Crypto gets sudden lift

Ahead of a closely eyed Federal Reserve gathering later this week in Jackson Hole, Wyoming, crypto markets suddenly have shot higher.

Early Tuesday, Bitcoin was closing in on $61,000. As of 6:41 a.m. (EST), BTC had gained 4.4% over the previous 24 hours.

Memecoins are flying again. Among Top 30 coins, Pepe (PEPE) has turned in the biggest single-day gain (+11%). PEPE's market capitalization is now back to $3.4 billion. (Back in late May, it was $5.3 billion). 

PEPE's chum, Brett (BRETT), soared nearly 30% in the past day. BRETT was created on Base, the Ethereum layer-2 chain. Currently, BRETT has a market cap of $955M, making it the 79th-largest digital asset, according to CoinGecko.

As originally conceived in the Matt Furie comic, Pepe the Frog had a blue-toad buddy, Brett, known for being laid back.

BRETT the coin came out of the gate this past winter with a relaxed price (hardly a fraction of a penny) but this past June BRETT hit 19 cents, an all-time high. BRETT's spot price has since been cut in half.

Meanwhile, in the world of DeFi, Aave (AAVE), No. 46 coin, is up 17% after two conspicuous whale purchases, per Lookonchain. Aave is a decentralized lending platform. AAVE is that platform’s native token.

And one additional item of noteworthiness: crypto market turbulence remains stubbornly elevated.

Decrypt pointed out that the Bitcoin Volatility Index climbed to its highest point (3.25%) of this year back on August 10. That was a day removed from BTC's hair-raising tumble to below $54K. Now ten days later, the seatbelt sign remains switched on with the volatility barometer currently at 3.07%.

The positive news for exchange-traded crypto funds on Monday was found in spot Bitcoin ETFs. They took in a net $62 million. That marks a few straight days of inflows. Bravo.

Negativity came in the form of a net $14 million that exited Ethereum ETFs yesterday.

Trading in these BTC and ETH products has been tepid. BTC ETF volumes are at their lowest since February. ETH ETF volumes also have dwindled.

Heralded at launch in July, the newly launched ETH ETF vehicles seem snake-bitten ever since, with combined net outflows of more than $400 million. Grayscale’s Ethereum Trust (ETHE) has hemorrhaged the lion's share, some $2.43 billion, since its conversion to an ETF. It’s a relatively pricey investment product, so this was expected.

Nevertheless, several weeks of significant outflows "continues to weigh heavily on ETH’s performance," CryptoSlate said.

ETH has declined 25% in the past month. The second-largest crypto, as of early today, stood at $2,644 on a gain of 2.4% in 24 hours.

Meanwhile, dYdX (DYDX), governance token of the dYdX decentralized exchange, spent much of Monday in the green, getting to $1.12. As of this morning, DYDX finds itself in the last seat in the last row of a section reserved for the 100 largest coins, or, as it turns out, those with market capitalizations in excess of $663 million. No. 100 DYDX's spot price declined 3.4% to $1.07 since yesterday at this time.

No. 101, Tezos (XTZ), has a market cap of $660M. XTZ rose 1.4% in 24 hours. We'll keep an eye on these two.

Gold prices earlier today surged to a new high – $2,522.99 – as investors flock to safe havens in a time of uncertainty with respect to the economy and the world of geopolitics (i.e. who will be the next U.S. president?) and amidst a general sense of dread that some shoe somewhere is bound to drop, signaling an unscheduled slowdown instead of a soft landing.

The prospect of falling interest rates has produced a counterintuitive tailwind for the precious yellow metal's future price, at least versus the longer-term trajectories expected for some stock shares and bonds. This gold/rate relationship in the long run boils down to lower rates ultimately diminishing likely returns for bonds and income-oriented public companies.

"Which has prompted many investors to place their bets on gold increases," noted The Guardian.

The European Central Bank started cutting rates in June. Earlier this month, the Bank of England followed suit. Markets anticipate the Fed cutting rates by 0.25% when next it meets on the 18th of September. Such a percentage point reduction would bring the Fed's target rate range to an upper band of 5.25%. According to the CME's FedWatch Tool, traders view this scenario as a certainty.

The Fed chair, Jerome Powell, will deliver a potentially pivotal speech on Friday.

Some investors may shrug off even the outright declaration that, yes, rates are going to start to come down starting next month. A sizable sub-segment of cautious traders is waiting for the dust to settle – after the election, Nathan Gauvin, CEO of Gray Digital told Decrypt.

"The crypto market's ability to capitalize on positive macroeconomic developments remains constrained," Gauvin added.

Taking a longer view, Real Vision's top analyst, Jamie Coutts, remains convinced that, barring some massive geopolitical event, "Bitcoin is likely to outperform everything else."