Crypto Market Rallies on Fed Rate Cut Hopes, DeFi Tokens Surge

I. Crypto Market Overview

Key Takeaways

Macro Environment

US CPI rose 2.9% year-on-year in August, reinforcing expectations of a Federal Reserve rate cut next week. The US Dollar Index weakened over 0.3% post-CPI, supporting crypto inflows. South Korea lifted its venture ban on crypto firms, while Hong Kong moved to ease bank crypto rules, signaling growing institutional acceptance.

Crypto Market

The crypto market saw broad gains over the past 12 hours, with BTC up 2.4% to $114,268 and ETH rising 2.9% to $4,426, driven by Fed rate cut expectations and strong DeFi inflows. Altcoins outperformed, led by PENDLE (+7.5%), Arbitrum (+4.0%), and Aerodrome (+3.2%), as DeFi and tokenization narratives gained traction.

Today's Outlook

Key events today include COTI’s participation in ETH Tokyo, gathering major industry players, and Peru’s central bank cutting rates to 4.25% after an inflation drop. These developments may influence regional sentiment and DeFi sector flows.

Fear and Greed Index

94.00% Annual Percentile

47 Neutral

Total Crypto Market Cap

$4.03T

2.17%

Total Market Trading Volume

$156.06B

3.27%

Altcoin Season Index

83.33%

Quarterly Percentile

66 / 100

Total Futures Market Open Interest

3.99B

0.71%

Futures

865.49B

11.25%

Perpetuals

II. Industry Updates

Macro-economic Policies

The US Consumer Price Index (CPI) for August rose 2.9% year-on-year, matching forecasts and reinforcing expectations of a Federal Reserve rate cut next week. This has led to a slight decline in Bitcoin and other major cryptocurrencies, as markets anticipate increased liquidity and risk appetite following a potential 25 basis point cut.

The Producer Price Index (PPI) unexpectedly declined by 0.1% in August, providing further support for a near-term Fed rate cut. Lower producer inflation signals reduced cost pressures, which could encourage the Fed to ease monetary policy, potentially boosting DeFi liquidity and risk asset flows.

The US Dollar Index weakened by over 0.3% after the CPI release, reflecting market confidence in imminent monetary easing. A softer dollar typically supports higher BTC prices and increases capital inflows into crypto assets and NFT markets.

Polymarket prediction markets now price an 87% probability of a 25 basis point Fed rate cut, with analysts also expecting further cuts in October and December. Lower rates are likely to enhance crypto market liquidity and drive speculative activity in both spot and derivatives markets.

US and Japan finance ministers reaffirmed their commitment to non-intervention in exchange rates, emphasizing market-determined FX rates. This stance reduces the risk of sudden currency shocks, supporting global financial stability and indirectly benefiting cross-border crypto flows.

Cryptocurrency Regulatory Trends

The US SEC has postponed decisions on multiple crypto ETFs, including BlackRock's Ethereum staking ETF, now set for review by October 30, reflecting ongoing regulatory caution and impacting investor sentiment.

Hong Kong's Monetary Authority released draft guidelines to ease capital requirements for banks holding cryptocurrencies, aiming to boost institutional participation and reinforce the city’s status as a leading Asian crypto hub.

South Korea has officially lifted a seven-year venture ban on crypto firms, effective September 16, enabling exchanges and brokers to access tax incentives and financing, which is expected to spur innovation and market growth.

India reaffirmed its limited regulatory approach to cryptocurrencies, citing systemic risk concerns and maintaining strict tax and compliance rules, which continues to dampen local market activity and investor confidence.

Chiliz became the first sport-focused blockchain to secure a full MiCA license in the EU, allowing regulated crypto services for over 400 million European sports fans and setting a new compliance benchmark for the industry.

Aerodrome Finance (AERO): AERO surged 12.3% in 24h with $86M volume, driven by rising protocol revenue and increased liquidity on Base, reaching a $1.16B market cap.

PENDLE (PENDLE): PENDLE rose 9.6% in 24h with $143M volume, hitting a new TVL high of $12.2B as Kinetiq Markets surpassed $1B, reflecting strong DeFi demand.

ONDO Finance (ONDO): ONDO climbed 8.3% in 24h with $395M trading volume, boosted by new tokenized US stocks/ETFs on-chain and major partnerships, market cap at $3.48B.

Smart Money Movements

BitMine Immersion Technologies increased its Ether holdings by $200 million, acquiring 46,255 ETH and bringing its total to over 2.1 million ETH valued at $9.2 billion.

A dormant Bitcoin whale address moved 232.16 BTC worth $26.56 million after 13.1 years of inactivity, highlighting significant early holder activity.

A cryptocurrency whale deposited $8 million USDC on HyperLiquid, purchasing 79,257 HYPE tokens for $4.5 million and 466.68 million PUMP tokens for $2.7 million.

Three new wallets acquired 46,347 ETH, valued at $204 million, from FalconX, indicating ongoing institutional accumulation of Ethereum.

BITB and ETHW recorded net inflows of $40.4 million and $19.6 million respectively on September 11, reflecting heightened investor participation.

Events to Watch

Sep 12 (Fri)

COTI will participate in ETH Tokyo from Sep 12-15, gathering key industry players in Tokyo; Peru's Central Bank cuts rates to 4.25% after inflation drop.

Sep 15 (Mon)

Starknet unlocks 127 million tokens at 12 AM UTC; Sei unlocks 55.56 million tokens (1.18% of supply) at 12 PM UTC; Goldcoin DIAMONDS-Gold client beta launches.

Sep 16 (Tue)

Federal Reserve begins two-day policy meeting; US Producer Price Index (PPI) data for August released, providing key inflation insights.

Sep 17 (Wed)

Federal Reserve concludes FOMC meeting, expected to announce interest rate decision and economic projections, impacting global markets.

Sep 18 (Thu)

$ZRO and $KAITO token unlocks exceed $700M; Bank of England holds policy meeting, may adjust quantitative tightening; RUNWAGO token launches with staking and wearable integration.

Table of Contents