Let's get to the big story breakdown.
Crypto markets surge in the latest month, with total trading volume on centralized exchanges in August, hitting a yearly high of $9.72 trillion up over 7.5% from July.
Now the growth was driven by derivatives trading, which jumps over 7.9% to $7.36 trillion and now accounts for over 75% of all activity.
And spot trading also rising by over 6.5% to. $2.3 trillion marking its strongest month since January, and open interest on derivatives exchanges climbed to $187 billion up nearly 5%.
Well joining me to weigh in is Andy Beer, who's head of product and research at Coin Desk Industries.
Andy, good morning.
Thank you so much for joining us.
Good morning.
It certainly wasn't a boring summer, was it?
So August volumes like that, we have to remember that unlike equity markets, which tend to experience these volume surges during meltdowns, right.
Crypto melts up.
So during that fantastic August month where we had all-time highs for Bitcoin and all-time high for ether which broke a 4 year drought, there was also a ton of volume which is just a sign of really good market health.
We continue to see that percentage of volume stored in derivatives getting higher and higher, which you can interpret in many ways.
I think probably that market structure is good.
Capital is flowing evenly.
A lot of these are offshore.
Perpetual markets and that number also encompasses the contracts that are traded here in the United States.
So the global markets for crypto were alive and well and very, very healthy and very, very excited in August.
Yeah, and as we kick off the month, there's a lot to digest in terms of macro.
So I do want to hear a little bit more about the internal market dynamics as well as the regulatory landscape, especially as coin desk.
Wrapped up an event in DC.
Yeah, that's right.
A couple of weeks ago we talked about heading into the washing machine, right, where we're going to be swirled around by interest rate expectations, earnings, leadership by bellwether, sentiment stocks like Nvidia.
So where are we going to go from here?
Plus we have the SEC poised, although slight delay today, but we don't worry too much about these delays these days of a bunch of new ETFs coming to market.
So there's a, there's a lot of different things happening right now.
For these assets right now I think the market feels pretty confident.
We had a pretty benign CPI print this morning, and I think that that will continue to provide support.
As you mentioned, Coin desk did a regulatory event yesterday.
The Clarity Act has been passed in Congress.
It's making its way through the Senate right now.
We feel good that there are deadlines in place, self-imposed by the Senate to get regulatory stuff done.
This year, usually it takes a crisis for regulatory changes to happen, progress to happen this quickly, so we're delighted that it's happening in good times, not in crisis times.
For our viewers who are hearing the applause and clapping behind us, we are marking the 24th anniversary of the 9/11 tragedy.
So I do just want to mention that very briefly.
So Andy, while we're taking a look at the charts this morning, I do want to get your take on Seoul because when we look at year to date versus one air performance, we do see quite a stark contrast.
So what's happening with that token?
There, you know, the biggest story of the year has been the rotation from Bitcoin to ether.
Now Ether's kind of rally that went all the way from April into August seems to be taking a pause.
We've seen some outflows in ETFs.
We saw an all-time high in the late part of August and a pullback from there.
Salon appears to be picking up the baton here, and it's not too much of a surprise.
It's in the top 5 assets.
It's in our coin desk 5 index.
It's another very easy to understand layer one blockchain just like Ethereum.
It made a lot of noise last year when a lot of the meme.
In activity took place on Solana.
Solana is doing great things with stablecoins.
It's doing great things with other smart contracts.
So it's a pretty easy once you understand Ethereum, it's very, very easy to understand Sellana with ETFs coming to market to match the newly relatively new futures in the United States, there is going to be a much easier way to onboard.
We have dads buying into Salana, many of them, and some good high profile ones as well.
So it's not too hard to understand that people are going to Understand Salon.
It's a high volatility name.
It's higher volatility than ether, which many people like in crypto.
So it seems to be a good time to really keep an eye on it.
Of course, most investors who don't want to track these rotations, Bitcoin, ether, Solana, you know, index products are going to let you capture all of these stories and follow the rotations around and you know pick up all that performance.
Yeah.
And Andy, before I let you go, we have about 60 seconds here, so zooming out beyond. and Solana, we know that the interest rate decision coming up next week is going to be key, not just for the broader market but also for crypto.
So in terms of Catalysts, what are you focusing on?
Well, usually we would think of Bitcoin as the macro asset that has very, very easy to understand and direct factor sensitivities to interest rates right when you think about forward inflation expectation or forward real rate expectation being a primary driver for Bitcoin.
So rate cuts should be, you know, supportive of that.
We also noticed that a lot of names went up after the Jackson Hole event earlier this year, either being not the least of them.
So there will be a sentiment effect.
Looks like we have a pretty clear indication that the Fed is going to take action soon.
I think it will be supportive.
It looks like Bitcoin may have been hoping maybe for a little bit more of a CPI surprise today than the sort of expected number.
We got so we'll have to see right now the momentum includes breadth, which we're very happy about because there will be a lot of products coming to market and it will help broaden out the education story.
So sentiment should prove supportive for the entire asset class.
Well Andy, thank you so much for breaking it all down and next time you and I are together, we will know the outcome of the September meeting, so I look forward to that discussion.
Thank you so much for joining me today.
Thank you, Remy.
