Main Points:
- Ethereum has rebranded its privacy initiative to “Privacy Stewards of Ethereum” (PSE), unveiling a roadmap to bring end‐to‐end privacy to the protocol, infrastructure, networking, application, and wallet layers.
- Arthur Hayes emphasizes that Bitcoin’s value lies not in daily price surges but in its long‐term store‐of‐value potential, urging investors toward patience and perspective. He predicts the bull market may extend into 2026.
- The U.S. Federal Reserve is broadly expected to implement modest interest rate cuts (≈25 basis points) soon, which eases downside fears for Bitcoin and Ethereum. Still, long‐term Treasury yields, inflation, and fiscal policy may complicate the outlook.
1. Ethereum’s Privacy Roadmap: Evolving into a Confidential Infrastructure
Rebranding and Core Objectives
Ethereum Foundation has rebranded its “Privacy & Scaling Explorations” initiative to Privacy Stewards of Ethereum (PSE). The new roadmap aims to embed privacy features throughout the Ethereum stack: from protocol level to wallets and applications.
Key Technical Pillars
The roadmap’s architecture is built around three principal domains: private writes, private reads, and private proving. This includes:
- Private writes: enabling confidential transactions such that transaction contents (amount, parties) are hidden.
- Private reads: giving users control over which data is visible or disclosed, e.g. for decentralized identity solutions.
- Private proving: making zero‐knowledge proof (ZKP) systems easier, cheaper, and more broadly usable—what is often called “prove anywhere.”
Applications and Use Cases
- DeFi privacy tools are being prioritized, especially confidential transfers, private identity, and reducing information leakage via RPC endpoints.
- Middleware and wallet layers are similarly slated to adopt privacy features. Users may, in future, be able to choose what they reveal when interacting with applications or when verifying identity—without revealing more than needed.
Challenges and Considerations
- Cost and performance: generating zero‐knowledge proofs is computationally expensive. One of PSE’s goals is to lower this barrier.
- Trade‐offs between privacy and regulatory compliance: privacy features can conflict with KYC/AML requirements, especially in regulated jurisdictions.
- UX complexity: wallets and applications will need to expose privacy settings in ways that are secure, understandable, and safe for users.
2. Bitcoin’s Long Game: Patience, Perspective, and Store of Value
Emphasis on Long‐Term Value Over Daily Highs
Arthur Hayes, founder of BitMEX, is pushing back against expectations for constant price volatility or daily record highs. He frames Bitcoin more as a long‐term store of value rather than a tool for short‐term profits.
Predictions and Macroeconomic Trends
- Hayes expects the current bull market in Bitcoin may continue into 2026, driven by inflation, fiat currency weakness, and continued monetary stimulus.
- He suggests that U.S. government bond (Treasury) repurchase plans, fiscal deficits, and possible currency debasement will drive investors toward non‐fiat hedges like Bitcoin.
Advice to Investors
- Hayes warns against chasing “flashy expectations” or quick gains. Rather, investors should assess the performance of Bitcoin over multi‐year horizons.
- Metrics: comparisons of Bitcoin’s performance relative to stocks, gold, and traditional assets—especially when adjusted for inflation or depreciating fiat currencies—suggest Bitcoin has outperformed over longer timeframes.
3. The Role of Monetary Policy: Fed, Rates, and Macro Tailwinds/Tensions
Expected Rate Cuts and Market Sentiment
- The U.S. Fed is widely expected to cut rates by 25 basis points at its upcoming meeting (e.g. Sept 17, 2025), with more easing anticipated in subsequent months.
- This expectation has already eased downside fears in Bitcoin and Ethereum: option markets (call/put skew) have moved toward neutrality from bearish levels.
Counteracting Forces: Yields, Inflation, Fiscal Policy
- Although near‐term rate cuts are priced in, longer‐term Treasury yields may remain high or even rise, especially if inflation remains sticky or fiscal deficits expand. These could offset the boosting effect of rate cuts on crypto risk assets.
- Inflation dynamics matter: producer price inertia, supply chain issues, or energy price swings can interfere with clean rate cut policies.
The Liquidity Environment and Institutional Flows
- Rate cuts (or expected cuts) often increase liquidity available for risk‐assets. Lower yields make non‐yielding assets like Bitcoin more attractive relative to cash or low‐yield treasuries.
- Institutions appear increasingly comfortable allocating to Bitcoin and other digital assets, viewing them as inflation hedges and part of portfolio diversification.
Recent Market Signals & Data (as of mid‐September 2025)
Here are some recent data points:
- Bitcoin has rallied to around US$116,000 over a recent week, partly driven by Fed rate cut expectations.
- Ethereum has similarly seen gains in anticipation of favorable macro conditions.
- Option markets for both BTC and ETH show a recovery in sentiment: call/put skews are less bearish, indicating fewer expectations of sharp downside.
- Total crypto market capitalization moved around US$4.1-4.2 trillion, with some recent shrinkage likely due to “Fed watch” jitters.
Implications for New Cryptos, Practical Blockchain Use, and Investors
For Developers & New Cryptos
- Privacy first is becoming not just a “nice to have,” but a competitive necessity. Projects offering zero‐knowledge identity, private transaction support, or data privacy at protocol level may have higher long‐term utility and adoption.
- Infrastructure layers—wallets, RPC services, identity modules—present real opportunities. If Ethereum’s PSE delivers usable tools, many dApps will need to integrate or interoperate with them.
For Investors
- Looking for cryptos that align with macro conditions: inflation hedges, limited supply, real utility (not just speculation).
- Evaluate projects on their privacy roadmap, regulatory compliance, user experience, and ability to scale zero-knowledge proofs.
- Be wary of projects that promise quick returns without underlying tech or adoption.
For Enterprises & Real-World Use
- Enterprises using blockchain for identity, supply chain, voting, or confidential data will likely favor platforms that support privacy primitives.
- Regulatory and legal frameworks still matter: privacy enhancements must be balanced with transparency, compliance (e.g. KYC/AML), especially in different jurisdictions.
Conclusion
Ethereum’s shift toward a full privacy‐aware infrastructure via the PSE initiative marks a major inflection point. It signals that privacy isn’t just a peripheral feature but is becoming central for protocol competitiveness and real-world adoption. For Bitcoin, the conversation is increasingly one of endurance rather than spectacle: the message from Arthur Hayes and others is that investors should stop looking for daily fireworks and focus instead on long‐term store-of-value, inflation protection, and macro trends.
Monetary policy—especially U.S. interest rates—is acting as both a tailwind and a risk. Rate cuts are anticipated, which could benefit risk assets like crypto, but long yields, inflation, and government deficits may offset those benefits. For anyone searching for new cryptos or considering how blockchain might be used in practice, the keys now are: privacy, macro alignment, real utility, and patience.
