Crypto markets logged a volatile seven-day stretch that combined a sharp rally with a sudden, leverage-driven selloff. Total crypto market capitalization rose 22% in the week ending August 2223, the strongest weekly performance in more than two years, even as a brief flash crash erased about $108 billion in minutes and set off roughly $5 billion in liquidations. Bitcoin finished the week around $77,000–$78,000 after briefly hitting intraday highs near $79,000–$80,000, posting its best weekly gain since March 2024. The advance spread across the market, with several major tokens outperforming. Two developments were widely seen as key drivers. A U.S. Treasury buyback announcement was interpreted as a favorable liquidity signal. Separately, renewed optimism around the Clarity Act—Washington's evolving regulatory framework for digital assets—helped lift sentiment after months of policy uncertainty. Positioning added fuel. Short sellers were forced to cover as prices climbed, amplifying the move. Altcoins reacted more aggressively than Bitcoin: XRP gained roughly 46%–51% on the week, while Ethereum rose about 27%, beating Bitcoin on a percentage basis and suggesting the rally had broader participation. The surge was interrupted on August 22, when the market sold off abruptly. Total crypto market cap dropped by around $108 billion within minutes. More than $500 million in long positions were liquidated in the first hour; over the next 24 hours, liquidations rose to about $1.7–$1.8 billion. Across the broader episode, total liquidations approached $5 billion. Over the week, total crypto market capitalization swung between roughly $2.5 trillion and $2.74 trillion. Prices recovered after the flash crash, underscoring how quickly conditions can flip when leverage is elevated and liquidity thins. For traders, the episode highlighted the risks of oversizing leveraged exposure. The bulk of the $5 billion in liquidations hit leveraged longs—traders aligned with the broader uptrend but forced out by aggressive positioning ahead of the rebound. XRP's 46%–51% jump also stood out as a signal of renewed appetite for altcoins, with investors willing to deploy capital into an asset still associated with past regulatory friction—an indication of greater confidence in a shifting policy backdrop.

The Securities and Exchange Commission has issued subpoenas to several leading Wall Street banks seeking information on their dealings with Situational Awareness, an artificial intelligence hedge fund that came close to collapsing last month, according to three people familiar with the requests cited by The New York Times. Regulators are requesting trade-timing data and communications related to lending, including messages exchanged with the San Francisco-based firm about borrowed funds. The SEC has not accused the fund of wrongdoing. The subpoenas were sent to banks that cleared Situational Awareness' trades and financed its positions. Bank of America, Citi, Goldman Sachs and JPMorgan Chase were among the fund's largest counterparties, according to a regulatory filing. Investigators also instructed the banks to preserve all records connected to the firm. The four banks declined to comment, as did the SEC. A spokesperson for Situational Awareness said the level of scrutiny was unsurprising for a high-profile fund that delivered strong returns or suffered sharp drawdowns. The inquiry comes as bank executives raise concerns about hard-to-see leverage in markets. JPMorgan CEO Jamie Dimon warned this month that margin debt has reached record levels. At its peak, Situational Awareness managed more than $30 billion and borrowed tens of billions more. The fund was founded roughly two years ago by Leopold Aschenbrenner, a 24-year-old former OpenAI researcher. Filings indicate the strategy became significantly more aggressive ahead of the break: protective put options valued at $8.5 billion in March had largely vanished by June 30, replaced by $12.5 billion in outright long positions. In late July, AI-linked stocks declined while the traditional technology names the fund had shorted rose. Margin calls followed, the portfolio dropped about 67%, and Citadel purchased the public book at roughly a 10% discount. Some of the forced unwind spilled into crypto-related equities. Mining stocks had grown to about a quarter of the portfolio, reaching $1.99 billion in the final 13F filing. Core Scientific, Riot Platforms and IREN were among the largest positions. Citadel has since worked through the miner overhang via nearly 100 block trades. An SEC investigation at this stage may not lead to an enforcement case, but the material gathered could illuminate how long banks continued financing a concentrated AI trade before tightening credit. Situational Awareness still holds a stake in Anthropic, which is considering a public listing; that position now appears to be the most visible marker of what remained after July.

UPDATE: Crypto derivatives liquidations reached $439M over the past 24 hours. Long positions accounted for $221M, while short liquidations totaled $218M, leaving the two sides nearly evenly split.

The US Treasury will double the maximum size of its liquidity-support buybacks for long-dated debt while leaving its regular auction schedule unchanged. In a statement released Aug. 19, the Treasury said it will lift maximum buyback sizes from $2 billion to at least $4 billion per operation for nominal coupon securities with maturities of 10 to 30 years. The expanded operations begin Sept. 9 and run through Nov. 4. Auction sizes remain steady. In its Aug. 5 quarterly refunding announcement, the Treasury reaffirmed unchanged issuance of $58 billion in 3-year notes, $42 billion in 10-year notes and $25 billion in 30-year bonds, for a total of $125 billion. Of that total, about $96.3 billion will be used to refinance maturing securities, while $28.7 billion represents net new borrowing. The buybacks focus on "off-the-run" Treasuries—older issues that typically trade less frequently than the latest benchmarks. Over time, these securities can become less liquid, accumulating on dealer balance sheets and hindering market functioning. Longer-dated Treasuries have faced sustained pressure since late June, as some market participants have pointed to a buyers' strike in long-duration debt. Softer demand for 10- and 30-year bonds can leave dealers holding more inventory than desired, straining balance sheets and reducing overall market efficiency. By buying older bonds from dealers at competitive prices, the Treasury aims to ease balance-sheet constraints and support participation in new auctions. The move builds on the liquidity-support buyback framework introduced in 2024. The decision to raise maximum sizes follows what the Treasury has described as strong dealer engagement and high-quality offers in earlier operations. After the announcement, yields on longer-dated Treasuries fell, a move traders interpreted as a signal of the Treasury's intent to help maintain orderly conditions at the long end of the curve. With auction sizes steady and buybacks larger, net long-dated supply available to the market could tighten as the government absorbs more older paper.

