Mixed signals confound markets

Generous Bitcoin was giving back this week’s gains on diminished ETF hopes even as macro winds blew favorably, and, incidentally, as a brilliant blue sky enveloped our valley on a gorgeous sunny morning.

From the corridors of power in Washington, D.C., to hangover-ravaged Manhattan trading desks, inflation watchers and risk investors were on the edge of their seats in anticipation of August employment data, scheduled for release at 8:30 a.m. (EST).

Numbers were supposed to run cool. They did, partly. More jobs than expected were added by the U.S. economy.

But the unemployment rate was up significantly. And so stock futures jumped on hopes that, based on that labor market cooling signal, the Fed might pause its money supply tightening program that devours prospects for risk assets appreciating.

As of 8:55 a.m. (EST), BTC was hovering at $26,040. It had dipped below that level earlier. Thus, good news, it seems the slide at least stopped.

This macro stuff is tricky business. Yesterday brought mixed inflation signals. July's Personal Consumption Expenditures (PCE) price index (also known as the "Fed's fave thermometer"*) came in at 3.3%, an uptick of 0.3% compared to June. A lower level would have been preferred; but the reading at least was in line with expectations. (*Okay, we admit no one calls the PCE that.)

Meanwhile, Toncoin was popping green in the early morning while most everything was beet red. We’d checked it at 7:54 a.m. (EST) and saw it rose 2.4% in 24 hours. According to Decrypt, the TON Foundation released a Telegram-centric Web3 app store and launched a community-driven initiative for promoting ecosystem development.

Not exactly surprisingly, the SEC shoved a stack of spot Bitcoin ETF applications off to the side, delaying what seemed like the start of a more mainstream friendly crypto investing environment, crushing widespread optimism that ran high a mere three days ago.

Bitcoin fell 5% in 24 hours as of Friday at 7:38 a.m. (EST). It was straddling the $26,000 line throughout the morning as traders awaited the August jobs report. Briefly, BTC, toddler-cranky, plunged sub-$26K after the federal regulator, simply citing the need for more time to review product applications, extended, by 45 days, the deadline to approve or deny a half-dozen ETF decisions.

BTC earlier in the week had reached nearly $28,000 after news broke that the SEC lost a court battle with Grayscale which had sued the agency over its rejected bid to convert GBTC into an ETF.

Sunny skies came to this rain-soaked neck of the woods. Right on cue for the first day of September, the temperature plunged. Accordingly, sweatshirts and heavy blankets were removed from plastic bins.

For crypto, summer and winter have become amalgamated into a seasonal grab bag that in terms of any discernable trend can best be described as "your guess is as good as mine."

This week’s BTC gains just got erased. BTC is dead flat over seven days. However, it’s up 29.9% versus one year ago at this time. In the month of August, the largest crypto shed roughly 12%.

The second-largest crypto, Ethereum, fell 11% in August. ETH actually got a major boost of legitimacy this week.

Even though the SEC has not classified ETH as a commodity, a New York judge did exactly that in dismissing a lawsuit against Uniswap. Judge Katherine Polk Failla of the Southern District of New York specifically called ETH a commodity in her ruling, explaining her decision to not "stretch federal securities laws to cover the conduct alleged."

Failla, as CoinDesk noted, is the same judge overseeing the SEC lawsuit against Coinbase in a case involving the make-or-break issue of whether a slew of altcoins are, or are not, unregistered securities.