Bitcoin Traders Bet on Sub-$100K Slide Amid US Stagflation Concerns.

Bitcoin traders on Polymarket see a 55% chance of prices dropping below $100K before year-end, as the crypto market reels under US stagflation concerns. Economic data suggests job growth could be rolling over hard, with potential NFP prints dropping by over 100,000. Interest-rate traders have ramped up bets on a Fed reduction, but the outlook for ether seems more constructive due to the SEC's guidance on staking activities.

Bitcoin traders on the Polymarket platform have indicated a 55% chance of prices dropping below $100,000 by the end of the year, as the crypto market grapples with US stagflation fears [1]. Economic data suggests that job growth could be slowing significantly, with potential Non-Farm Payroll (NFP) prints potentially dropping by over 100,000. Meanwhile, interest-rate traders have increased bets on a Federal Reserve reduction, but the outlook for Ethereum seems more constructive due to recent SEC guidance on staking activities.

Polymarket traders believe that Bitcoin will end August near $120,000, with a 62% chance of hitting this level [1]. However, they also expect a 38% chance of prices falling below $105,000, indicating a period of stability with limited downside risk. Ethereum is forecasted to close the month between $3,800 and $3,900, with a 69% chance of reaching $3,800 and a 60% chance of $3,900 [1]. The market gives Ethereum a 47% probability of touching $4,000 before the month ends.

The US Services PMI for July dropped to 50.1, signaling slower growth in the services sector and increased inflation [2]. This has led to concerns for both traditional and crypto assets, with analysts adjusting expectations for Federal Reserve rate cuts. The new US tariff order under President Trump seems to be reaching its final stage, creating stagflation risks in the US economy. The employment index fell to 46.4, indicating businesses are cutting jobs, while the price index jumped to 69.9, signaling rising prices [2]. This combination creates stagflation, where fewer jobs exist while prices rise simultaneously, making it harder for people to find work and afford goods.

The Federal Reserve faces an impossible choice between fighting unemployment and controlling inflation. Combating inflation requires rate hikes, while stimulating growth demands rate cuts. This issue could significantly impact crypto prices. Since Congress passed the GENIUS Act on July 18, Bitcoin has shown increasing sensitivity to economic data. Most altcoins have been tracking Bitcoin’s movement accordingly [2].

Mogo, a digital financial services company, sold approximately half of its WonderFi Technologies stake for $13.8 million and increased its Bitcoin investment to $2 million [3]. This move reflects a strategic reallocation of capital to support its broader financial goals. By increasing its Bitcoin investment, Mogo signals strong confidence in Bitcoin as a core pillar of its financial strategy. Bitcoin is viewed as a strategic reserve asset, providing potential hedging benefits and long-term value preservation. This aligns with industry trends where institutional investors increasingly adopt Bitcoin for portfolio diversification and risk management.

In conclusion, the crypto market is facing significant challenges due to US stagflation concerns. Bitcoin traders expect prices to drop below $100,000 by the end of the year, while Ethereum shows more constructive potential. Economic data and Federal Reserve policies will play a crucial role in shaping the crypto market's future.

References:
[1] https://coinedition.com/polymarket-crypto-price-prediction-august/
[2] https://beincrypto.com/us-stagflation-fears-triggered-as-bitcoin-face-fed-policy-crisis/
[3] https://en.coinotag.com/breakingnews/mogo-boosts-bitcoin-holdings-to-2-million-following-13-8m-sale-of-wonderfi-stake/