Market Update (August 2025)
This report provides an overview of market updates in August, new developments, and our latest market outlook.
Executive Summary
- Overall Market Performance: August featured mixed economic signals with equity markets near record highs amid persistent inflation; ETH surged 18% to a new all-time high above $4,900, while BTC peaked at $124,000 but declined -7.7% monthly.
- G20 Macro Environment: Economies showed resilience with divergent central bank policies. The Fed is expected to cut rates, while the ECB is cautious; trade tensions from US tariffs persisted but eased via agreements, boosting the 2025 global growth forecast to 3.0%; downside risks include inflation and geopolitics.
- Crypto Market Dynamics: DeFi sectors varied, with Oracles leading growth via US government partnerships for on-chain data; ETH ETFs drew $3.8B in net inflows and +34.9% AUM growth, contrasting BTC ETFs' $749M outflows; institutional ETH adoption rose, and public firms now hold over one million BTC.
- Crypto Regulatory Developments: US explored crypto in 401(k)s, clarified non-security staking, and pushed BTC reserves; China eyed yuan stablecoins; EU imposed high risk weights on unbacked crypto; Japan neared yen stablecoin approvals and tax reforms; UK lifted cETN retail ban; Brazil and Indonesia considered BTC reserves; UAE unified frameworks.
- Equity Market Trends: US indices rose (S&P 500 +1.91%, Dow +3.20%), driven by tech giants, Fed cut expectations, trade optimism, and economic resilience; Europe was mixed amid political volatility in France and ECB’s pause; Asia diverged, with China leading via AI/semiconductor gains, Japan remaining steady, and South Korea being pressured by trade restrictions.
- New Developments in Crypto and TradFi: Trump Media Group and Crypto.com announced a $6.4B Cronos (CRO) treasury and partnership; Crypto.com expanded custody for staked assets VeChain, VivoPower, and Aditxt; Crypto.com integrated Plaid for tax-efficient transfers; Ray Dalio warned of US debt cycle boosting BTC and gold demand; Allianz recognised BTC as a credible store of value.
- Outlook on Key Projects and Tokens: Cronos’s roadmap targets DeFi maturity and retail adoption via Crypto.com; BTC faces potential September weakness, but upside from Fed cuts; ETH proposes unified fee market (EIP-7999); Synthetix shifts to Ethereum Mainnet for perpetuals and launches an SLP vault.
1. Overview
August concluded with mixed economic signals: while equity markets remained near record levels, concerns about labor market softening and inflation persistence continued to influence investor sentiment and Fed policy expectations. Both traditional and crypto markets ended August positioned for potential Federal Reserve policy changes, with September rate cut expectations at elevated levels and continued institutional adoption driving crypto market growth.
In August, ETH kept the strong momentum with a new all-time high above $4,900 and significant monthly growth of 18%, while BTC hit a new all-time high above $124,000 on August 14th before experiencing significant volatility. August 2025 was also a strong month for the US equity markets despite significant volatility. S&P 500, Dow Jones and NASDAQ Composite indices achieved their fourth or fifth consecutive months of gains, marking their strongest performance in about a year.
Assets | Aug | Q1 | Q2 | H1 | YTD |
BTC | -7.7% | -11.9% | 28.4% | 15.9% | 16.3% |
ETH | 14.9% | -45.9% | 12.0% | -25.0% | 31.1% |
S&P 500 | 1.9% | -4.4% | 6.1% | 5.7% | 10.1% |
Dow Jones Industrial Average | 3.2% | -0.9% | 2.1% | 4.0% | 7.4% |
NASDAQ Composite | 1.6% | -10.3% | 11.0% | 5.6% | 11.3% |
MSCI All Country World | 2.7% | -0.8% | 7.6% | 9.7% | 13.8% |
Gold | 5.0% | 17.4% | 14.3% | 24.2% | 29.6% |
S&P REIT Index | 4.4% | 1.4% | -5.9% | -0.3% | 3.2% |
Invesco DB Commodity Index | -1.1% | 4.2% | -0.2% | 1.0% | 2.9% |
Core US Aggregate Bond ETF | 0.9% | 2.1% | 0.0% | 2.4% | 2.6% |
1.1 Macro of the G20 Economies
August 2025 showcased a mixed but generally resilient performance across G20 economies, with major central banks navigating divergent inflation trajectories while global trade tensions and geopolitical uncertainties continued to shape policy responses.
