Crypto Market

BTC and ETH Market Insight

Last week, the trading floor underwent a dramatic shift as the haunting narrative of a bursting AI bubble driven by unmonetized CapEx cash burn was forcefully dismantled. Microsoft’s earnings acted as the ultimate clearing event, proving that hyperscalers' heavy investment in AI chips is not merely fueled by market enthusiasm, but is an on-demand service responding to an undersupplied enterprise market. Driven by an impressive 43% acceleration in Azure cloud revenue and sustained enterprise demand for Copilot, these results completely eased concerns over big tech's massive infrastructure spending. This structural validation gave institutional desks a green light to buy the dip and return to a "risk-on" posture across semiconductor and AI equities, effectively overshadowing Middle Eastern geopolitical headlines that would have triggered a severe market rout just a few months prior. Following the reports, MSFT rallied sharply alongside related semiconductor equities like SK Hynix, which climbed over 17% from its recent lows.

Concurrently, the FOMC delivered a neutral-to-hawkish message with its decision to keep the benchmark federal funds rate frozen at 3.5% to 3.75% for the fifth consecutive meeting. The hawkish undertone stemmed from a starkly divided 9-3 vote, where three regional presidents dissented in favor of an immediate 25-basis-point hike to compress sticky inflation as the lingering uncertainties over volatile energy prices continues to disrupt global markets. Chairman Kevin Warsh maintained his firm stance that the central bank’s core mission remains anchoring the inflation index at or below its 2% target, keeping market participants deeply uncertain on whether a rate hike will become inevitable later this year. This hawkish hold triggered an aggressive sell-off in the bond market, pushing long-dated yields to multi-year highs, however, the equities market successfully prevented systemic bleeding, firmly insulated by underlying fundamental strength and better-than-expected corporate data.

As a result, Bitcoin (BTC) stabilized between $62,000 and $65,000, avoiding significant losses despite a recent Coldcard exploit and the hawkish tilt at the FOMC meeting. Ethereum (ETH) performed slightly worse than BTC, with the ETH/BTC pair dropping 1.57% after previously posting a positive 4.77% month against Bitcoin. ETH is currently consolidating at its recent $1,800 support level as trading volume continues to compress.

Upcoming Macro Calendar - Source: Trading Economics

Options Market

Over the past week, spot prices pulled back, with BTC trading around $63,000 (from ~$65,500) and ETH near $1,850 high (from ~$1,980). Implied volatility eased across short tenors, with BTC 1W ATM IV declining from ~36.8% last week to ~32.5% and ETH 1W IV settling around ~47.8%. Realized volatility rose to meet implied levels (BTC RV ~32.8%, ETH RV ~47.0%), compressing the volatility risk premium to near zero or slightly negative. Skew remained moderately bearish and steepened modestly versus last week, with BTC 25Δ 1W skew rising to ~14.9 vol points and ETH 25Δ 1W skew increasing to ~7.8 vol points, reflecting slightly higher demand for downside protection. Transaction volumes stayed relatively subdued. ETF netflows turned mixed-to-negative, with BTC showing notable outflows toward week-end while ETH posted selective inflows.With IV compressed and the VRP near flat, premium-selling strategies (short strangles or iron condors) look less attractive until volatility rebounds.

Altcoins and Blockchain News

• Fed Chair Waller reiterates 2% inflation target, refuses to call the Fed "on hold".
  
  
• Tokenized stocks and ETF trading surged 288% to a new high of $11.3 billion in July, with bStocks token QQQB accounting for 82% of total trading volume.
  
  
• The crypto industry experienced 30 hacking incidents in July, with total losses reaching $210.3 million, a 177% increase month-on-month.
  
  
• Circle announces receipt of a New York limited-purpose trust charter.
  
  
• SEC Chair: If the Clarity Act fails, the SEC will formulate crypto rules independently.
  
  
• Active crypto venture capital firms decreased to 150, a new low since 2020.
  
  
• Over 60 crypto companies and projects shut down or went bankrupt in H1 2026.
  
  
• Coinbase CEO refutes the notion that "crypto people should switch to AI", arguing that cryptocurrency is an indispensable general-purpose infrastructure.
  
  
• Anthropic: Claude discovers cryptographic algorithm weaknesses, posing a theoretical threat to post-quantum security.
  
  
• South Korea convenes emergency meeting to address stock market plunge, as leveraged ETF controversy escalates. 

Macro

The major benchmarks finished the week with solid gains: the DJIA added 1.04%, the S&P 500 moved up 0.61% and the Nasdaq advanced 1.59%. The Chinese stock market finished a mixed week: the Shanghai Composite Index advanced 0.47%, the CSI 300 index lost 1.31%, and the Hang Seng Index gained 3.69%