Bitcoin just had its best month in a year. What's next?
There’s never a dull moment onchain. Here’s what you need to know this week:
Crypto just had its best month in a year. BTC was up 25%, ETH up 56%, and XRP up 45%. Can the rally continue in September?
Strategy finally resumed buying bitcoin. After pausing most of the summer, the crypto treasury giant is back — adding $370 million at $80,300 per coin.
Could quantum computers eventually crack your wallet? The threat isn't immediate, but the biggest names in crypto are already preparing.
MARKET BYTES
Crypto markets roared back in August
With tensions ramping back up in Iran this week, oil prices spiked and BTC, stocks, and bonds all slipped to start September.
But for crypto, at least, things remain a lot sunnier than they were a few weeks ago, when prices were mired in a tight range for months. For most major tokens, August saw gains well into the double digits. BTC, in its best month since November 2024, climbed around 25%, ETH around 56%, and XRP around 45%.
Institutional money also flowed back into crypto, with spot exchange-traded fund inflows surging across the board. Bitcoin ETFs, which pulled in around $3.5 billion in August, saw their best month in a year. Ether ETFs had an even stronger run, with August’s inflows accounting for around 12% of the money they’ve accumulated since launching. “Adjusted for the size of each market, demand for ether products ran about four times as intense as bitcoin's over the past week,” notes CoinDesk. “That gap matters because the bitcoin streak was measured against a quiet summer, while the ether numbers are records outright.”
So what might happen next? Here’s more news you should know about…
Iran conflict fuels fears of interest rate hikes
Despite the August rally, markets are heading into September (which is traditionally considered a slow month) with a lot of question marks hanging over them.
A major concern is the potential for interest rates to rise, which is an outcome traders are increasingly pricing in as the Iran conflict drags on — over fears that rising energy prices will cause inflation to spike. Meanwhile, bond yields remain near multidecade highs, potentially making investment in asset classes like stocks and crypto less attractive.
“Higher oil prices are threatening to reignite inflation, raising the risks of tighter monetary policy,” Fawad Razaqzada at Forex.com told Bloomberg. “Also unnerving investors is the continued rise in global bond yields – which kind of goes hand in hand with oil prices.”
Rate hike?… The CME’s Fedwatch tool, which uses futures trading activity to calculate where markets think interest rates are going, indicates that nearly 70% of interest-rate traders think that rates will rise at the Federal Reserve’s next meeting in September. More than 60% of prediction market traders also believe rates will tick upwards.
Strategy resumes BTC purchases
Earlier this summer, after crypto prices slowed to a crawl, the bitcoin accumulation giant Strategy paused buying bitcoin — and even sold some of its holdings.
Now, with prices back above the firm’s break-even level, Strategy has started buying again — adding around $370 million worth of BTC for around $80,300 each. The firm’s holdings now total 845,050 BTC, worth more than $65 billion.
Bitmine Immersion Technologies, meanwhile, is getting very close to its goal of owning 5% of all circulating ETH. The firm’s latest purchase, of 53,501 ETH for around $131.3 million, brings the company’s total holdings above 5.9 million ETH with a total value of around $14.5 billion.
Alt nation… The total market cap for crypto treasury companies hit $340 billion after a strong August, with firms that hold altcoins like Zcash and HYPE outperforming.
QUANTUM LEAP
How crypto firms and blockchains are preparing for the arrival of future quantum computers
While the security risks presented by AI have been in the spotlight lately, another emerging technology is growing in the background — especially for crypto, banking, internet communication, and any other system that relies on current encryption protocols.
Quantum computing is not an immediate threat. But major blockchains and crypto companies are already hard at work solving the potential security issues it presents. “There is high confidence that a fault-tolerant quantum computer will eventually be built, and the cryptography that secures virtually every major blockchain is vulnerable when it arrives,” said the Coinbase Quantum Advisory Council.
What exactly is quantum computing? And why does it threaten crypto and blockchains? Here’s what you need to know...
What is quantum computing?
Conventional computers, like the phone or laptop you are probably reading this on, process information in “bits” — simple 1s and 0s, like the heads or tails of a coin toss — that can solve complex problems if you string enough of them together.
Quantum computers, on the other hand, use “quantum bits” (or “qubits”), which can represent heads, tails, or any state in between — all at once. This allows quantum computers to explore multiple answers at the same time, instead of checking them one at a time.
