Bitcoin News Today: Crypto Market Drops 1.1% as Investor Caution Rises Ahead of Powell Speech

The crypto market experienced a broad downturn on August 20, 2025, with the majority of the top 100 coins trading in negative territory. The total market capitalization dropped by 1.1%, settling at $3.91 trillion, while trading volume reached $161 billion. Only 12 coins in the top 100 showed gains, with Solana (SOL) and Tron (TRX) leading the pack with increases of 1% and 0.6%, respectively. However, the top-performing assets remained modest compared to the losses, with Ripple (XRP) falling by 3.7% and Cardano (ADA) and Provenance Blockchain (HASH) losing 7.6% and 6.8% respectively [1].

Bitcoin (BTC) declined by 1% to $113,729, while Ethereum (ETH) dropped 0.6% to $4,202. Both remain below their recent all-time highs but continue to outperform the broader crypto market. Analysts attribute the decline to investor caution ahead of the US Federal Reserve Chair Jerome Powell’s speech scheduled for later in the week. The market’s reaction to macroeconomic signals, particularly those related to US monetary policy, is expected to play a significant role in the near-term direction of crypto assets [2].

The US spot ETFs for Bitcoin and Ethereum also saw the highest outflows since the start of the month. Bitcoin ETFs lost $523.31 million, led by Fidelity’s outflow of $246.89 million. Similarly, Ethereum ETFs lost $422.30 million, with Fidelity again leading at $156.32 million. These outflows reflect a shift in investor sentiment amid growing uncertainty in the market [3].

Market sentiment, as measured by the crypto fear and greed index, declined to 45, the lowest since late June. This indicates a cautious stance among investors, with many selling off positions while others wait for clearer signals. Dom Harz, co-founder of BOB, noted that the current correction is “just noise” and emphasized the long-term strength of Bitcoin and Bitcoin DeFi. He argued that institutional adoption and innovation in Bitcoin DeFi would continue to drive value [4].

Ruslan Lienkha of YouHodler echoed a cautious tone, stating that while Bitcoin’s volatility has decreased over time, a significant correction in equity markets could still trigger deeper pullbacks in crypto. He emphasized the need to monitor the broader macroeconomic environment and warned against prematurely declaring a stabilization in the current correction [5].

Meanwhile, major financial trade associations urged the Basel Committee to reconsider its 1,250% capital requirement for crypto exposures, arguing that risk assessment should focus on the underlying asset rather than blockchain infrastructure. This development highlights the ongoing regulatory debate surrounding crypto and its implications for institutional participation [6].

In a separate but related development, US Federal Reserve Vice Chair Michelle Bowman suggested allowing central bank employees to hold “de minimus” amounts of crypto, signaling a potential shift in regulatory attitudes toward digital assets. She emphasized the importance of understanding and embracing new technologies for the traditional financial sector [7].

The broader financial markets also reflected caution, with the S&P 500 down 0.59% and the Nasdaq-100 down 1.39% as investors braced for Powell’s speech and upcoming retail sector earnings reports. The strong correlation between crypto and equity markets suggests that macroeconomic developments will continue to influence crypto prices in the near term [8].

Despite the short-term turbulence, long-term analysts remain optimistic about Bitcoin’s potential. Harvard economist Kenneth Rogoff, who had previously predicted BTC would fall to $100, acknowledged three critical miscalculations in his earlier forecast and expressed surprise at the asset’s continued resilience [9].

Source: [1] Why Is Crypto Down Today? – August 20, 2025 (https://cryptonews.com/news/why-is-crypto-down-today-august-20-2025/)