KuCoin Ventures’ latest weekly report describes a crypto market being pulled between rising inflation and oil prices, which are increasing expectations for Federal Reserve rate hikes, and a divided spot ETF market. Bitcoin ETF flows have weakened sharply, while Ethereum products continue to attract fresh capital. The report identifies resilient institutional demand for ETH exposure as a potential support and a higher-for-longer interest-rate environment as a risk that has already reduced liquidity in major crypto ETF products.

Inflation and Oil Prices Raise Rate-Hike Expectations

The report’s central macro theme is a supply-driven inflation shock. Brent crude briefly exceeded $100 per barrel in late July 2026 after simultaneous shipping disruptions in the Strait of Hormuz and the Red Sea, according to KuCoin Ventures. Related coverage is available in BTSE Launches Crypto Platform in Indonesia.

The oil-price increase fed into expectations for Federal Reserve policy. CME FedWatch pricing placed the probability of a 25-basis-point hike at the July 29 FOMC meeting at 36.3%, up from 14.4% a week earlier as concerns about oil-driven inflation intensified. Related coverage is available in KuCoin Launches Integrated Earn-and-Loan Product.

Under Chair Kevin Warsh, the Federal Reserve has kept the federal funds rate at 3.50%-3.75% for five consecutive meetings, although the report says the institution’s hawkish tilt is strengthening. Three of the 12 FOMC members voted for an immediate hike at the July meeting. CME FedWatch pricing showed September hike odds near 64.5% as of August 3, according to a follow-up KuCoin Ventures report. Related coverage is available in Taiwan Travel Rule for Crypto Transfers Planned for….

Pressure remained by mid-September. Brent crude reached as high as $109 per barrel, while 10-year Treasury yields climbed to roughly 4.94%, CoinDesk reported in Rising Yields, Oil Prices Leave Bitcoin Vulnerable Ahead of U.S. Inflation Report. Bitcoin was trading near its 50-week exponential moving average (EMA). The broader Federal Reserve, Bank of England and Bank of Japan policy calendar is also being monitored for its potential effect on the crypto market, as outlined in Fed, BOE and BOJ Rate Decisions Shape the Crypto Week Ahead.

Bitcoin ETF Activity Weakens as Ethereum Products Attract Capital

The report highlights a sharp divergence between the two leading spot crypto ETF categories. Spot Bitcoin ETF weekly trading volume fell to approximately $8.05 billion during the week of July 28, the lowest level for a full trading week since October 2024. Net inflows totaled only $33.79 million. Because spot ETFs provide a regulated market vehicle for gaining exposure to the underlying assets, their flows are being used in the report as an observable indicator of changing institutional positioning, although they do not capture every source of crypto-market demand.

The week ended particularly weakly. BTC ETFs recorded net outflows of approximately $225 million on Thursday and $240 million on Friday. BlackRock’s IBIT alone lost about $95.5 million on the final day.

Spot Ethereum ETFs produced the opposite result. They recorded approximately $103 million in net inflows during the same week, led by BlackRock’s ETHA with $96.3 million. Total ETH ETF net assets rose to $10.17 billion, making the inflows the report’s clearest counterpoint to the slowdown in Bitcoin ETF activity.

The report presents two interpretations. Lower BTC ETF volume may indicate that institutions are reducing exposure as interest-rate risk is repriced. At the same time, concentrated ETH inflows suggest that institutional demand has not disappeared entirely but may be selective. BlackRock’s leading position in both categories also highlights the extent to which crypto ETF flows are concentrated among a single issuer.

Market Indicators and Factors to Monitor

Market indicators remain mixed. Total crypto market capitalization was near $2.638 trillion, down approximately 3% on the day, while Bitcoin dominance stood at 58.33%. Retail sentiment remained positive: Bitcoin traded around $76,827, down 1.18% over 24 hours, and the Crypto Fear \u0026 Greed Index was 69, or “Greed,” according to Alternative.me. The report said this could indicate that market sentiment had not fully reflected the risk of further rate hikes.

The report identifies three areas to monitor: the upcoming U.S. inflation release and its effect on Federal Reserve pricing; whether ETH ETF inflows remain resilient if oil prices and Treasury yields continue rising; and Bitcoin’s 50-week EMA, which it identifies as a potential vulnerability point. Higher capital costs are also changing how crypto projects operate, echoing signs discussed in Crypto Companies Leave the Hype Cycle as Earnings Show Discipline.

The policy outlook could still change. Federal Reserve Governor Christopher Waller has said he would support holding rates in September if August inflation improves. That position provided a dovish counterpoint and briefly pushed rate-hike odds back toward 50%.

The complete data set is available in KuCoin Ventures’ analysis, Fractures in AI, Debt, JPY Fluctuations and the Battle for Existing Crypto Liquidity. KuCoin’s own product activity, including its integrated earn-and-loan offering, is another area being tracked in the exchange sector.

Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. Cryptocurrency and digital asset markets carry significant risk. Always conduct your own research before making decisions.