Inflation and Monetary Policy
The month was characterized by central bank divergence: while the Fed signaled aggressive easing amid growth concerns, the ECB adopted a more cautious stance with inflation near target. Emerging market central banks faced varied pressures, with India maintaining stability, Brazil remaining restrictive, and Turkey continuing rapid easing despite elevated inflation.
Trade and External Pressures
Trade tensions remained elevated following Trump's implementation of "reciprocal" tariffs, including 50% tariffs on India and Brazil. However, recent trade agreements reduced some uncertainty, allowing several economies to upgrade growth forecasts.
Outlook
Global growth projections for 2025 were revised upward to 3.0% from the IMF's April forecast, reflecting front-loading ahead of tariffs, better financial conditions, and fiscal expansion in major economies. However, inflation persistence in several major economies and ongoing geopolitical tensions continue to pose downside risks to the global outlook.
1.2 Crypto Market
DeFi categories had mixed performances in August, with Oracles leading the market cap growth, driven by Chainlink and Pyth Network as they partnered with the US government to publish economic data on-chain.
Liquid Staking and Lending categories also garnered significant attention, experiencing impressive market capitalisation (MC) growth and robust trading activity relative to their MC, typically seen as a direct beta play to ETH.
In August, US spot ETH ETFs continued to see strong engagement, while BTC ETFs underperformed, underscoring a notable shift in investor preference towards ETH.
The US spot BTC ETFs saw net outflow of $749 million after the four strike months inflows.
In August, spot ETH ETFs maintained the strong performance by attracting over $3.8 billion in net inflows, marking the net inflow surpassing a quarter of the BTC counterparts. Additionally, the assets under management (AUM) of the ETH ETFs surged by 34.9% in August, while the AUM of BTC ETFs dropped by 4.2%.
The surge in ETH demand stemmed from growing institutional adoption, the appeal of staking yields, and a wave of companies adding ETH to their reserves — a phenomenon seen as a ‘productive capital’ evolution for corporate treasuries. As of writing, 18 public companies accumulated 3.7 million ETH, accounting for 3% of the total ETH supply. Additionally, over 1 million BTC were reserved by the publicly listed organisations, accounting for 4.77% of the total BTC supply.
1.3 Crypto Regulation Updates
Country | Crypto Regulatory Updates |
United States | • The US SEC’s Crypto Task Force announced a ten‑city roundtable series to engage industry stakeholders, developers, and investors on crypto regulation. The roundtable discussions will take place between August and December. • US President Trump signed an executive order directing the Labour Department to look into possible rule changes that would allow alternative assets, including crypto, in US 401(k) retirement plans. The order also seeks to allow private equity and other alternative assets. • The US SEC clarified that certain liquid staking activities do not qualify as securities. This applies when digital assets are staked through a protocol and a staker receives a receipt token representing their stake. • The White House proposed a draft executive order to protect crypto businesses from potential discriminatory banking practices. As part of this, banking regulators will investigate violations based on the Equal Credit Opportunity Act, antitrust laws, or consumer financial protection laws. • The Commodity Futures Trading Commission (CFTC) is exploring the possibility of allowing spot crypto trading, including BTC, on registered futures exchanges. This is in coordination with the SEC’s Project Crypto to deepen collaboration and enhance regulatory clarity. • US Treasury Secretary Scott Bessent clarified that the department is committed to exploring budget-neutral ways to acquire more BTC. This came after his comments in an earlier interview that was interpreted to mean the Treasury has no intention to buy additional BTC. • The US Commodity Futures Trading Commission (CFTC) launched its second ‘Crypto Sprint’ initiative, seeking public input on spot crypto market regulation. The move aligns with recommendations from the President’s Working Group on Digital Asset Markets to advance the administration’s crypto agenda. • The US House inserted a ban on a Federal Reserve central bank digital currency into its defense policy bill for the 2026 fiscal year. In July, it passed a similar bill, the Anti-CBDC Surveillance State Act, which was passed to the Senate. • The US Commodity Futures Trading Commission (CFTC) signalled a pathway for US-based clients to access offshore crypto exchanges under the Foreign Board of Trade (FBOT) framework. This is part of CFTC’s “crypto sprint” to change its crypto policies. |
