Hey Edge readers,

We’ve got a small update for you. Starting from this week, Edge will land in your inbox on Tuesday mornings instead of the usual Friday afternoons. And we’re adding something new: YO FLOW WEEKLY, a section dedicated to updates on YO and what’s happening across its vaults.

As for the markets, September is living up to its reputation as a historically weak month for crypto. Most major assets are starting off slightly in the red as traders digest fresh inflation data and wait for the Fed’s next move. In this week’s issue, we’ll dig into what makes September such a tricky stretch for BTC and ETH, and what onchain signals are saying this time around.

Stay sharp. 🫡

-The Exponential team

TL;DR

• ETH hit new ATH.

• YO is Base’s top yield aggregator, 13th largest TVL overall.

• New yoUSD + yoETH markets live on Morpho.

• Pendle: yoUSD 18.75% APY, yoETH 8.67% APY (both #1 yields).

• Euler markets top $18m supplied with strong APYs.

• Mitosis Mainnet live with YO-powered EOL vaults.

• New integrations: InfiniFi, Leap Wallet, Hightop, Axal.

🔗 Dive into all the details in the full article.

September: Crypto’s Weakest Month?

September has a reputation as a weak month for crypto markets, especially for the two largest assets. Bitcoin has historically struggled in this month, since 2013 its price has fallen ~3.5% on average in September, making it the worst-performing month of the year for BTC. In fact, Bitcoin closed September in the red in roughly two-thirds of the past decade (8 of the last 12 years). Ethereum shows a similar “September slump” pattern with an average return of about –6%.

This negative seasonality often earns the moniker “Red September,” and investors are cautious given that many past Septembers saw pullbacks. The silver lining is that such late-Q3 weakness has often been followed by robust Q4 rallies. Historically, October and November have delivered some of the strongest monthly gains for Bitcoin.

Key Onchain Indicators to Watch

Several onchain metrics can shed light on near-term market direction for Bitcoin and Ethereum. Below are a few key indicators and what they suggest as we enter September:

• Exchange Flows & Supply: The amount of Bitcoin held on exchanges is at multi-year lows (<12% of total supply) due to persistent net outflows. In other words, investors have been moving coins off exchanges into cold storage, reducing immediate sell pressure. A low exchange balance historically implies less available supply to dump on the market, which could cushion against steep price drops. Ethereum has likewise seen exchange outflows in recent weeks (a sign of accumulation by holders), though it’s coming off a strong August, so exchange activity bears watching.

  

  Bitcoin Exchanges Balance

• Whale Accumulation: Large holders (“whales”) appear to be in accumulation mode. The number of big Bitcoin addresses (holding ≥100 BTC) just hit an all-time high (~19,160 addresses), surpassing even the peak of the 2017 bull market. This uptick in whale wallets, alongside an increase in long-term dormant BTC supply, signals that major players are buying and holding, even as prices consolidate. Such whale accumulation is typically a bullish sign, indicating strong hands are confident in future upside.

  

  Addresses with Balance > 100 BTC

• Miner Activity: Bitcoin’s network fundamentals remain very strong. Hashrate and mining difficulty are at or near record highs. With BTC prices still elevated, miner revenues have improved, which means miners are less pressured to sell coins to cover costs. In past downturns, miner capitulation (mass selling) added to price weakness, but at current conditions miners appear financially healthy. Ethereum’s network, post-merge, doesn’t rely on miners, but its validator metrics remain robust despite the unstaking queue rising to elevated levels recently. This is worth monitoring since it can signal additional sell pressure coming to the market.

  

  Bitcoin Miner Difficulty

• Profitability Metrics: After the strong YTD rally, many holders are sitting on significant unrealized gains, which could spur some profit-taking in September. Onchain profit indicators like Bitcoin’s MVRV ratio (market value to realized value) do show the market in profit but notably “far from euphoria”. This suggests that while prices are higher than the aggregate cost basis (many coins are in profit), we are not yet at the extreme overheated levels that typically precede a major top. Some near-term selling is possible from traders taking profits, but the broader holder base doesn’t appear excessively euphoric. If a dip occurs, a large portion of supply remains in the hands of long-term holders who have weathered volatility before.

  

  MVRV Z-Score

In the news 🗞️

• Ethereum co-founder foresees ETH rally as Wall Street adopts DeFi. Joseph Lubin, Ethereum co-founder, said that ETH could 100x over time as Wall Street begins staking and integrating ETH into financial infrastructure. Lubin believes Ethereum will replace siloed TradFi stacks, operating validators, L2s, and DeFi rails, calling ETH the “highest octane decentralized trust commodity” that could eventually flip Bitcoin. Ethereum’s fundamentals remain strong with stablecoin supply hitting an all-time high above $160B, though technicals show resistance near term.

• BRC20 introduces EVM-style smart contracts with BRC2.0. The Bitcoin token protocol BRC20 has integrated the Ethereum Virtual Machine (EVM) into its core logic, enabling Ethereum-style programmability on Bitcoin. By combining Bitcoin’s security with Ethereum’s composability, BRC2.0 aims to let developers build smart contracts and programmable tokens directly on Bitcoin.

• Jupiter Lend attracts $500M TVL in first day. Solana’s leading DEX aggregator Jupiter launched its lending protocol, Jupiter Lend, which surpassed $500M in market size within 24 hours of its beta debut. The platform, built with Fluid, is already the second-largest lender on Solana behind Kamino. The launch helped push Solana’s lending TVL to a new all-time high of $3.55B, while onchain lending overall has surged past $40B, with Aave dominating two-thirds of the market.

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