Bitcoin and Ethereum ended the Aug 3-7 trading week higher, with the world’s two largest cryptocurrencies benefiting from improving risk appetite, softer US labour data and renewed attention on digital asset regulation.
Bitcoin began the week trading around the US$63,500 level before gradually pushing higher. By Aug 7, the cryptocurrency was trading at about US$64,900, approaching the US$65,000 mark and representing a gain of roughly 2% over the period.
Ethereum followed a similar trajectory as it traded around US$1,855 at the start of the week before rising towards US$1,886 by Aug 7, an increase of about 1.7%. While both major cryptocurrencies strengthened, Bitcoin slightly outperformed Ethereum during the period.
The rebound came alongside stronger sentiment across traditional risk assets where US equities rallied at the start of the week as optimism over a possible easing of tensions surrounding Iran and the Strait of Hormuz sent oil prices lower and pulled down Treasury yields. On Aug 3, the Dow Jones Industrial Average climbed 1.3% to a record close, while the Nasdaq gained more than 2%.
Momentum moderated later in the week, but Bitcoin remained resilient, holding near US$64,400 on Aug 6 before moving closer to US$65,000 the following day.
The weaker-than-expected US employment report on Aug 7 provided another supportive signal for risk assets. The US economy unexpectedly lost 23,000 jobs in July compared to expectations for an increase of about 83,000. Treasury yields and the US dollar subsequently declined, while market expectations for a Federal Reserve rate increase in September were scaled back.
Crypto investors were also watching Washington closely as the Aug 7 deadline approached for progress on the Digital Asset Market Clarity Act. The Senate ultimately headed into its August recess without holding a full vote, leaving the landmark crypto market-structure legislation to be revisited in September.
For Ethereum, institutional product developments provided an additional point of interest. Grayscale has been preparing amendments to its Ethereum staking product that would allow net staking rewards to be distributed to shareholders in cash on a regular basis, potentially strengthening the appeal of regulated Ethereum exposure.
Overall, the week marked a modest recovery rather than a decisive breakout. Bitcoin’s return towards US$65,000 and Ethereum’s move towards US$1,900 showed improving sentiment, but macroeconomic data, US interest-rate expectations and regulatory developments remain key factors likely to determine whether the recovery can extend further.