China | • China is reportedly weighing the launch of yuan-backed stablecoins to promote global use of its currency, including catching up with the US’s push on stablecoins. The State Council may review and approve a roadmap later this month. • The Hong Kong Securities and Futures Commission (SFC) introduced new crypto custody rules with security requirements and banned smart contracts in cold wallets. The framework mandates hardware security modules, whitelisted withdrawals, and a 24/7 security operations centre for monitoring. |
European Union | • The European Banking Authority finalised draft rules proposing a 1,250% risk weight for European Union (EU)-based banks holding “unbacked” cryptocurrencies such as BTC. The measure is intended to standardise capital requirements across the EU. • The European Central Bank is reportedly considering building the digital euro on a public blockchain, such as Ethereum or Solana, shifting away from private networks. |
Japan | • Japan’s Financial Services Agency (FSA) is set to approve yen-denominated stablecoins as early as this fall. Fintech firm JPYC is expected to lead the rollout, and the stablecoins will be backed by liquid assets, such as bank deposits and Japanese government bonds. • Japan's Financial Services Agency (FSA) is considering a flat 20% tax on crypto trading profits as part of broader tax reforms, down from the current progressive tax rate of up to 55%. The change could make it easier for the launch of domestic crypto ETFs. |
United Kingdom | • The UK’s Financial Conduct Authority (FCA) lifted its ban on retail access to crypto exchange-traded notes (cETN). This move reopens the cETN market to retail investors, starting on 8 October. |
Brazil | • Brazil’s House of Representatives will hold a hearing on 20 August for a proposed bill to create a national bitcoin reserve, potentially allocating up to 5% of its treasury (around $15 billion) to purchase BTC. This aims to guard against currency fluctuations and geopolitical risks, while promoting blockchain adoption. |
Indonesia | • Indonesia is exploring bitcoin as a reserve asset, according to Bitcoin Indonesia, which recently presented how bitcoin can benefit the country’s long-term economic strength to the Vice President’s office. |
UAE | • The UAE’s Securities and Commodities Authority (SCA) and Dubai’s Virtual Assets Regulatory Authority (VARA) announced a partnership to unify the crypto regulatory framework. This includes allowing Dubai-based licences to provide services to the UAE. |
1.4 Equity Market
The US stock market saw robust gains in August 2025, with major indices—especially the S&P 500 and Nasdaq—reaching new highs. Market momentum was driven by positive corporate earnings, renewed trade optimism, continued strength in technology stocks, and anticipation of Federal Reserve policy shifts.
S&P 500 | +1.91% |
Dow Jones | +3.20% |
NASDAQ Composite | +1.58% |
Key Drivers of US Stock Market include:
- Mega-Cap Technology Leadership: Most market gains came from large technology and AI companies (Nvidia, Amazon, Apple, Microsoft), which delivered standout earnings and pushed indices higher.
- Fed Rate Cut Expectations: Dovish signals from Fed Chair Powell’s Jackson Hole speech boosted sentiment, with investors pricing in a September rate cut.
- Improving Trade Policy: Restoration of trade talks and suspension of new tariffs supported investor confidence, triggering a sharp rebound from spring lows.
- Resilient US Economy: Labor market stability and continued consumer spending helped fuel corporate growth, even as unemployment ticked slightly higher.
- Weaker US Dollar: Dollar weakness attracted global capital inflows and supported US exports, adding to market gains.
- Sector Rotation: Sector rotation favored materials (+5.6%, the best-performing sector in August), while utilities lagged (-2.03%, the worst-performing sector for the month). Nine of 11 S&P sectors rose; investors modestly shifted to value and defensives, but tech remained dominant.
Europe
European equity markets delivered mixed but ultimately positive performance in August 2025, with the STOXX Europe 600 gaining 0.74% and outperforming other major indices in the region. However, significant divergence emerged across countries, with French political uncertainty creating the month's most impactful market-moving event.
