Market highlights
- Strategy reported a second-quarter loss of over US$8.3 billion, causing bitcoin sell pressure.
- Attackers stole US$114 million from over 4,500 vulnerable Coldcard hardware wallets.
- Ethereum Foundation appointed prominent security researcher pcaversaccio to its board.
- CLARITY Act remains before the Senate despite ongoing efforts to proceed to floor vote.
- U.S. SEC said agency could introduce crypto market rules if CLARITY Act stalls.
- Morgan Stanley launched spot Ethereum and Solana exchange-traded funds.
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Macro market overview
Risk assets clawed back their recent declines this week on strong earnings from artificial intelligence (AI) firms and mega-cap tech companies like Amazon and Microsoft. Second-quarter earnings have been strong this reporting season, with S&P 500 companies exceeding expectations by an average of 27%, while Nasdaq 100 entities have beat their estimates by 55%.
The U.S. Federal Reserve kept rates on hold at 3.75% at its July 29 meeting. Fed Chair Kevin Warsh did not submit a quarterly interest rate projection ("the dot plot"), which is a departure from standard practice in recent years. While the Fed's dot plot has its limitations, market participants have become increasingly focused on it as a guidance tool in recent years. Warsh says making such views public can commit the Fed to a path before taking changing economic data into account. CME's Fed Watch tool currently puts the likelihood of a rate hike at the Fed's September 16 meeting at 66.6%.
Other central banks left rates on hold, too. The Bank of England kept rates at 3.75%, while the Bank of Japan kept its policy rate at <1%. In other economics news, second quarter gross domestic product (GDP) growth for the U.S. came in under forecast at 1.5%, while the University of Michigan's consumer sentiment survey exceeded expectations at 55.2. And the ISM manufacturing PMI came in over forecast at 55.6, indicating an expansion in production activity and the fastest acceleration in four years.
This week, Palantir Technologies, McDonalds, and Costco, among others, report their Q2 earnings. Markets will presumably be sensitive to earnings data, how resumed Middle East peace talks progress, and the July U.S. non-farm employment change.
Weekly performance: S&P 500 +0.3%, Dow Jones +0.6%, Nasdaq +0.1%.
Looking ahead:
- U.S. non-farm employment change - Friday, August 7.
Crypto Market Performance
Market Cap: $2.18T (+0.33%)
All crypto sectors declined this week as the outlook for global liquidity remains uncertain and risk-off sentiment across crypto continues. The exploit of Coldcard bitcoin wallets, with around US$114 million stolen from over 4,500 addresses, may also be contributing to the sell pressure. The crypto fear and greed index remains in fear territory at 36.
Past performance is not a reliable indicator of future results.
Bitcoin (BTC)
- Opened the week at US$65,339 and declined throughout the week, coinciding with uncertainty over the U.S. Federal Reserve's interest rate outlook and waning demand from Strategy following the report of its US$8.3 billion Q2 loss. Bitcoin gained into the new week and is trading around US$63,500 (-0.2% 7D).
- BTC dominance ranged between 58.8% and 59.4% this week.
- Bitcoin investment products saw outflows of US$59.4 million.
Strategy shares slipped 0.76% after the company reported a second-quarter loss of over US$8.3 billion, driven by bitcoin's decline. Despite the miss, management highlighted a stronger balance sheet, expanded cash reserves, a 6.9% year-on-year revenue increase and capital flexibility. The news saw bitcoin decline by over 3% on Friday, July 31.
American Bitcoin, backed by the Trump family, mined a record 932 BTC in the second quarter, lifting its bitcoin treasury above 8,000 BTC. Despite a US$57.2 million Q2 net loss from bitcoin's price decline, revenue more than doubled to US$67 million as the company continued expanding mining capacity and long-term bitcoin accumulation.
Attackers have now stolen around US$114 million worth of BTC from over 4,500 vulnerable Coldcard hardware wallets across three attack waves. The flaw stems from March 2021 firmware that generated predictable seed phrases. Researchers warn all exposed single-signature wallets may eventually be drained unless owners migrate funds to newly generated, secure wallets.
In bitcoin buying (and selling) news:
- Strategy sold 1,638 BTC (US$105 million), bringing its total holdings to 842,138 BTC at an average purchase price of US$75,419 per bitcoin.
Past performance is not a reliable indicator of future results.
