Key Catalysts: Policy, Labor Data, and Geopolitics
The positive momentum was underpinned by several key developments. The US Federal Reserve maintained its monetary policy stance, citing persistent inflation risks, which initially disappointed markets. However, weak July employment data—unemployment rising from 4.1% to 4.2% and job creation at just 73,000 (vs. 106,000 forecast)—cast doubt on the Fed’s cautious position and increased the likelihood of interest rate cuts to support economic recovery in the medium term.
The departure of Fed board member Adriana Kugler, likely to be replaced by a more dovish official (reportedly Stephen Miran, White House Council of Economic Advisers chair), bolstered investor confidence in a forthcoming policy pivot. The US dollar weakened on these expectations, with major players turning back to cryptocurrencies as a hedge against deteriorating US trade relations with India and China. President Trump’s recent hike in tariffs on Indian imports to 50% in response to continued Russian oil purchases, alongside the looming expiration (August 12) of US-China sanctions relief, further stoked demand for non-dollar assets.
Following this, crypto ETF inflows resumed after several sessions of outflows, and the Fear & Greed Index rose to a “Greed” reading of 74, indicating renewed bullish sentiment among crypto investors.
Regulatory Tailwinds and Sectoral Highlights
Longer-term optimism remains anchored by the US government’s increasingly pro-crypto stance. Recent highlights include President Trump’s signing of the GENIUS Act for US stablecoin innovation, SEC Chair Paul Atkins launching a regulatory framework for digital assets (with CFTC cooperation), and the enactment of legislation permitting digital currencies in retirement plans—developments set to attract further institutional capital into the crypto sector.
XRP led the week’s gains, propelled by the final resolution of the SEC v. Ripple Labs case, which began in 2020. Both parties notified the Appeals Court of their mutual withdrawal of appeals against the 2023 verdict. Judge Analisa Torres found Ripple in violation of securities laws for institutional sales of XRP and imposed a $125 million fine, but did not designate XRP itself as a security.
Outlook: Institutional Optimism and Technical Support
Institutional optimism remains high, with favorable regulatory signals and new legal clarity boosting risk appetite. The ongoing rotation into digital assets could drive further gains across the crypto market in the coming week, especially as macro and geopolitical uncertainty continues to weigh on traditional markets.