Bitcoin Traders Jittery Ahead of Powell's Jackson Hole Speech
Spot Bitcoin and Ether exchange-traded funds in the US have logged four straight sessions of outflows, with investors pulling a net $1.9 billion, according to data compiled by Bloomberg.
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A broad rally in cryptocurrencies drove Bitcoin to a record on Aug. 14, while pushing Ether to within touching distance of its own all-time high. That momentum — fed by an array of corporate crypto accumulators built in the mold of Michael Saylor's Strategy — now appears to be dwindling.
Options activity shows traders turning defensive. The put-to-call ratio for Aug. 22 contracts jumped to 1.33 on Deribit, the derivatives exchange, with $3.8 billion in Bitcoin options expiring. The largest open interest is in $110,000 puts, signaling concern over a near-term pullback as traders seek downside protection. Put options offer downside insurance by giving contract holders the right to sell at a certain price.
'What the put-call ratio tells you is that, given high expectation of rate cuts in Sept., the market is more sensitive to the risk of Powell sounding hawkish than dovish,' said Peter Chung, head of research at Presto. 'The market gyrations over the last few days is the result of investors positioning themselves for an uncertain outcome of the speech.'
Bitcoin fell 0.7% to $113,624 as of 9:45 a.m. in London, extending its retreat to 9% from its record of $124,514. Ether, the second-largest token, slid 1.6% to $4,288.
President Donald Trump has repeatedly criticized Powell's cautious approach to rate cuts. Treasury Secretary Scott Bessent recently said he expects Trump to announce Powell's replacement by year-end, making Friday's Jackson Hole address likely his last as Fed chair.
Minutes from the Fed's last policy meeting, released yesterday, underscored that officials still see inflation risks as outweighing employment concerns, even as new tariffs are expected to take time to feed into the economy. That backdrop has reinforced bets that Powell's tone could temper hopes for aggressive easing.
'The FOMC meeting minutes released overnight indicated that the impact of new tariffs is expected to take time to materialise. Additionally, a majority of members viewed inflation risks as outweighing employment risks, signalling a continued cautious stance on rate cuts,' said Tony Sycamore, analyst at IG Australia Pty.
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