“Asia Morning Update: Equities Rise on Rate-Cut Bets, Cryptocurrency Markets Cautious”

Crypto markets remain cautious as traders await Thursday’s U.S. Consumer Price Index (CPI) report. Bitcoin is holding above $111,600, while Ethereum trades near $4,298. The CD20 index, tracking the top digital assets, is up 1.6%, trading just above 4,000.

While equities and gold have rallied on expectations of Fed rate cuts, crypto continues to diverge from broader risk sentiment. August’s Nonfarm Payrolls added just 22,000 jobs versus forecasts of 75,000, pushing futures higher and sending 2-year Treasury yields to year-lows as markets price in 72 basis points of Fed cuts this year.

Options markets reflect a defensive stance. QCP Capital notes rising put skews and elevated short-term implied volatility ahead of CPI. Polymarket data shows ETH with a 70% chance of staying above $4,600 this month, but only a 13% probability of breaking $5,600. Solana stands out, with rising odds of a new all-time high before 2026, suggesting improving market breadth beneath the surface.

Enflux highlights the “split-screen reality” of 2025: speculative narratives dominate headlines while institutional adoption and infrastructure quietly strengthen. WLFI’s recent freezing of over 270 wallets, including Justin Sun’s, underscores the speculative side, though onchain data shows Sun’s transfers occurred hours after the crash, which was largely driven by shorting across exchanges.

Market Snapshot:

• BTC: Consolidating above $111K; breakout possible, but $100K downside risk remains.
• ETH: Around $4.3K, reflecting cautious positioning.
• Gold: ~$3,636/oz, fueled by rate-cut expectations and safe-haven demand.
• Nikkei 225: +0.9%, reaching record highs amid fiscal stimulus hopes.
• S&P 500: +0.2%, as investors await CPI for Fed guidance.

Takeaway: Short-term volatility and governance drama may cap crypto gains, but institutional and regulatory foundations continue to solidify. As Enflux notes, “Structural legitimacy, not speculation, remains the real story of 2025.”