August Market Recap: Cryptocurrencies and Gold Lead, Why Are U.S. Stocks Falling Behind?

Author: Flow Brief by Alea Research

Compiled by: TechFlow

TechFlow Guide: In August, Ethereum surged 32%, Bitcoin rose 25%, and Gold gained 9.4%, but this rally is far from a "buy anything and profit" scenario. Amid the broad uptrend, Ondo defied the trend falling 11%, while US small-cap stocks remained largely flat. For investors, the real question isn't "did it rise?" but rather, when the tide recedes, who is revealed to be swimming naked?

Cross-Asset Markets

Cryptocurrencies and gold led August's performance, while US equities showed clear divergence. BTC rose 25.04%, gold gained 9.43%, and US small-cap stocks, measured by the Russell 2000 ETF (IWM), edged up just 0.94%. The crypto rally extended beyond just BTC, and gold's appreciation was not accompanied by a significant drop in US Treasury yields.

August returns across major asset classes: BTC, Ethereum, Gold, WTI Crude, S&P 500, and Nasdaq 100.

Crypto assets broadly rose, while US equities experienced stock-specific divergence. Most tokens advanced, while stock performance was driven by individual earnings reports and news flows.

US Treasury yields remained steady alongside gold's gains. The 10-year yield closed at 4.75%, matching its early-month level.

Tokenomics are becoming more transparent. Ether.fi has begun tracking buybacks, while Ethena proposed a buyback plan contingent on a supply threshold.

Commodities trends extend beyond metals. Cocoa, sugar, and wheat all outperformed gold.

The July PCE price index increased 0.2% month-over-month, yet headline inflation remains at 3.7% year-over-year, with core inflation at 3.3%. Real consumer spending was flat. BEA data reflects a coexistence of soft demand and sticky inflation.

Daily US Treasury yield movements throughout August, covering the 2-year, 10-year, and 30-year maturities.

The 2-year yield rose 6 basis points to 4.34%, while the 10-year yield closed in line with its early-month level. This aligns with the Fed's emphasis on price stability on August 28.

US Dollar Index performance in August.

The Dollar Index fell only 0.37%. Gold's gain significantly outpaced what currency fluctuations could explain. September's inflation data will help determine whether short-term rates can decline alongside the dollar.

ETH rose 32.57%, outpacing BTC's 25.04%. The rally extended well beyond these two top assets: the median gain among eligible tokens was 16.76%.

August crypto market map: the top 40 eligible tokens, scaled by the square root of market cap.

Even within the broad rally, clear exceptions exist. Pump.fun rose 115.09%, Ethena gained 86.16%, Zcash climbed 85.40%, while Ondo fell 11.23%. Stock picking remains crucial even in bull markets.

August CoinGecko price paths: BTC, Ethereum, Ethena, Pump.fun, Zcash, and Ondo.

Ethena's Buyback Thresholds

Ethena's August 27 fee proposal stipulates that after the foundation takes a 5% gross revenue cut, the first tier will allocate 95% of net revenue toward buybacks. The activation threshold requires USDe supply to reach $7.5 billion, while the currently disclosed supply stands at $4.07 billion, implying an additional ~84% supply growth is needed. Read Alea's "The Case for ENA Against Ethena Is Still Conditional."

Ether.fi's Product Expansion

Ether.fi's product expansion in August broadened customer relationships, driving ETHFI up 36.95%. Revenue after deducting rewards and service costs will reveal how much value this expansion actually retained. Read Alea's "ETHFI Buyback Vote."

Ethena's 90-day daily reference price movement, placing August's rally in a longer-term context.

ENA's August closing price was down approximately 12.1% from its August 27 UTC close, despite the token's strong monthly gain overall. USDe supply growth and actual executed buybacks will dictate progress toward the proposal's targets.

PONS surged 1,119%, closing at roughly 12 times its starting price.

US Equities: A Bull Market for the Few

The S&P 500 rose 2.62% and the Nasdaq 100 gained 4.18%, far outperforming the IWM. Within the 49-stock research pool, Coinbase, Robinhood, and Freeport-McMoRan led gains with increases of 28.62%, 21.08%, and 20.93%, respectively. GE, UnitedHealth, and Walmart lagged, declining 6.77%, 6.03%, and 5.69%.

August return distribution for the 49 US equity research pool stocks, displayed as an equal-area treemap.

Nvidia backed AI demand with strong earnings: quarterly revenue reached $96.2 billion, up 106% year-over-year, with next quarter guidance set at $108 billion. This midpoint implies a required sequential growth of 12.2%. NVDA rose 9.98%, whereas the semiconductor ETF SOXX gained only 1.22%. Earnings supported Nvidia's growth narrative, but broader sector returns reveal an uneven distribution of gains. Read Alea's "When the AI Trade Becomes Memory."

Commodities

Gold rose 9.43% and silver gained 14.98%, but this represents only part of the commodity landscape. 23 out of 28 near-month futures contracts posted gains. Cocoa surged 23.22%, sugar climbed 21.49%, and Chicago wheat rose 18.34%; meanwhile, orange juice fell 23.04%, lean hogs dropped 15.35%, and feeder cattle declined 7.64%. Food and industrial input costs are diverging.

Market map of the 28 near-month commodity futures contracts in August.

WTI crude oil gained only 1.29%. August commodity inflation pressure stemmed primarily from select food and metal contracts, with crude oil contributing far less. Delivery dates and contract rollovers also impact near-month futures pricing.

Methodology: Spot prices compare closing values on July 31 and August 31. CoinGecko reference price ranges from August 1 to 00:00 UTC on September 1, encompassing August UTC closing prices. Crypto assets exclude stablecoins and tokenized funds, securities, and commodities, require complete price data at both time points, and apply a $1 million daily volume threshold. Equity breadth covers the 49-stock research pool. Futures use supplier daily closing prices. Data sources: CoinGecko, Yahoo Finance, US Department of the Treasury.