Good Morning, Asia. Here's what's making news in the markets:
Welcome to Asia Morning Briefing, your daily digest of key stories during U.S. hours, along with insights into market movements and analysis. For a complete look at U.S. markets, refer to CoinDesk's Crypto Daybook Americas.
Polymarket and CME FedWatch are in sync: the Fed’s easing cycle kicks off tomorrow. Both forecast a 25 bps cut for the next FOMC meeting, with increasing expectations for three cuts by year-end.
Polymarket traders anticipate more aggressive easing, while CME suggests steadier 25 bps cuts. Nevertheless, markets view a total of 75 bps in cuts as the standard for 2025.
Strong market belief in the Fed pivot is evident on-chain, as BTC trades at $116,762, reflecting a 1.3% daily increase and 4.7% weekly gain, while ETH stands at $4,502, up 4.3% for the week as traders account for the anticipated cuts.
Some traders, however, are holding back to assess market reactions following the Fed’s announcements.
A recent CryptoQuant report reveals that bitcoin exchange inflows have dropped to a 7-day average of only 25,000 BTC, the lowest in over a year and a half; a level last seen in mid-July when BTC first surpassed $120,000. Additionally, the average BTC deposit size has halved to 0.57 BTC, indicating that large holders are staying put rather than rushing to liquidate.
ETH mirrors this trend: exchange inflows have fallen to a two-month low of 783,000 ETH, down sharply from 1.8 million in August. The average ETH deposit has decreased to 30 ETH from 40–45 ETH earlier this summer, hinting at diminished sell-side activity among whales.
While BTC and ETH are being held back, stablecoins are flowing in, according to CryptoQuant’s report. USDT deposits into exchanges soared to $379 million at the end of August, marking the highest this year, and currently remain elevated at $200 million. The average daily USDT deposit has doubled since July, providing exchanges the “dry powder” necessary for a potential post-Fed rally.
However, the flows lack uniformity. Altcoins are experiencing a surge in exchange activity, with transaction deposits reaching a 7-day total of 55,000, up from a stagnant 20,000–30,000 earlier this year. This discrepancy indicates potential profit-taking in higher-beta assets despite tight BTC and ETH supply.
“September brings a wave of token unlocks totaling $4.5 billion, which could strain liquidity and test market absorption,” wrote OKX Singapore CEO Gracie Lin in a note to CoinDesk.
True opportunities lie beyond short-term fluctuations, Lin contended.
“Stablecoins are approaching a $300 billion supply, token unlocks are challenging market depth, and significant infrastructure upgrades like Nasdaq’s move towards tokenized securities are reinforcing that crypto is becoming integral to the global financial system, rather than being an outlier,” she noted.
The conclusion is evident: the Fed pivot is nearly factored in. What remains crucial is whether crypto’s liquidity buffers, stablecoins, exchange inflows, and token unlocks can withstand shocks and funnel capital into the next upward phase for BTC.
Market Movement
BTC: BTC trades above $116,500 as traders remain hopeful about potential U.S. interest rate cuts. Technical elements like the closing of futures gaps contribute to upward pressure, although caution is emerging ahead of the Fed meeting.
ETH: ETH is demonstrating modest strength, buoyed by overall crypto market momentum (led by BTC), faced with some resistance as investors consider macro risks and wait for clearer policy direction from the Fed.
Gold: Gold is achieving record highs, spurred by expectations of U.S. Federal Reserve rate cuts, a weaker U.S. dollar, and increased geopolitical or macroeconomic uncertainty. Demand for safe havens from investors remains robust.
Nikkei 225: Asia-Pacific stocks declined on Wednesday morning, with Japan’s Nikkei 225 falling 0.3% as investors monitored Wall Street losses and anticipated a potential Fed rate cut decision.
S&P 500: The S&P 500 edged down 0.13% to 6,606.76 on Tuesday, as investors took profits ahead of the Fed’s rate decision after hitting a record high previously.
Elsewhere in Crypto
- Eric Trump defends UAE-Binance deal, claims his father is ‘the first guy who hasn’t made money off of the presidency’ (The Block)
- President Trump alleges New York Times harmed meme coin in a $15 billion lawsuit (Decrypt)
- The Clarity Act is likely dead: Here's what to expect next for its successor legislation (CoinDesk)
