Geo-Political Tensions Ease Creating a Rebound in Prices

Earlier this week, markets were rattled by news that the United States had entered open conflict with Iran, following the bombing of three nuclear facilities. Following this, tensions escalated after Iran’s parliament approved the closure of the Strait of Hormuz, one of the world’s most crucial oil trade routes, sending shockwaves across global risk markets and leading to nearly $1 billion in crypto liquidations.

Yet despite the turmoil, Bitcoin showed impressive resilience. After briefly dipping below $98,000, BTC quickly reclaimed $100,000 and has now surged back to $107,000 following news of a ceasefire agreement between Iran and Israel. This sharp recovery reinforces the growing narrative that Bitcoin is emerging as a credible macro hedge, capable of absorbing geopolitical shocks and preserving capital during moments of uncertainty.

Altcoins, on the other hand, continue to lag long term. Risk appetite remains subdued, with investors staying cautious amid broader volatility. Until macro conditions stabilise and confidence returns, capital is likely to concentrate in safer assets, and for now, Bitcoin is earning that title.

Weekly Price Update

Texas Is Next for BTC Reserve

Texas is the next US State to sign a Strategic Bitcoin Reserve, establishing a state-managed Bitcoin reserve effective September 1. The reserve is funded through legislative appropriations, private donations, and investment returns, focusing exclusively on cryptocurrencies with a market capitalisation exceeding $500 billion, currently only Bitcoin. The reserve aims to mitigate inflation risks and strengthen Texas’s financial resilience, reinforcing its position as a global leader in cryptocurrency adoption.

Following New Hampshire’s BTC Bill and Arizona’s BTC Bill, both passed earlier in 2025, Texas joins a pioneering group of states integrating Bitcoin into public finance. These initiatives reflect a growing trend of states embracing Bitcoin as a strategic asset, one that is likely to continue.

The Fed Holds Steady, But For How Long?

The Federal Reserve kept interest rates unchanged at 4.5% during its latest FOMC meeting a decision widely anticipated by markets. However, the tone from policymakers remains cautious, with no clear signals on when rate cuts might begin. With geopolitical instability threatening to drive oil prices higher, the Fed is likely to remain in a holding pattern for longer than many had hoped.

Rates vs Bitcoin Price

This creates a tricky environment for risk assets. Inflationary pressure driven by energy shocks could force the Fed to delay easing, even if broader economic growth shows signs of slowing. For crypto, this environment has historically been a headwind, especially for altcoins that rely on easy liquidity. Bitcoin, however, is beginning to behave differently. It’s not just a speculative asset anymore, it's being treated by some investors as a macro hedge, a new alternative to gold in a time of war and uncertainty.

Crypto Net-Flows Update

This past week saw significant shifts in crypto capital flows across major ecosystems, with Ethereum emerging as the clear beneficiary. Over $1.7 billion in inflows entered Ethereum, leading to a net inflow of $1.2 billion, primarily through bridging activity from other chains. This surge is likely driven by renewed institutional interest, increased staking confidence, and users rotating out of experimental Layer 2 and alternative Layer 1 ecosystems back into Ethereum’s perceived stability and liquidity depth.

In contrast, Base experienced the largest net outflows, with over $1.2 billion exiting the chain. While Base continues to lead in active users and memecoin engagement, the outflows may reflect profit-taking after months of explosive growth. Arbitrum also saw positive net flows, benefiting from their integration with key infrastructure and Hyperliquid which has been drawing in a lot of capital.

The data reflects a broader trend of capital consolidation into more established ecosystems as volatility and macro uncertainty increase. Users appear to be de-risking by moving funds back into Ethereum, reinforcing its role as the liquidity and security anchor of the crypto economy.

Crypto Equities Soaring

There’s been a noticeable shift in crypto market sentiment, where risk appetite for altcoins remains low and liquidity is thinning across smaller tokens. Instead, we have seen capital is rotating into crypto equities, particularly stocks like Coinbase (COIN) and the newly listed Circle (CRCL), which are showing strong outperformance reaching all time highs. This reflects a broader trend toward lower-volatility, institution-friendly vehicles that still offer strong exposure to the crypto economy. COIN has stood out as a core portfolio candidate this cycle, functioning as a bet for broad crypto exposure. It combines asset exposure (BTC, ETH, etc), revenue-generating businesses (exchange fees, custodial services), venture deal access via Coinbase Ventures, and a powerful growth narrative through its Layer 2 chain, Base - now the fastest-growing ecosystem.

Now this only reaffirms the current risk-off sentiment but likely as things start to ramp up again we should see money start flowing back into altcoins and assets that can achieve significant short term gains.

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