Europe | EURO STOXX 50 | +0.60% |
Europe | STOOX Europe 600 | +0.74% |
UK | FTSE | +0.60% |
Germany | DAX | -0.68% |
France | CAC | -0.88% |
Primary Market Drivers:
The dominant theme driving European markets in August was French political instability. Prime Minister François Bayrou's announcement of a confidence vote scheduled for September 8, following his inability to secure support for €44 billion in budget cuts, created substantial market volatility. The CAC 40 declined 0.9% over the month, underperforming significantly relative to other European indices.
On the monetary front, the European Central Bank maintained a cautious stance by pausing its series of rate cuts after bringing the deposit facility rate to 2.00%. Inflation in the eurozone edged up slightly to 2.1% in August, reinforcing market expectations that ECB policy rates would remain steady for the near term. This monetary environment favored sectors like banking, which capitalized on sustained higher interest rates to boost profitability. European banks continued as the standout performers, buoyed by strong earnings and validated by the results of the 2025 stress tests that confirmed sector resilience.
Sector Rotation: Overall, the market favored sectors like banking, utilities, and consumer staples, while tech and defense faced headwinds.
Asia
Asian equity markets in August 2025 demonstrated considerable divergence, with China leading regional gains while other major markets faced varying headwinds from trade tensions, monetary policy shifts, and domestic challenges.
Sector Rotation: A clear rotation emerged toward artificial intelligence and semiconductor stocks in China, while traditional technology giants in South Korea faced pressure from trade restrictions. Tourism and consumer-related sectors showed strength in ASEAN markets, while export-oriented industries across the region faced tariff-related headwinds.
China | CSI 300 | +10.33% |
Hong Kong | HSI | +1.23% |
India | Sensex | -1.69% |
Nifty 50 | -1.38% | |
Japan | Nikkei 225 | +4.01% |
South Korea | KOSPI | -1.83% |
Singapore | STI | +2.30% |
Australia | ASX 200 | +2.63% |
China: Regional Leader
Chinese markets led Asia, with the Shanghai Composite jumping 8%, the CSI 300 climbing 10%, and the tech-heavy ChiNext soaring 24%, marking their best month in 11 months.
Japan: Steady Growth
The Nikkei 225 rose 7.1% in August, boosted by the US-Japan trade agreement and 0.3% Q2 GDP growth. The Bank of Japan's cautious rate hikes provided stability amidst global uncertainties.
South Korea: Tech Sector Pressures
The KOSPI faced volatility due to tech concerns and trade restrictions. Samsung Electronics and SK Hynix, despite strong year-to-date gains, were impacted by US export restrictions on China.
1.5 Performance Correlation
BTC’s rolling 30-day return correlation kept negative with gold and REIT, but positive with the S&P 500.
2. New Developments
2.1 Crypto.com News
- Trump Media and Technology Group Corp., Crypto.com, and Yorkville Acquisition Corp. announced a business combination to form Trump Media Group CRO Strategy, Inc., a publicly traded digital asset treasury company focused on acquiring and managing CRO, the native token of the Cronos blockchain ecosystem. Trump Media Group CRO Strategy announced $6.4 billion in funds to build America’s Cronos Treasury, and the company is expected to be the world’s largest holder of CRO.
- Trump Media Group partnered with Crypto.com to integrate CRO and Crypto.com’s digital wallet infrastructure into its platforms, which include Truth Social and Truth+. The partnership aims to make CRO the utility token of choice globally, with Trump Media and Crypto.com working together to expand access to the benefits and opportunities of crypto.
- Crypto.com Custody enabled the use of staked assets as collateral for margin trading, doubling their utility on yield-bearing assets. Staked assets are held in secure custody with multiple assets being supported, including CRO, ETH, and SOL. This service is available in select jurisdictions.
- Crypto.com partnered with the VeChain Foundation to provide secure custody support for VeChain (VET) and VeThor (VTHO), the native tokens of the VeChainThor blockchain. This collaboration expands institutional access to the VeChainThor network.
- VivoPower selected Crypto.com to provide custodial support for its digital asset treasury strategy. Under this partnership, VivoPower’s shares can be traded under Crypto.com’s broker-dealer.
