🏋️‍♂️ Bitcoin now represents 1.7% of global money

Last Friday, the US Federal Reserve Chairman Jerome Powell opened the door to rate cuts during a speech, and as a result the sentiment on the crypto markets brightened considerably.

This has been reflected in the Crypto Fear & Greed Index, which jumped from "neutral" to "greed", while the Bitcoin and Ethereum price reacted positively to the news. Indeed, a rate cut means increasing global liquidity, which usually tends to benefit to crypto-assets.

In addition to interest rate cuts, an enormous growth driver could also soon come from a completely different corner: the US pension market. Following a recent decree by Donald Trump, 401(k) pension funds could soon start to integrate crypto-assets in their portfolio.

According to Bitwise, even a moderate allocation of 1% of pension funds could bring $122 billion in fresh capital, with a potential price target for Bitcoin of $200,000 by the end of the year. Even more ambitious forecasts assume a long-term market shift in which pension vehicles will become the most stable source of demand for BTC.

In this context, Bitcoin now accounts for 1.7% of the global money supply (M2), an achievement driven by the expansive monetary policy of central banks and the increasing demand for hard money.

In the meantime, Strategy acquired an extra 430 BTC for $51 million, increasing its own holdings to 629,376 bitcoins, the company stressed that it does not want to influence the Bitcoin price. According to its Head of Investment Shirish Jajodia, the company is active on the market around the clock without deliberate price manipulation. Indeed, the price reaction after each Strategy purchase is inconsistent, which supports this thesis.

At the same time, doubts are growing in the Bitcoin community. Veterans like Preston Pysh criticize the fact that institutional derivatives, ETFs and custody models are undermining the original idea of decentralized self-custody. According to Pysh, the ideal of personal responsibility is increasingly being supplanted by the narrative of integration into the traditional financial system. The trend towards Bitcoin-based company reserves shows that this change is not only ideological but also structural, a phenomenon that not only Strategy, but also companies such as KindlyMD or Metaplanet are reinforcing.

The link between interest rate policy, macroeconomic liquidity and crypto adoption is becoming increasingly obvious, and Bitcoin has established itself both as a monetary policy indicator and as an early warning system against global devaluation.

Bitcoin is at a crossroads: on the one hand, institutional use is reaching new dimensions, from pension plans to corporate treasury reserves. On the other hand, the estrangement between Bitcoin's original ideology and reality is growing. When regulatory compromises, centralized custody models and ETF dynamics dominate, the question arises: what will remain of Bitcoin's techno-anarchist philosophy?

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💎 New all-time high for Ethereum

Last week, Ethereum spot ETFs saw inflows of $287 million on August 21 alone. After four days of outflows, the total ETF volume bounced back to $27.66 billion, representing 5.31% of ETH's circulating supply.

This strong demand has finally pushed Ethereum's price past its 2021 all-time high to a new record yesterday at more than $4,900, which represents an increase of over 250% since its April low.

Companies such as SharpLink and BitMine are continuing their ETH acquisitions, and today 69 companies are holding over 4.1 million ETH, which is 3.4% of the total supply.

SharpLink alone invested $667 million at near-peak prices and is now using its ETH treasury for staking, which currently provides a yield of around 3%.

BitMine also added 373,000 ETH to its holdings, bringing it to 1.52 million ETH worth $6.6 billion.

While on-chain activity increased by 63% and futures markets reported $69 billion in open volume, analysts warned of seasonal setbacks in September. Indeed, ETH has historically performed weakly during this month, after the August rallies.

Institutional demand for Ethereum has reached a new level, both in terms of volume and strategic focus. While ETFs are attracting capital, treasury companies such as BitMine or SharpLink are building up massive ETH reserves and actively staking them.

The result is a supply shortage that could absorb the historical seasonal correction that usually happens in the month of September following the August rallies. This pattern could therefore be broken for the first time this year.

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💵 The geopolitical future of the digital dollar

Coinbase forecasts that the stablecoin market could grow to $1.2 trillion by 2028, driven by regulatory clarity and the US dollar as a digital anchor. Tether and Circle in particular are gaining macroeconomic importance as large buyers of US government bonds.

Demand could even have an impact on the yield level of three-month T-bills in the medium term. This forecast is based on the GENIUS Act planned for 2027, which is intended to regulate stablecoins in the US in a comprehensive way.

In parallel, a de facto ban of central bank digital currencies (CBDCs) was introduced in the House of Representatives as part of the defense budget.

The Federal Reserve would therefore no longer be allowed to develop or test its own digital currency in the future, with the exception of open and permissionless stablecoins. The measure is part of a Republican change in strategy and is linked to the Trump declaration rejecting CBDCs.

Stablecoins are evolving from a market phenomenon to a geopolitical question of power. While a digital dollar controlled by the state is now politically blocked, the USA are strengthening private dollar tokens with potentially global consequences for capital markets, currency competition and the role of the state in the digital monetary system.

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🌎 The new currency order

According to the Financial Times, the European Central Bank is examining whether the digital euro could run on transparent networks such as Ethereum or Solana in the future, a potential change of course away from closed infrastructures.

The openness of these blockchains is symbolic of a European counterweight to the Chinese strategy, in which CBDCs are fully controlled by the state. The discussion is being held against the backdrop of the increasing dominance of US stablecoins, which are challenging Europe's monetary autonomy.

At the same time, Russia is pushing ahead with a mandatory introduction of the digital ruble for large companies from 2026, despite massive skepticism among the population. According to the National Rating Agency, the project could bring up to $3.25 billion into the economy every year starting from 2029. However, banks are confronted with high conversion costs and possible loss of revenue. The digital rouble is also being used as a geopolitical tool: Russia is already using it in foreign trade, alongside Bitcoin and USDT.

In the US, the debate about digital identities in DeFi is threatening to escalate. The Treasury Department is considering integrating KYC checks directly into smart contracts, an idea that critics have likened to "living room surveillance". Although new standards such as zero-knowledge proofs and decentralized identity protocols (DID) should enable data-saving alternatives, the basic principle of permissionless-ness is at stake.

The global dispute over digital money is no longer a technical project, but a geopolitical cut-throat competition. While Europe is struggling for openness and compatibility, Russia is testing control and coercion, and the USA are wavering between innovation and surveillance. Whoever wins the race will not only write the infrastructure, but also the rules of the digital financial system of the future.

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