For many conventional computing tasks, this offers no major advantage. But for complex mathematical problems with a large number of variables, like data pattern recognition, financial simulations, or logistics routing, quantum computers represent a significant advantage.
Why could they be a threat for blockchains?
Current cryptographic technology is extremely secure against conventional computers. Trying to use a current computer to “brute force” someone’s crypto wallet keys, for instance, would take longer than the age of the universe.
But experiments have shown that a future quantum computer will likely be able to break such encryption relatively quickly — an inflection point that some call “Q-Day.”
For crypto, a major threat is the way that self-custody wallets work. When wallets are created, they generate a public key (your wallet address) and a private key (your password). Because the public key is mathematically derived from the private key, it’s theoretically possible for a future quantum computer to reverse engineer the process.
Given that users’ public keys are revealed whenever they make a transaction, quantum attackers could simply wait for a desired wallet to move funds and reverse-engineer the private keys.
But while the eventual quantum threat is real, blockchains aren’t defenseless, and many of the biggest players in the industry are proactively working toward solutions.
What is Bitcoin doing?
Given the number of Bitcoin addresses with public keys that have already been exposed, there could be around 7 million wallets holding more than $470 billion in BTC that could eventually become vulnerable to a quantum threat.
Since Bitcoin doesn’t have a centralized “foundation” plotting upgrades, any change to the protocol needs broad consensus from the community of developers, miners, and node operators.
One proposal gaining traction, BIP-360, is focused on making users’ public keys less visible. If public keys were no longer onchain, attackers wouldn’t be able to use them to reverse-engineer private keys.
Other proposals include moving toward a different type of cryptography, known as “hash-based,” which is seen as less vulnerable to quantum computing or requiring older wallets to upgrade to quantum-resistant ones (and freezing tokens that remain in older wallets).
Some efforts have focused on demonstrating ways that the current network can be upgraded to operate to resist quantum threats without requiring a “hard fork.” This week, for instance, a firm called Starkware produced the first-ever quantum-resistant bitcoin transaction.
Companies including Coinbase, BlackRock, Strategy, Ark Invest, and Fidelity Digital Assets have joined together to form the Bitcoin Security Consortium, a new group pledging $15 million over the next three years to support Bitcoin’s quantum security.
What about Ethereum?
Ethereum’s researchers just proposed a plan aimed at protecting the network’s validators — who verify transactions and keep the network running — by creating network compatibility with newer private keys that are quantum resistant.
What are some major crypto firms doing?
Coinbase is already building its post-quantum security structure, including a quantum-resistant key-management system for the crypto it custodies. The company is also upgrading all internal systems that rely on cryptography in the order of how critical those systems are.
It’s also contributing funds and engineering talent to the Bitcoin Security Consortium and just finished co-hosting a working session with Stanford University that brought together Bitcoin developers, cryptographers, and researchers for a focused day of discussion on post-quantum migration.
Developers at Ripple, the payments firm closely associated with the XRP token, have established a four-part plan to upgrade the XRP Ledger to protect against potential quantum threats.
First, they’re assessing which parts of the network might be vulnerable, then testing alternative, quantum-resistant forms of cryptography. Eventually, they’ll run existing security alongside quantum security, before migrating the entire network. And in the event that quantum computers advance more quickly than expected, there’s an emergency upgrade route planned.
NUMBERS
$21 billion
The approximate value of Polymarket after its most recent funding round. The prediction market platform raised $1 billion, with $300 million coming from 1789 Capital, where Donald Trump Jr. serves as partner. The new capital comes as Polymarket seeks to start offering margin trading and attract more institutional traders to its platform.
$1 billion
The assets-under-management milestone surpassed by Bitwises’ Solana ETF last week, making it the first SOL ETF to cross the threshold. Overall, Solana ETFs have seen around $1.7 billion in cumulative inflows, with inflows increasing between March and August of this year despite a significant market downturn.
TOKEN TRIVIA
In crypto, what does "Q-Day" refer to?
A
The day Bitcoin's supply cap is finally reached
B
A quarterly earnings report for crypto exchanges
C
The day a quantum computer becomes powerful enough to break current encryption
D
The launch date of a new quantum cryptocurrency
Find the answer below.
Trivia Answer
C
The day a quantum computer becomes powerful enough to break current encryption
Coinbase Bytes
Your weekly digest of crypto news
Learn how we collect your information by visiting our Privacy Policy