- Aditxt, a platform dedicated to accelerating health innovations, announced that it signed a custody agreement with Crypto.com to establish a custodial crypto account and Crypto.com will serve as the custodian for Aditxt’s proposed digital treasury. The agreement is a foundational step in the broader planned rollout of bitXbio™ — Aditxt’s crypto-native social platform bridging fintech and biotech.
- Crypto.com integrates with Plaid to offer instant asset transfers from other platforms to Crypto.com without needing to sell and therefore incur taxes. It is enabled by Investments Move, Plaid’s new product that securely and digitally automates brokerage account transfers while reducing operational complexity.
2.2 TradFi
Assets Allocation
We used the following assets to construct the portfolio, and compared the returns with adding BTC and ETH:
Asset Class | Assets Selected | Rationale | Weights |
Equities | Broad market exposure and potential for long-term growth | 47.50% | |
Bonds | Stability and regular income | 28.50% | |
Commodities | Gold | Hedge against inflation and economic uncertainty | 9.50% |
Alternatives | Income generation and diversification | 9.50% | |
Crypto | Bitcoin and Ethereum | The largest coins in market cap with relatively less volatility | BTC: 2.5% ETH: 2.5% |
Ray Dalio, founder of Bridgewater Associates, warned that the US is nearing the late stages of a debt cycle that threatens the dollar's role as the world's reserve currency. He believes this shift could boost demand for Bitcoin, gold, and other limited-supply assets. Dalio argues that the US government's soaring debt service costs and fresh borrowing needs are eroding confidence in Treasuries and the dollar, making alternative assets more appealing. He suggests that investors allocate up to 15% of their portfolios to alternatives like gold and Bitcoin to protect against monetary debasement.
Allianz, a $2.5 trillion asset manager, declared Bitcoin a "credible store of value" in a recent investment report. This marks a significant shift from their 2019 policy against Bitcoin investments.
3. Outlook
3.1 Projects and Tokens
Cronos (CRO)
Cronos released its new 2025-2026 roadmap, with key highlights including the development of a mature decentralised finance (DeFi) ecosystem, a partnership with Crypto.com to build an institutional-grade blockchain infrastructure, and efforts to drive retail adoption through direct integration with Crypto.com's product suite. The goal is to make Cronos a unified platform for tokenised markets that is accessible to billions, and to achieve significant adoption by the end of 2026.
Bitcoin (BTC)
Historical “September Effect” could bring weakness, with the average return in September is -3.31%. ETF outflows and bearish momentum indicators (RSI in negative territory) suggest downside risk. However, the potential Fed rate cuts provide a buying case.
Ethereum (ETH)
Ethereum is proposing a unified fee market through EIP-7999, aiming to simplify transaction costs by allowing users to specify a single maximum fee for multiple resources.
Synthetix (SNX)
Synthetix is shutting down its remaining function on Optimism by September and returning to the Ethereum Mainnet to launch a high-performing perpetual futures marketplace. Additionally, SLP vault, a new community-owned market-making system that’s launching soon, is set to offer sUSD depositors a share of trading profits and enhanced risk management. Pre-deposits for the Synthetix Mainnet are live, and users can earn a spot on the alpha whitelist and earn points by depositing sUSD or sUSDe.
Hyperliquid (HYPE)
Hyperliquid delivered a stellar August, setting new benchmarks:
- Revenue hit $110 million, up 21% from July, driven by $398 billion in perpetual futures volume and a 70% share of the on-chain perps market.
- Its HyperEVM Layer-1 chain supported a 24-hour spot volume peak of $3.4 billion on 24 August, with TVL surpassing $768 million and open interest at $12 billion by the end of August.
- HYPE token soared to an all-time high of over $50 on August 27, and it has spent over $393 million on HYPE token buyback.
Chainlink
The US government selected Chainlink and Pyth to publish economic data on-chain. Chainlink will help to publish data related to consumer demand, including GDP and the Personal Consumption Expenditures Index for the Bureau of Economic Analysis (BEA), while Pyth will help on GDP data for the Department of Commerce.
3.2 Token Unlock Calendar
Read the full report: Market Update (Aug 2025)
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Crypto.com Research and Insights team
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