Ethereum (ETH)
- Opened the week at US$1,953 and declined to a weekly low of US$1,820 on Sunday, August 2, coinciding with continued interest rate uncertainty due to global liquidity's influence on crypto market sentiment. Ethereum is now trading around US$1,850 (-1.5% 7D).
- Ethereum dominance ranged between 10.4% and 10.7% this week.
- Ethereum-focused funds saw inflows of US$2.2 million.
The Ethereum Foundation appointed prominent security researcher pcaversaccio to its board as part of a broader leadership overhaul. The move follows months of governance changes aimed at improving transparency, technical expertise and strategic direction. The board now has four members: President Aya Miyaguchi, Ethereum co-founder Vitalik Buterin, Swiss legal counsel Patrick Storchenegger and pcaversaccio.
In Ethereum buying news:
- BitMine bought 10,339 ETH (US$19.1 million). The company now holds almost 5.8 million ETH, worth US$11.3 billion, or around 4.8% of supply.
Past performance is not a reliable indicator of future results.
Altcoins
The altcoin season index is currently 53, which is leaning toward altcoin season, although not the conditions of a broad-based rally.
Whale of a time
- Cardano gained 25.10% on increased whale activity. Over five days, ADA whales added over 240 million ADA to their holdings, while futures volume rose 61%.
Ripple effect
- XRP gained 1%. Holders learned this week that they can now use their tokens as collateral to borrow Ripple's RLUSD stablecoin on Ethereum through DeFi platform Euler, allowing them to access liquidity without selling. The integration expands XRP's DeFi utility.
Crypto ETF News
Digital asset investment products saw outflows of US$56.7 million this week, with the majority of outflows occurring from bitcoin-focused funds on July 31, following the report of Strategy's Q2 loss. The Federal Reserve's reluctance to release interest rate projections ("the dot plot") may also be contributing to the recent uncertainty.
In altcoins, Solana and HYPE saw outflows of US$17.1 million and US$15.7 million, respectively. And XRP saw inflows of US$22.6 million.
Morgan Stanley launched spot Ethereum (MSSE) and Solana (MSOL) exchange-traded funds (ETFs). Both funds charge a 0.14% fee, stake part of their holdings, and pass staking rewards to investors. The launch follows the firm's broader push into digital assets through ETFs and tokenisation initiatives.
BlackRock launched two tokenised money market products, including an Ethereum-based share class and a multi-chain stablecoin reserve vehicle. Designed for stablecoin issuers under the GENIUS Act, the funds deepen BlackRock's push into tokenised real-world assets.
Past performance is not a reliable indicator of future results.
Other crypto news
- The CLARITY Act remains before the Senate. This week, U.S. Treasury Secretary Scott Bessent urged the Senate to immediately pass the bill, arguing it would provide regulatory certainty while strengthening consumer protections and anti-money laundering rules. Bessent accused Democrats of delaying the bill for political reasons, closing his appeal with a quote from Bitcoin creator Satoshi Nakamoto, "If you don't believe me or don't get it, I don't have time to try to convince you, sorry." Policymakers have until the August 7 Senate recess to pass the bill. Otherwise, passage will need to occur as soon as possible when the Senate resumes business from mid September, ahead of midterm elections on November 3.
- U.S. Securities and Exchange Commission Chair Paul Atkins said the agency is prepared to introduce crypto market rules if the CLARITY Act stalls in Congress, arguing existing authority can address key regulatory gaps. However, he warned legislation remains the better long-term solution because only Congress can deliver regulatory certainty.
- The U.S. Treasury sanctioned two Iranian maritime firms, including HormuzSafe, alleging they forced commercial vessels to buy IRGC-backed "insurance" to transit the Strait of Hormuz. Treasury said HormuzSafe accepted bitcoin and other cryptocurrencies to evade sanctions, extending its crackdown on Iran's shipping network.
- Circle secured a limited-purpose trust charter from the New York Department of Financial Services (NYDFS), allowing it to issue USDC through Circle New York Trust. The approval expands Circle's regulatory footprint, follows its recent federal trust bank approval, and strengthens its position as competition intensifies between stablecoin issuers.
- Tether reported a Q2 operating profit of US$1.5 billion, up nearly 50% from the first quarter. USDT supply grew to US$184.6 billion, while reserves exceeded liabilities by US$4.1 billion. The company also increased its gold holdings by 14 tonnes, taking total reserves to more than 146 tonnes.
from Caleb & Brown Cryptocurrency Brokerage.
