Flows into digital asset investment products have become highly sensitive to changes in US Federal Reserve interest rate expectations. Approximately $100 million exited digital asset investment products after Fed Chair Kevin Warsh’s Jackson Hole speech, as markets sharply increased the probability of a September rate hike. Flows reversed over the following week, reaching $1 billion by September 4, following comments from Fed Governor Christopher Waller signaling signs of disinflation. Bitcoin climbed from the low $60,000s to above $80,000 in August, driven partly by the US Treasury doubling its bond buyback program. Standard Chartered forecasts that Bitcoin could reach $100,000 before the end of the year.
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