Fed Shock Hits Bitcoin ETFs as SEC Crypto Rules Draw Strategy Back

Bitcoin closed August under pressure on Monday, settling near $77,668 after Federal Reserve Chair Kevin Warsh used his Jackson Hole address to signal that rate hikes remain on the table. The hawkish tone pushed Treasury yields higher and forced crypto traders to abandon rate-cut expectations that had powered a strong mid-month rally. U.S. spot Bitcoin ETFs posted $201.8 million in net outflows on Friday, snapping a nine-day inflow streak and pulling total fund assets back below $100 billion.

The reversal came just days after Bitcoin had briefly touched a three-month high of roughly $81,455. Ethereum fell harder than Bitcoin, losing 1.62% to $2,418, while Solana dropped 3.57% to $101.88 and XRP declined 2.67% to $1.3595. The expiry of approximately $6.4 billion in Bitcoin options added short-term volatility, though the market stabilized above $77,000 ahead of the new trading week.

SEC Proposes First Bespoke Crypto Offering Framework

On the regulatory front, the SEC's proposed Regulation Crypto Assets framework continued to draw industry attention ahead of its October 20 comment deadline. Published August 18, the proposal would create a fit-for-purpose regime allowing certain crypto investment contracts to be offered without full Securities Act registration. The commission described the move as its first dedicated crypto offering regime after nearly a decade of relying on informal guidance and enforcement actions.

Meanwhile, Strategy signaled a return to accumulating Bitcoin after a 10-week pause, with Michael Saylor posting a cryptic hint that fueled speculation the firm was back in buying mode. Its 840,447 BTC position sits roughly $2.8 billion above cost. On the same day, Ethereum ETFs pulled in $226 million in a single session, nearly matching their Bitcoin counterparts, and the Bitwise Solana ETF crossed $1 billion in assets under management, marking the first Solana fund to reach that milestone.