Bitcoin and the broader crypto market continued to decline yesterday. With no singular reason for this correction, the market remains focused on news regarding President Trump and the Fed.

Market Overview

On Friday (August 29th, US), US equities saw declines across all three major indices, with the Nasdaq dropping the most at 1.15%, although the S&P 500 had reached a new all-time high in the previous session. Gold futures saw a slight increase to $3516 per ounce. Oil hovered around $64 per barrel.

Next week, the market will receive important economic news, including employment data. If the jobs report is positive, it might initially lead to a negative market reaction, but then stabilize. Conversely, if the jobs report is negative, the initial reaction might be positive, but it could later trigger new concerns about a recession.

Bitcoin dropped to around $108,000. Most major altcoins traded sideways or saw slight declines. The overall crypto market capitalization stood at $3.85 trillion.

US BTC spot ETFs saw outflows of $126.7 million on Friday, with only BlackRock's IBIT fund seeing inflows of $24.6 million. ETH spot ETFs also saw outflows of $164.6 million.

A Bitcoin whale, after previously selling 24,000 BTC, has now transferred an additional 10,000 BTC. Of this amount, 2,000 BTC were swapped for Ethereum, while the whale still holds approximately 146,380 BTC. This indicates a move to take advantage of altcoin growth rather than selling to stablecoins.

In the past 24 hours, $461 million in long positions and $96 million in short positions were liquidated, which is significantly lower than previous large liquidation events. Some hours saw up to $105 million in liquidations, but the current price drop is not considered unusual. Recent volatility is primarily due to supply-and-demand dynamics and whale trading activity, not specific news or events.

Appeals Court Rules Trump's Tariffs Unlawful

A federal appeals court has ruled that most of the global tariffs imposed by President Donald Trump are illegal, marking the second consecutive defeat for the Trump administration in the V.O.S. Selections case. The lawsuits were filed by 12 states and 5 small businesses affected by the tariffs.

The appeals court ruled that the power to impose tariffs lies with Congress, not the President. The hearing involved 11 of the 12 judges of the Federal Appeals Court. The 12th judge, Pauline Newman, 98, was suspended in 2023 due to a dispute over a request for a cognitive ability examination, so she did not participate in the case.

Additionally, seven judges concluded that the tariffs exceeded the authority granted by the International Emergency Economic Powers Act (IEEPA), as they were applied to most US imports at high, constantly changing rates with no end date. The four dissenting judges disagreed and supported President Trump's position. The Appeals Court has temporarily stayed the ruling until October 14th to allow Trump to appeal to the Supreme Court.

President Trump called the decision "biased" and said that lifting the tariffs would "destroy America." The White House also emphasized that the tariffs remain in effect and expects a final victory. Lawyers representing the plaintiffs, including small businesses, argue that the ruling protects American consumers and businesses from instability and damage from illegal tariffs, while reaffirming the principle that the President must act within the bounds of the law.

Meanwhile, newly released US economic data shows that the August PCE inflation rate remained at 2.6%, in line with forecasts, while core PCE saw a slight increase from 2.8% to 2.9%, similar to the CPI. These figures are considered neutral, not surprising, and reinforce expectations of a potential interest rate cut in September. The market now estimates an 87.5% probability of a Fed rate cut this month, with only a 12.5% chance of rates remaining unchanged.

Fed Governor Chris Waller continues to advocate for a rate cut, favoring a 25 basis point (0.25%) reduction but remains open to larger cuts if the labor market continues to weaken. He emphasized that acting early is necessary, because if they wait until job weakness becomes clear, the impact on the economy would be too late. The current interest rate is still about 1.5% higher than the neutral rate, and according to Waller, rates need to be reduced from 4.5% to around 3% in the next 3–6 months.

Opinions within the Fed are currently split between those appointed under President Trump and those appointed under President Biden. One side advocates for waiting to see the real impact of inflation, while the other pushes for an early rate cut to support the economy. The final ruling on Trump's tariffs will directly influence market sentiment: if the tariffs are lifted, inflationary pressure will decrease, which is positive news for the market; if they are upheld, things will not change significantly.

Updates on Trump's Case Against Fed Official Lisa Cook

The case involving Fed Governor Lisa Cook has not yet been resolved. President Trump wants to fire her based on mortgage fraud allegations presented by Federal Housing Finance Agency Director Bill P., concerning three properties with inconsistent filing information.

FHFA Director Bill Pulte has filed a second criminal complaint against Fed Governor Lisa Cook. Here is the evidence he presented:

• Cambridge, Massachusetts (2021): Cook allegedly took out a mortgage for an apartment as a "second home," but subsequent filings (2021–2025) declared it as "rental/investment property." This could have allowed her to benefit from a lower down payment and a lower interest rate than for a rental property.
• Atlanta, Georgia: She declared this as her primary residence from 2022–2025, but evidence suggests the property was being rented out.
• Ann Arbor, Michigan: In a 2025 filing, she declared this as her personal residence, but it is also likely to be a rental property.

Director Bill Pulte claims these are false and inconsistent statements made to the US Government regarding her assets and mortgages while serving as a Fed Governor. The court hearing regarding her dismissal has taken place, but the judge has not yet issued a decision. Lisa Cook's lawyers argue that even if the allegations are true, they are unrelated to her ability to perform her job at the Fed, and therefore her dismissal may be politically motivated. The case could be escalated to the Supreme Court to determine whether President Trump has the authority to fire Lisa Cook. The outcome will directly affect her voting rights in the September 17th Fed meeting, as well as the majority control of the Fed Board if she is dismissed.

Overall, the situation remains unclear, and further legal decisions need to be monitored.

Other Key Crypto & Market Updates

Nate Geraci shared that most money laundering from China goes through US banks, not just crypto. Since 2000, nearly 300 banks have been fined, but these cases are often less scrutinized and result in minor penalties, while crypto cases like Binance are handled more severely with billions of dollars in fines and the former CEO going to prison. He emphasized the unfairness when money laundering in crypto receives significantly more attention than in traditional banking.

Currently, numerous ETFs are awaiting approval, including applications from 21Shares and around 92 other funds, covering Bitcoin, Ethereum, Solana, XRP, and various derivatives ETFs. The final deadline for SEC decisions is October–November 2025, and it's highly likely that many ETFs will be approved simultaneously when clear directives are given. No new ETFs have been approved yet, but October–November is seen as a crucial decision period.

In 2025, Liquid Restaking protocols on Ethereum have seen a massive surge, with a total value locked of $30 billion. This trend allows users to stake Ethereum but still use the resulting tokens to participate in DeFi, maximizing returns, unlike traditional staking which simply locks up tokens. The benefits include convenience and not having to run a validator yourself, but risks include smart contract vulnerabilities or the staking provider's misconduct, which could lead to the loss of staked Ethereum.

Sources

• Bloomberg
• CoinDesk
• U.S. Treasury
• TradingView
• Reuters
• SEC
• White House Press Office
• CryptoQuant
• The New York Times
• Fox Business
• The Wall Street Journal
• The Financial Times
• The Federal Appeals Court
• CME FedWatch Tool
• Representative Anna Paulina Luna (X/Twitter)
• Nate Geraci (ETF Consultant)
• Circle Official Announcements
• 21Shares
• Grayscale
• Vanguard
• Bitwise

Disclaimer

This article is for informational purposes only and should not be considered financial advice. Please do your own research before making investment decisions.