Crypto markets slipped after hotter U.S. inflation data triggered $1B in liquidations, though Ethereum continued to outperform Bitcoin on a relative basis. The Fed announced it will wind down its special crypto supervision program, signaling a softer regulatory approach. Gemini revealed steep losses in its IPO filing, while Deribit prepared to launch USDC-settled BTC and ETH options. Hong Kong introduced stricter custody rules for exchanges, highlighting growing regulatory scrutiny. Spot Ethereum ETFs logged $639M in inflows, extending an eight-day streak, while Turkey’s BtcTurk halted withdrawals after $48M in suspicious outflows. In DeFi, Aave surged toward $50B TVL, and Pantera Capital disclosed $300M invested in crypto treasury companies.
Macro jitters weigh on Bitcoin and Ether; Fed adjusts oversight framework
Crypto markets faced renewed volatility this week after hotter-than-expected U.S. producer price data revived inflation concerns and triggered more than $1 billion in derivatives liquidations. Bitcoin and Ethereum reacted sharply to the fresh PPI reading, retreating from their previous attempts to renew all-time highs. Both assets had rallied last week on expectations of a September Fed rate cut, but the PPI report raised doubts about the pace of monetary easing.
Despite the pullback, Ethereum continues to outperform Bitcoin on a relative basis, with the ETH/BTC ratio up nearly 33% over the past 30 days. Market analysts noted that social sentiment toward Ether remains subdued compared to the heightened optimism surrounding Bitcoin, suggesting more room for constructive positioning. Still, the broad liquidation wave highlighted the fragility of leveraged longs across exchanges.
In parallel, the Federal Reserve announced it will end its 2023 “novel activities supervision program” for banks engaged in crypto-related services. The oversight will be folded into the Fed’s standard supervisory process, reflecting a maturing understanding of risks but also a softer stance under the Trump administration. For institutions, this shift underscores both the enduring macro headwinds shaping digital assets and the steady integration of crypto into mainstream regulatory frameworks.
Gemini files for IPO on Nasdaq as GEMI, reveals widening losses
Gemini became the latest crypto exchange to pursue a U.S. listing, filing its S-1 to trade under the ticker GEMI on Nasdaq. The move, led by bookrunners Goldman Sachs, Citi, Morgan Stanley, and Cantor, positions Gemini to become the third publicly traded exchange after Coinbase and Bullish. However, the filing revealed weaker-than-expected financials, with a $282.5 million net loss in H1 2025 compared to $41.4 million a year earlier.
The company also disclosed a new $75 million credit line with Ripple, expandable to $150 million, drawn in Ripple’s RLUSD stablecoin. At the same time, Gemini will migrate most clients to its Florida-based “Moonbase” entity while maintaining Gemini Trust in New York, where tougher BitLicense restrictions continue to limit certain offerings. The filing emphasized staking services available across nearly all U.S. states except New York.
Gemini’s IPO attempt highlights both the opportunities and headwinds facing centralized exchanges. Going public could provide fresh capital and improve transparency, but the widening losses and regulatory complexities in key states illustrate the challenges of scaling crypto businesses under public market scrutiny.
Deribit to launch USDC-settled Bitcoin and Ether options
Deribit, the leading crypto options exchange now under Coinbase ownership, will launch linear Bitcoin and Ether options settled in USDC on August 19. The rollout extends its stablecoin-settled product line, complementing existing perpetuals and altcoin options, and will also include USDC-settled dated futures. Minimum contract sizes have been set at 0.01 BTC and 0.1 ETH to improve market accessibility.
Linear options differ from Deribit’s long-standing inverse contracts by offering payouts that track the underlying asset price directly, with settlement in fiat-equivalent stablecoins. The exchange noted that both linear and inverse contracts will offset for margin purposes, improving capital efficiency for active participants. Institutional demand for stablecoin-settled derivatives was cited as a primary driver of the expansion.
The move reflects a broader structural shift toward stablecoin settlement as institutions seek to reduce exposure to crypto price swings in collateral management. With Coinbase’s acquisition now complete, Deribit is positioned to leverage new distribution channels while maintaining its dominance in crypto options, where July volumes surpassed $185 billion.
