to force Tehran into capitulation through financial pressure.
• In an interview with Newsmax yesterday Bessent claimed, "Watch this space for more announcements coming next week because we are going to apply measures like have never been seen in the history of economic isolation on a country".
• The measures will be part of a "one-two punch" that includes the continued blockade of Iran's ports.
• Vice President JD Vance added that the top priority now for the US in the war against Iran is no longer Tehran’s nuclear program, but to bring gasoline prices down for American consumers.
• Speaking on Fox News, Vance said preventing Iran from obtaining a nuclear weapon, which President Trump had continually touted as his main reason for the war, is now taking a back seat to getting oil flowing again freely through the strait, "I know that oil is down today and it's way down from the highs in the early days of the conflict. That's goal number one, keep oil and gas cheap for Americans all over our country … And then obviously goal number two is ensure that Iran never gets a nuclear weapon".

DeFi / Web3 / Altcoins / Crypto3

• Bitwise Asset Management has partnered with Superstate to explore tokenizing shares of selected investment funds, with the Bitwise Solana Staking ETF (BSOL) expected to be the first candidate.
• Under the proposed structure, investors could hold fund shares either through the traditional Depository Trust Company system or as blockchain-recorded shares managed through Superstate’s transfer-agent infrastructure.
• The tokenized shares would carry the same investor rights as traditional shares, with blockchain used solely as an alternative method of recording ownership.
• Bitwise stressed that the initiative remains exploratory and there is no guarantee a tokenized version of BSOL will launch.

• A Washington court has ordered Kalshi to stop offering most prediction markets in the state, including contracts tied to sports, elections, politics, entertainment, culture, technology, science and “mentions,”which are markets based on whether specific words, phrases or topics are referenced during an event.
• Kalshi must introduce IP and residency-based restrictions and implement a broader geofencing system by Sept. 2 to block Washington users from accessing the affected markets.
• The company is also prohibited from advertising the restricted contracts to residents of the state.
• Markets linked to commodities, climate, economics and finance can continue operating in Washington.

• Baltimore has sued Kalshi and Polymarket, alleging that their sports-event contracts amount to unlicensed gambling and violate the city’s consumer protection rules.
• The Kalshi lawsuit also names Coinbase, Robinhood and Webull, which distribute Kalshi contracts through their own platforms.
• Baltimore argues that products such as game-winner, point-spread and player-performance markets resemble traditional sportsbook wagers while avoiding state licensing and oversight.
• The city is seeking financial penalties, customer restitution and an injunction blocking unauthorized sports betting.
• Kalshi says it operates under federal regulation and plans to contest the claims, while Polymarket had not immediately commented.

• Ether.fi has expanded its non-custodial neobank app with tokenized stock and metals trading, portfolio-backed borrowing through Aave, and broader fiat payment options.
• The “Summer” upgrade lets users hold tokenized equities, commodities and crypto in self-custodial vaults, while borrowing against their portfolio at DeFi rates to fund card spending or transfers.
• Ether.fi has also added support for more than 30 currencies and payment methods, alongside 3% cashback on eligible card purchases.

• Figure Technology Solutions reported a sharp rise in second-quarter earnings, with net income increasing 192% year-over-year to $87M as activity across its lending marketplace accelerated.
• Consumer Loan Marketplace volume climbed 132% to $4.3B, including $2.8B processed through Figure Connect, its blockchain-based marketplace linking loan originators with institutional investors. Net revenue also more than doubled to $226M.
• Figure added more than 100 loan-origination partners during the quarter and is preparing to expand further through its pending $717M acquisition of real estate lender Kiavi.

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