Welcome back, folks. Ben took a quick break from monitoring the Roman Storm trial to address the institutional demand for ETH that’s helping drive the July surge of crypto product inflows. 

Meanwhile, Casey breaks down what markets want to see in tomorrow’s FOMC statement. Here goes:

A July to remember

Crypto investment products have raked in record monthly flows in July, putting a spotlight on the institutional demand for ETH. 

How much interest coins will see from investors further down the curve remains an open question.

The aforementioned flows record had extended to $11.2 billion by July 26, CoinShares data shows. That’s well above the prior monthly high of $7.6 billion seen in December 2024.  

While bitcoin products have historically carried the crypto pack from a flows perspective, those have tallied only about half the segment’s flows this month. 

ETH offerings attracted most of the rest: 

Ether products clearly saw the most attention last week as money trickled out of bitcoin vehicles. US ETH ETFs brought in another $157 million on Monday.

It seems to be the institutional demand progression we’ve heard about for years. BTC has the largest market cap. It gets the headlines. The narrative around BTC is a bit simpler and intuitive, attracting capital. It’s digital gold, yada yada.  

But Ethereum has become hard to ignore, particularly after the GENIUS Act became law. 

Competition among institutions that now have a path to issue stablecoins (by registering with the OCC) is set to speed up adoption in the US, noted ZX Squared Capital co-founder CK Zheng. That will disrupt the existing payment infrastructure with faster and cheaper processes built on blockchain technology. 

“Given most of the stablecoins are built on [Ethereum], the demand from the institutional investors for ETH will grow exponentially for the foreseeable future,” Zheng told me. “We expect ETH price to hit $10,000 during this bull market run.”

ETH was trading around $3,750 at 1 pm ET Tuesday — up 54% from a month ago. 

Even with the narrative for ETH (as the platform for stablecoins) being stronger than ever, it remains “a catch-up trade.” For those keeping score at home, BTC has the edge over ETH on YTD returns, +26% to +12.5%. 

As the chart further up shows, $860 million has flowed into solana and XRP products this month as well. 

Whether or not we’re entering an “altcoin season” is a question with an “inconclusive” answer, according to CoinShares research head James Butterfill.

“These altcoin inflows may be driven less by broad-based enthusiasm and more by anticipation surrounding potential US ETF launches,” Butterfill wrote.

It’s worth noting too that, on the corporate crypto treasury strategy front, some are buying altcoins directly. 

Mill City Ventures revealed a $450 million private placement on Monday to kick off efforts to make SUI — the native token of the layer-1 Sui blockchain — its primary treasury reserve asset.  

London-based hedge fund Karatage Opportunities and Sui Foundation were the biggest investors. The company intends to use ~98% of the proceeds to buy SUI and ~2% to fund its short-term lending business. 

Also on Monday, CEA Industries said it looks to build the world’s largest publicly listed BNB Chain treasury strategy. BNB’s market cap of ~$115 billion is the fifth-largest among cryptos.

The current lack of US ETFs holding altcoins boosts interest in these companies to access token exposure in a traditional brokerage account, said Grayscale research head Zach Pandl.  

As more crypto ETPs become available, he told me, demand for altcoin treasury companies may diminish. He expects those ETP launches later this year. 

“Regardless of the product wrapper, institutional investors are likely to focus on the altcoins with sustainable revenue,” Pandl added. “In traditional finance, the ‘revenue meta’ never goes away.”

Zheng noted that it could take years before institutional investors get comfortable to take risks in this space — beyond BTC and ETH.  

“It may require regulatory clarity around the entire crypto ecosystem as well as a clear narrative for a specific coin that has an eye-catching application with strong fundamentals,” he explained. 

While we expect more clarity, the market will decide what applications catch their eye. As with most things, time will tell.

— Ben Strack

Institutional interest in Ethereum is running hot. ETF flows are gaining momentum, new token acquisition vehicles are forming every week, and ecosystem morale is nearing ATHs. 

The only question left: Where will $ETH be when DAS London kicks off this October?

Get your tickets today with promo code: FGNL

📅 October 13-15 | London

This is the amount of hires in June, according to the US Bureau of Labor Statistics. The figure comes in lower than May’s figure of 5.47 million. Job openings also decreased in June, coming in at 7.43 million, a decline of 275,000 from May. 

The survey as a whole suggests that the labor market is continuing to cool, albeit gradually.

It’s Fed Decision Day Eve and while we’re all but certain interest rates will remain unchanged, tomorrow’s FOMC statement and Chair Powell’s press conference have potential to move markets. 

Investors are hoping for a September rate cut, and right now, they’re decently confident that’s what we’ll get. Markers are currently pricing in a 62% chance of a 25bps cut in September, per data from CME Group. 

What kind of language in tomorrow’s statement would assure markets that FOMC members are feeling dovish? For starters: any indication that tariff-related inflationary fears are easing. 

We know uncertainty around trade relations has central bankers worried there could be a relapse in inflation, and that has been a key reason why the Fed hasn’t cut rates so far this year. So if tomorrow’s statement notes that inflation is “easing,” that would be a positive sign for a September rate cut. 

What else? Markets would like to see language suggesting that committee members are less concerned about economic uncertainty. 

In June, the FOMC wrote the following: “Uncertainty about the economic outlook has diminished but remains elevated.” 

If tomorrow’s statement cuts those last three words, it would be a very dovish signal. 

We know Powell is going to be asked about when the committee will cut rates, and we know he’s going to be evasive. But should he express confidence in the direction of inflation and the labor market, expect equities to rally. 

We’ll be watching tomorrow, and Forward Guidance podcast host Felix Jauvin will be breaking down the statement and Powell’s comments live. Be sure to tune in on X around 3:30 pm ET.

— Casey Wagner