Hong Kong regulator tightens custody rules for exchanges
Hong Kong’s Securities and Futures Commission (SFC) issued new guidelines requiring licensed exchanges to strengthen custody controls over client assets. The directive follows a review that identified weaknesses in wallet security and oversight, particularly around third-party custodians and real-time threat monitoring. The SFC said the measures take immediate effect and will form the baseline expectations for all licensed virtual asset trading platforms (VATPs).
The guidance emphasizes cold wallet infrastructure, senior management accountability, and stronger controls against cybersecurity threats. With July hacks totaling $142 million globally, regulators see custody as a core systemic risk for the sector. Industry participants noted that the new standards will likely concentrate market share among exchanges with the scale and expertise to comply.
Hong Kong’s evolving regulatory roadmap reinforces the city’s dual ambition: to attract global crypto businesses while implementing rigorous safeguards. The custody focus mirrors trends in other jurisdictions, positioning Hong Kong as a potential hub for regulated trading infrastructure despite Beijing’s ongoing ban on mainland crypto activity.
Ethereum ETFs log $639M in inflows, extend 8-day streak
U.S. spot Ethereum ETFs attracted $639.6 million in inflows on Thursday, their eighth consecutive day of positive flows. BlackRock’s ETHA dominated with $519.7 million, followed by Grayscale’s Ethereum Mini Trust and Fidelity’s FETH, which brought in $60.7 million and $56.9 million, respectively. Invesco also posted modest inflows.
The momentum follows last Monday’s record $1.02 billion single-day inflow, bringing cumulative inflows to $3.71 billion over the past eight sessions. Analysts at Standard Chartered raised their year-end ETH target to $7,500, nearly double their previous forecast.
BtcTurk halts crypto transfers after $48M outflows
Turkey’s oldest crypto exchange, BtcTurk, suspended crypto deposits and withdrawals after blockchain analytics firm Cyvers flagged $48 million in suspicious transfers across multiple chains. The platform said the issue was linked to hot wallets and that lira trading remains unaffected. Most of the stolen funds were consolidated into two addresses, with the attacker actively swapping assets.
This is not the first time BtcTurk has been targeted. In June 2024, the platform disclosed unauthorized withdrawals from hot wallets, with Binance freezing over $5.3 million at the time. The recurrence of suspicious activity raises questions about internal security protocols and oversight practices at Turkey’s leading exchange.
The incident underscores the persistent counterparty risk in unregulated venues. With Turkey emerging as a major retail crypto market, operational lapses at leading exchanges highlight the importance of regulated custody standards and may accelerate domestic calls for stronger oversight.
Aave’s TVL nears $50B, cementing DeFi lending leadership
Decentralized lending protocol Aave has grown its total value locked from $8 billion at the start of 2024 to $47 billion today, cementing its role as the backbone of DeFi credit markets. The surge reflects both retail and institutional adoption of permissionless lending, with Aave now commanding roughly 80% of outstanding debt on Ethereum.
The platform’s structure allows users to lend, borrow, and redeploy capital seamlessly, with transparent smart contracts providing visibility into terms and risk. Tokenized deposits have fueled liquidity by enabling simultaneous lending, collateralization, and participation in other DeFi strategies. Aave’s unique borrower base has also expanded, with over a thousand active participants.
Aave’s growth demonstrates that DeFi lending is no longer experimental infrastructure. Its scale and efficiency position it as a credible alternative to traditional credit channels, offering globally accessible lending products with transparency and composability unmatched by banks.
Pantera Capital invests $300M in crypto treasury companies
Pantera Capital disclosed it has invested more than $300 million into digital asset treasury (DAT) companies, a growing segment of public firms that actively hold crypto reserves. The firm argues that DAT structures can outperform spot holdings and ETFs by generating yield to grow net asset value per share, effectively increasing token ownership over time.
Pantera’s portfolio spans eight tokens — including Bitcoin, Ethereum, Solana, and BNB — and covers firms in the U.S., U.K., and Israel. Highlighted was BitMine Immersion, which has rapidly built the world’s largest ETH treasury with 1.15 million ETH worth $4.9 billion. BitMine’s share price surged from $4.27 in June to $51 in August, driven by staking rewards, issuance above NAV, and Ethereum’s rally.
Pantera’s strategy validates DATs as a new investable category at the intersection of corporate treasuries and digital assets. With more than 150 public entities now holding crypto on balance sheets, the growth of DATs reflects Wall Street’s structural shift toward tokenized balance-sheet exposure as part of diversified capital strategies.
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