Bernstein set a $140 price target on Circle, citing a sharp pickup in USDC issuance. USDC supply increased by $2 billion over the past week.

ChainThink reported that Cointelegraph said on Aug. 25 that investment bank Bernstein reaffirmed its Outperform rating on Circle (CRCL) and kept its price target at $140, implying roughly 60% upside. Circle shares have gained about 40% over the past month. Bernstein analysts pointed to signs of "digital dollar reinflation", noting USDC supply jumped by around $2 billion over seven days, reversing six months of stagnation. The bank expects the next leg of stablecoin growth to be supported by a broader crypto market recovery, improved regulatory clarity, expansion of tokenized capital markets, and wider use in payments. It also cited early indications that AI agents are beginning to use stablecoins for payments. USDC's market capitalization remains smaller than USDT's, but its trading activity has accelerated. Bernstein said USDC's share of adjusted stablecoin trading volume has climbed from about 40% in 2025 to more than 60% so far in 2026, overtaking USDT on that measure.

U.S.-listed spot Bitcoin and Ethereum ETFs posted a sharp jump in assets under management last week, with most of the increase driven by rising token prices rather than fresh subscriptions, CoinDesk reported. Data for the week ended Aug. 21 show combined net inflows of about $2.6 billion across the two ETF groups, while total AUM climbed roughly $23.3 billion. SoSoValue figures indicate spot Bitcoin ETFs took in $1.92 billion of net inflows for the week, and spot Ethereum ETFs added $697.2 million, bringing total net inflows to approximately $2.6 billion. It was the strongest week for both product categories since October 2025. AUM for spot Bitcoin ETFs rose to $96.1 billion from $76.6 billion, a weekly increase of 25.4%. Ethereum ETF AUM grew to $14.3 billion from $10.5 billion, up 35.9% on the week. Together, the products expanded by about $23.3 billion. After subtracting the $2.6 billion in net inflows, roughly $20.7 billion of the week's AUM growth is attributed to the appreciation of assets already held by the funds. Bitcoin rallied from around $62,000 to briefly above $79,000, a weekly gain of about 24%. Ethereum advanced from below $1,900 to above $2,500, up roughly 30% on the week. The move lifted the market value of ETF holdings. CoinDesk cited three main catalysts behind the rally. The U.S. Treasury doubled the size of its long-term Treasury buyback program, a move described as weakening the dollar and boosting demand for inflation-hedging assets. The report also pointed to Trump's meeting with crypto industry executives at the White House and his call for Congress to advance the Clarity Act. In addition, short covering added momentum as prices cleared key levels. The report said about $3 billion in short positions were liquidated within 24 hours, followed by another $1 billion the next day, with forced buying contributing to further gains. Despite last week's surge, the year-to-date funding picture remains negative. CoinDesk reported that Bitcoin ETFs are still showing net outflows for 2026, and Ethereum ETFs also remain in net outflow territory. Combined year-to-date net outflows for the two product groups have narrowed to $3.1 billion from $5.7 billion.

China on Aug. 24 opened applications for an 800 billion yuan (about $119 billion) policy-backed financing facility, formally kicking off what is seen as Beijing's most forceful quasi-fiscal stimulus in years. The program is intended to provide equity-like capital to qualifying infrastructure and high-tech manufacturing projects, with the initial injection designed to catalyze larger volumes of bank and private-sector funding. The new facility expands on a 500 billion yuan version introduced in 2025. The 300 billion yuan increase represents a 60% enlargement, underscoring policymakers' concerns over weak fixed-asset investment and subdued private investment. The tool sits between direct fiscal spending and traditional lending. Local governments are tasked with compiling lists of eligible projects and submitting them through a centralized approval process for sign-off in Beijing. Caitong Securities estimates the facility could ultimately underpin roughly 10 trillion yuan in total project investment, implying leverage of around 13:1. The program was announced in March 2026, giving localities months to prepare pipelines of eligible projects. The sector focus mirrors Beijing's industrial policy priorities, including advanced technology and AI-related capacity building. Caitong analysts expect disbursements to lag the application opening by at least a month, narrowing the time window for the initiative to lift construction activity and output over the remainder of 2026. Goldman Sachs estimates a baseline GDP boost of about 0.5 percentage points, concentrated in late 2026 and early 2027. Caitong projects only around 2 trillion yuan of incremental economic support will show up in 2026, citing procedural frictions and a limited pool of bankable projects. Authorities have also rolled out supplemental measures. A central-government interest subsidy of 1.5 percentage points will support small and medium-sized enterprises, capped at 50 million yuan per company. In addition, a 500 billion yuan private-investment guarantee facility has been set up to encourage funding from non-state investors.

Canada's shortage of clean electricity is putting as much as $220 billion of potential investment at risk, underscoring the scale of capital required across the country's power system. Against that backdrop, utility Capital Power reported second-quarter adjusted funds from operations of $328 million and lifted its quarterly dividend by 2%, extending its dividend-growth streak to 13 consecutive years. The company has also secured Meta as a long-term customer, highlighting the premium value of clean-power assets in a tight supply environment.