Markets were briefly shaken by speculation around Federal Reserve leadership, triggering swift reactions in the dollar and bond yields. Yet amid this uncertainty, one signal stood out: institutional demand for crypto appears to be strengthening meaningfully.
Ethereum ETFs recorded their highest daily trading volume since launch, exceeding $2.5 billion, which coincided with a technical breakout in ETH/USD and ETH/BTC. This surge in institutional activity suggests a growing appetite for crypto exposure, even as broader macro conditions remain fragile.
🌍 Market Recap & Macro Overview:
Wednesday's intraday chaos perfectly illustrated how sensitive markets have become to Federal Reserve leadership uncertainty. The dollar plummeted in minutes, while Treasury yields spiked above 5.05% before retreating.
Markets Plunged When Powell Firing Looked Likely (Source: Bloomberg)
This knee-jerk reaction highlights the market's hypersensitivity to any hints of monetary policy disruption. As we noted in Wednesday morning’s Market Report, hours before the headlines broke, any Fed leadership uncertainty would be a major risk trigger.
Dollar Rebounds After Fed Drama (Source: Bloomberg)
Following the initial shock, the dollar has shown resilience, climbing back from its Wednesday lows and staging what appears to be a technical rebound. However, this recovery shouldn't fool anyone into thinking the broader bearish dollar trend has reversed.
The Dollar Has Tumbled 8% so Far This Year (Source: Bloomberg)
The rebound from around 1180 to near 1200 represents a natural pullback within the context of the longer-term downtrend we've been tracking, and while the dollar has rebounded from Wednesday's lows, the bigger picture tells a much different story, the greenback is down approximately 8% year-to-date.
S&P 500 Hovers Near All-Time Highs (Source: Bloomberg)
Equity markets have largely shrugged off the Fed-related volatility, with the S&P 500 continuing its relentless march in record territory. This strength reflects the market's growing confidence in the "soft landing" narrative and the belief that peak hawkishness from the Fed is behind us. For crypto investors, this equity strength provides important confirmation that the broader risk-on environment remains intact.
US Ethereum ETFs Log Record Trading Volume (Source: Bloomberg)
The real story last week was the explosive activity in Ethereum ETFs, which logged their highest daily trading volume since launch. The spike to over $2.5 billion in daily volume represents a watershed moment for institutional crypto adoption and this surge in activity coincides perfectly with Ethereum's technical breakout, suggesting that institutional money is finally beginning to flow into crypto assets in meaningful size.
