This week brought regulatory shifts, protocol updates, and market moves that immediately reshaped sentiment and flows.

In this edition of Vester Pulse, we break down the stories that mattered most and why they moved markets.

Vester Updates

The Quant Agent is here.

Rolling out by the end of August, it’s our most ambitious agent yet - built to bring institutional-grade quantitative analysis directly into Vester.

The intention is to give every investor access to the kind of modeling once limited to funds.

With the Quant Agent, you can:

• Run backtests on tokens, sectors, or strategies

• Compare risk/return profiles across different assets

• Simulate how market scenarios could impact performance

• Explore factor models and quantitative signals behind price action

This agent goes beyond headlines and on-chain flows — it’s about understanding how strategies hold up over time and why certain risk profiles outperform others.

The Quant Agent is our most ambitious release yet, moving Vester from interpreting markets to quantitatively dissecting them.

Market Updates

Crypto News

Crypto markets eased over the past week, with total capitalization slipping to $3.93T (-2.9%). Bitcoin fell 3.3% to ~$111K, while Ethereum dropped 3.9% to ~$4.55K. Among majors, Solana (-4.9%), BNB (-1.2%), and XRP (-0.6%) also trended lower.

Sector performance was mixed. The GMCI DeFi Index declined to 93.44 (-0.56%), reflecting ongoing pressure in DeFi, while the GMCI Layer-1 Index rose to 199.90 (+3.9%), signaling relative strength among base-layer protocols.

Overall, flows remain selective, with Layer-1 assets showing resilience as broader market momentum consolidates.

Powell Cuts Rates

The pivotal moment for markets this week came as the Federal Reserve delivered its first rate cut in over two years, a clear break from the relentless tightening cycle that has defined policy since 2022. Traders interpreted the move as the beginning of a broader easing trend, and risk assets reacted immediately.

Crypto was among the first beneficiaries. In the hours following the cut, capital flooded into digital assets, pushing Bitcoin up nearly 4% and Ethereum up more than 14%, with the rally spilling into majors like XRP, Solana, and Dogecoin. The synchronized surge showed this wasn’t an isolated narrative trade but a broad-based response to a shift in macro liquidity.

Yet the rally was short-lived. By the weekend, much of the upside had evaporated, leaving prices lower across the board. The price action underscored a key reality: crypto is now a direct proxy for global liquidity conditions. The notion of an independent asset class moving on idiosyncratic fundamentals has given way to a market that trades tick-for-tick with monetary policy expectations. Powell’s words and actions are now as important to crypto markets as they are to bonds or equities.

Within the initial spike, Ethereum’s outperformance stood out. While Bitcoin attracted the knee-jerk bid as the market’s bellwether, ETH’s sharper gains reflected speculative capital rotating toward assets with identifiable growth catalysts. With ETF discussions ongoing and Ethereum’s central role in DeFi and staking, it captured the bulk of short-term flows.

The broader lesson is clear: rate cuts can ignite powerful bursts of upside in speculative assets, but without sustained liquidity support, rallies can just as quickly unwind. Crypto’s fate, for now, is inseparable from the central bank’s policy cycle.

Bejiing launches a Yuan-backed Stablecoin

Beijing is preparing its boldest move yet in digital finance: the launch of a yuan-backed stablecoin aimed at global use. Unlike the e-CNY, which is tightly controlled and domestic in scope, this token would be designed for international settlement and circulation - a direct attempt to extend China’s monetary influence abroad.

The rationale is clear. Nearly all cross-border stablecoin flows today are dollar-based, reinforcing U.S. dominance even in emerging digital markets. China sees an opening to challenge that by offering trade partners - especially in Asia, Africa, and Latin America - a digital yuan alternative. If Chinese exports could be paid for in yuan rather than dollars, Beijing would gain leverage over trade financing while reducing exposure to U.S. sanctions and banking infrastructure.

This aligns neatly with China’s long-standing Belt and Road strategy: build the rails, then denominate the traffic in your own currency. Where China once financed ports and highways, it now seeks to build a parallel layer of monetary infrastructure. 

