Cryptocurrencies: Geopolitics and Risk of an AI Bubble

Cryptocurrencies: Geopolitics and Risk of an AI Bubble

Crypto Scenario as of August 22, 2025: U.S. Policies, Market Trends, Strong Dollar and the Risk of an AI Bubble.

Current Market Status

Stock market information for Bitcoin (BTC)

• Bitcoin is a crypto asset in the CRYPTO market.
• The price is USD 112,533.0, currently showing a change of -857.00 USD (-0.01%) compared to the previous close.
• The intraday high is USD 113,879.0 while the low is USD 112,021.0.

Stock market information for Ethereum (ETH)

• Ethereum is a crypto asset in the CRYPTO market.
• The price is USD 4,296.12, currently showing a change of 2.28 USD (0.00%) compared to the previous close.
• The intraday high is USD 4,348.03 while the low is USD 4,209.91.

As of August 22, 2025, Bitcoin (~USD 112,500) shows a decline, while Ethereum is trading around USD 4,300–4,350, with contained volatility after recent all-time highs.

1. U.S. Domestic Tensions and Market Reactions

In the United States, political orientation has slowed compared to the past. The Department of Justice announced it would drop actions against developers of decentralized platforms without criminal intent, signaling a softer approach toward the crypto sector.
At the same time, a clearer regulatory distinction has emerged: the Clarity Act aims to establish that assets such as Bitcoin, Ether, Solana, and XRP are “commodities” under the jurisdiction of the CFTC, while others remain under the SEC’s oversight.

Regulatory Developments: Toward Legitimacy and Adoption

• GENIUS Act: recently approved legislation requiring stablecoins to be fully backed (1:1) by USD or low-risk assets, introducing both federal and state oversight.
• SEC and CFTC are collaborating to modernize custody rules, facilitate trading of both regulated and unregulated assets, and support financial “super-apps.”
• CFTC initiative: to allow spot contract trading of crypto assets on regulated exchanges.
• SEC simplification: in-kind operations for crypto ETPs, aligning them with traditional ETFs, reducing forced selling risk and improving tax efficiency.
• Executive Order 14178 (Trump): bans the introduction of a CBDC and establishes a working group for a federal regulatory framework on digital assets.
• Strategic Bitcoin Reserve: created by the Treasury, based on confiscated BTC (~200,000 BTC), along with reserves of other digital assets.

Macroeconomic Outlook: Rates, Dollar and Risks

Ahead of Powell’s speech at Jackson Hole, profit-taking and spot selling are underway – the probability of a rate cut in September has dropped to 73%. The market seems to be preparing for a more restrictive tone from the Fed.
This uncertainty triggered crypto liquidations (over USD 500 million), with Bitcoin falling from a peak of ~USD 125,000 to below USD 115,000.
Bernstein analysts remain optimistic, predicting a rally up to USD 200,000, supported by an extended cycle driven by institutional and regulatory factors. Others warn the cycle may follow more traditional patterns, with a peak expected between USD 140,000 and 150,000 by year-end.

The AI Bubble and Market Narrative

The growing fusion of AI and blockchain is fueling a potential boom in tokenized projects linked to artificial intelligence and real-world assets: Solana, Maple, Sui, FET, and Render are in the spotlight.
However, some observers caution that parallels with past bubbles suggest excessive speculation, especially when driven by hype rather than real fundamentals.

Market Reaction and Outlook

 Operational Forecast

• Short term (weeks): Volatility expected. Caution around Fed’s speech. Stabilization attempt likely around USD 112,000–115,000.
• Medium-long term (months): If the regulatory framework consolidates and sentiment remains positive, Bitcoin could move toward USD 150,000–200,000, albeit with correction risks.
• Main risks: tighter monetary policy, stronger dollar, an “AI bubble” deflating due to regulatory hurdles or lack of real utility.