Markets Brace for Weak September

Denis Omelchenko & Olivia Capozzalo
September 01, 2025

gm, Defiers!

Today’s big story:

The cryptocurrency market is kicking off the month with most assets slightly in the red, as traders digest new inflation data and await the Fed’s next move

In other news:

EF proposes L2 interoperability layer
Galaxy analyzes crypto ETF prospects
BTC may have peaked early this cycle: CoinGecko
Goat Network: The future of Bitcoin DeFi and sustainable BTC yield [SPONSORED]

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Today’s Big Story

Crypto Markets Brace for Historically Weak September

Happy September, Defiers (and Happy Labor Day to those celebrating)!

The cryptocurrency market is kicking off the month with most assets slightly in the red, as July inflation data and still-resilient consumer spending forced traders to recalibrate how fast the Fed might ease rates.

Bitcoin (BTC) is trading just below $109,000 and Ethereum (ETH) is hovering around $4,400 as total crypto market capitalization dropped about 1% to $3.84 trillion, down from last week’s $4 trillion mark.

BTC 24-hour price chart. Source: CoinGecko

Spot Ethereum ETFs continue to outpace Bitcoin funds. In August, spot ETH ETFs pulled in $3.87 billion, bringing total inflows to $13.5 billion and total assets to $28.6 billion — the second-largest monthly inflow ever after July’s record $5.43 billion, according to SoSoValue.

Spot BTC ETFs, by contrast, saw capital rotating the other way, posting $751 million in net outflows for the month. The stark difference in flows seems to be keeping ETH prices more sensitive to fresh buying, while BTC sees a more uneven push and pull.

That flow difference comes as long-term BTC holders have already realized more profits this cycle than in all but one previous cycle, Glassnode analysts noted in an Aug. 26 post on X, signaling that Bitcoin may be entering a late phase of its market cycle.

After dropping nearly 6.5% in August, Bitcoin heads into September on historically softer footing, while October and November have often been the months that really bounce, per data from CoinGlass.

Ethereum, boosted by ongoing treasury buys and ETF inflows, had a way stronger August. In fact, it was the first positive August for the cryptocurrency since 2021, finishing the month up 18.8%.

Macro Update

July’s Personal Consumption Expenditures (PCE) data showed headline inflation at about 2.6% and core inflation (excluding food and energy) at 2.9%, suggesting that overall price growth is moderate but underlying pressures remain, so the Fed is likely to move cautiously on rate cuts.

Futures and the CME FedWatch tool mirror that view, heavily favoring a 25-basis-point move over larger cuts.

Investors now have their eyes on the next macro releases. The August Producer Price Index on Sept. 10 and subsequent labor data, which could shift Fed expectations and shake market direction yet again.

Denis Omelchenko, staff reporter at The Defiant

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Bridging the Gaps: Prabal Banerjee on Scalability, Interoperability, and the Future of DeFi

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His mission? To make blockchain invisible to the end user. We also dive into the multichain future and why interoperability is the key to mass adoption. Prabal explains how Avail is building the infrastructure to unify the fragmented blockchain ecosystem and shares exciting news about Avail’s acquisition of Arcana, a move that could redefine how developers and users experience web3.

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