A widely adopted yuan stablecoin could accelerate the internationalization of its currency, something decades of conventional policy have struggled to achieve.

For crypto, the implications are equally significant. Exchanges and protocols would need to adapt to a new currency base, and liquidity could increasingly mirror geopolitical lines. More importantly, it signals a new era where stablecoins are no longer experimental products but active tools of state policy.

While Washington debates how to regulate dollar stablecoins, Beijing is moving quickly. If this project materializes, it will mark not just an expansion of China’s financial reach, but the first real attempt to use digital assets to shift the balance of global currency power.

Major Token Unlocks on the Horizon

This week brings a wave of scheduled token unlocks that could inject billions of dollars in supply back into the market. Three stand out:

For protocols, unlocks are a test of credibility. They show whether demand is strong enough to absorb new supply or whether insiders will overwhelm the market with selling pressure. In the past, poorly timed or oversized unlocks have triggered steep drawdowns, hurting retail investors and undermining confidence in entire ecosystems.

Kamino’s release is the most striking, with a massive tranche that risks dwarfing trading volumes if holders rush for liquidity. Optimism’s unlock, though smaller, carries symbolic weight. As one of Ethereum’s flagship scaling solutions, its ability to navigate this event without major price dislocation will shape investor confidence in the broader Layer 2 sector.

Unlocks also highlight a deeper issue with tokenomics - many projects backloaded allocations to insiders, VCs, and early contributors. That means supply cliffs often arrive years later, long after the initial hype cycle. What looked like a promising distribution on paper can become a liability when the market is asked to absorb hundreds of millions of tokens at once.

Investors have learned to track these calendars closely. The expectation of an unlock often drives front-running, with traders shorting ahead of the event or rotating into assets without looming supply risks. In this way, unlocks are no longer just technical milestones, they are central to how capital allocates across the ecosystem.

This week’s cluster will be closely watched. If demand can match supply, it will signal growing maturity in some of the sector’s most important protocols. If not, it may serve as a reminder that tokenomics remain one of crypto’s most persistent weaknesses.

What ETF Flows are telling us

As mentioned earlier, spot ETF flows this month have revealed a sharp divergence: Bitcoin funds have shed roughly $1.2 billion in assets, while Ethereum ETFs have attracted about $780 million in net inflows over the same period. The result is a widening gap that says as much about the future as it does about the present.

These charts are helpful for visualization purposes of the divergence.

The implications are immediate. Bitcoin redemptions create incremental sell pressure as authorized participants offload coins to meet outflows. Ethereum’s inflows, by contrast, provide a steady source of demand that helps explain ETH’s relative outperformance in August. Capital is not just drifting — it is rotating.

But the more important takeaway is structural. If Bitcoin continues to leak capital, it risks being treated almost exclusively as a defensive store of value, with limited upside appeal in a risk-on environment. Ethereum, meanwhile, is establishing itself as the institutional “growth allocation” — a platform asset tied to staking yield, Layer 2 expansion, and the long-term potential of tokenized markets.

ETF flows don’t just measure sentiment, they reinforce it. Each week of ETH inflows strengthens its positioning as the asset institutions buy when they want exposure to upside, while BTC’s outflows entrench its role as the reserve holding. If this divergence persists, the next cycle may not be defined solely by Bitcoin dominance at all, but at least partially by Ethereum’s rise as the benchmark growth asset in crypto (watch Sol, Avax as well).

Closing Thoughts

The theme running through this week is gravity. The Fed shifts liquidity and markets bend. China experiments with a new stablecoin and entire trade networks tilt. Unlocks hit and protocols are pulled back to earth by their own token design. ETF flows redirect capital, reshaping which assets sit at the market’s center of mass.

Crypto is no longer a weightless frontier; it is a system of orbits defined by forces bigger than any single project or trade. Some assets will find stable paths. Others will spiral outward or collapse under their own structure.

This is where Vester fits in. Our role is to map those fields - to help you see where the pull is strongest, and what it means for the path ahead.

Thank you for reading, see you next week.