On the Chain: Bitcoin slips below US$77,000 as rate fears test powerful August rally

US-listed spot Bitcoin ETFs saw $3.5B inflows in August, the highest since July 2025. Bitcoin rose 25% in the month, its best performance since November 2024, before slipping to $76,393. Treasury Secretary Scott Bessent's move to lower US borrowing costs and Trump's support for crypto regulation sparked the rally. Analysts attribute the demand to concerns over US fiscal position and hopes for clearer crypto regulations. BlackRock's iShares Bitcoin Trust captured 88% of net inflows.

Fed Chair Kevin Warsh attributed 65 months of elevated inflation to the central bank and emphasized maintaining high interest rates until inflation declines. His speech at Jackson Hole signaled no imminent rate cuts, impacting crypto, stocks, and bonds. Bitcoin dropped to $77,700, and markets reacted with declines in risk assets. Warsh's stance aligns with Powell's inflation-first approach, contrasting with Trump's push for lower rates.

Public Citizen reports Trump's crypto ventures have generated $1.4B in income for him while causing $4.7B in losses for retail investors. Key products include $TRUMP meme coin ($3.2B losses), $WLFI token ($1B+ losses), and Bitcoin holdings ($450M loss). Trump earns through licensing and fees without capital investment, while investors bear price risk. The report suggests Congress should bar presidents from profiting from digital assets they regulate.

Bitcoin (BTC) dropped below $77,000 as U.S. strikes on Iran raised geopolitical tensions, oil prices, and market volatility. Ethereum (ETH) also fell below $2,400, with $115 million in leveraged crypto positions liquidated. The declines followed Bitcoin's 23% gain in August, with further pressure from rising oil prices and potential Fed rate hikes.

Russia's new crypto regulations took effect, allowing retail investors to trade Bitcoin, Ethereum, and USDT through regulated channels. This marks the first legal route for domestic retail crypto investment, potentially increasing demand for these assets. The scope is limited to the specified cryptocurrencies, and the pace of adoption depends on the availability of authorized platforms.

Bitcoin (BTC) has gained 25% in August and 40% from its low, supported by strong spot and ETF demand. Bitfinex analysts note healthy demand absorbing whale selling and macro pressures. U.S. spot Bitcoin ETFs saw $924.5M net inflows last week, despite Friday outflows. Institutional demand for BTC and Ethereum (ETH) remains strong, with ETF demand for ETH four times stronger than BTC's relative to market size.