What You Need to Know:

• Bitcoin’s volatility has reached several month lows, with traders gearing up for significant movements following U.S. inflation data and the Federal Reserve’s rate decision.
• Prediction markets show strong support for a 25-basis-point rate cut by the Fed, with October expectations split between an additional cut or a pause.
• Gold prices are surging to all-time highs amidst expectations of the Fed’s rate cuts, while U.S. stock indices have shown record highs despite substantial job revision numbers.

Good Morning, Asia! Here’s the Market News:

Welcome to Asia Morning Briefing, your daily digest of key developments during U.S. hours, including market updates and analyses. For a detailed view of U.S. markets, check out CoinDesk’s Crypto Daybook Americas.

Bitcoin hovers near $111,000, with volatility compressed to multi-month lows—a calm phase often seen before significant movements. Traders brace for September’s U.S. inflation data and the Fed’s rate decision the following week.

Prediction markets are highly biased toward easing; with Polymarket bettors assigning an 82% chance of a 25-basis-point cut on Sept. 17, leaving minimal possibilities for a larger change or no modification at all. Following that, forecasts for October are divided, with nearly equal probabilities for another reduction or a pause. This divergence elucidates why current tranquility is likely temporary.

‘Markets frequently appear calm just before they move. Bitcoin shows one of its tightest trading ranges in months, and overall volatility across crypto is at multi-month lows,’ stated Gracie Lin, CEO of OKX Singapore. ‘With U.S. inflation data, especially Core CPI, being released on Sept. 11 along with the Fed’s anticipated rate decision on the horizon, this tranquil phase appears to be setting the stage for the next major proceedings.’

When the Fed implements a cut, the lower money-market returns will raise the opportunity cost of holding cash, which may prompt market flows toward crypto.

‘The current discussion is no longer whether rate cuts will happen, but whether liquidity will channel into BTC, ETH, and other riskier assets,’ the market-making firm Enflux informed CoinDesk.

In summary, while the Fed’s decision might dominate the news, the core trade revolves around whether sidelined cash shifts towards digital assets—a transition that could reignite market volatility.

Market Movement:

• BTC: Bitcoin experienced a slight dip, trading within a range of approximately $110,812 to $113,237, indicative of short-term volatility and shifting investor sentiments amid larger market dynamics.
• ETH: ETH showed a moderate increase, fluctuating between approximately $4,279 and $4,379, reflecting solid demand and rejuvenated investor interest, albeit within a restricted range due to modest ETF flows and traders awaiting the Fed’s upcoming decision.
• Gold: The commodity is rallying to unprecedented heights, driven by increasing expectations of interest rate cuts from the U.S. Federal Reserve, a depreciating U.S. dollar, and renewed demand as a safe haven.
• Nikkei 225: Asian-Pacific stocks generally opened higher, with Japan’s Nikkei 225 gaining 0.2%, as investors awaited China’s expected inflation figures showing a CPI decrease of 0.2% and smaller PPI decline of 2.9%.
• S&P 500: U.S. markets closed at all-time highs, with the S&P 500 up 0.27% to 6,512.61, as investors overlooked a record payroll revision that slashed 911,000 jobs from previous reports.