Quick Take

• Bitcoin mining difficulty decreased 15% from January’s peak.
• Last week, U.S. spot BTC saw a net outflow of US$62 million, compared to the $34 million inflow in the previous week. U.S. spot ETH ETFs recorded $10 million in net inflows, down from the prior week’s $104 million.
• The U.S. stock market experienced a highly volatile week, marked by a sharp mid-week sell-off followed by a massive late-week rally. Trading was heavily influenced by a major Federal Reserve policy decision and a wave of mega-cap tech earnings. Although the week began with a rotation away from AI and chip stocks into traditional sectors, and Wednesday saw a sharp drop after the Fed kept interest rates unchanged, blowout earnings from major cloud and tech giants on Thursday and Friday propelled the broader market to finish in positive territory.
• • Nasdaq Composite increased 1.59%, S&P 500 grew 1.05%, and Dow Jones Industrial Average gained 1.04%.
  • Key Market Drivers: 
  • • Fed and Economic Data: The Fed’s July 29 decision to hold rates steady temporarily sparked inflation concerns and sent the U.S. 10 Year Treasury Yield to 4.75%. However, a cooler-than-expected Core PCE price report (+0.1% month-over-month) signaled easing inflation, mitigating a soft preliminary Q2 GDP growth reading of 1.5%.
    • Mega-Cap Tech and AI Optimism: Strong corporate earnings single-handedly reversed the mid-week slump. Microsoft surged nearly 15% on Thursday on Azure cloud growth, while Amazon jumped over 15% on cloud strength and robust AI-related capex forecasts.
    • Energy and Geopolitical Volatility: While ongoing Middle East tensions kept oil prices elevated early in the week, they tumbled by roughly 5% on August 3, 2026. This decline followed U.S. President Donald Trump's decision to cancel planned military strikes against Iran in favor of reviving diplomatic peace talks.
  • Sector and Style Dynamics: Consumer Cyclicals was the standout sector for the week (+7.30%), followed by Communication Services (+1.51%). Conversely, Utilities (-4.22%) and Industrials (-2.03%) were the week's worst performers.

Research Dashboard

According to our research dashboard, the price and volatility indices dropped -2.61% and -5.62%, respectively, while the volume index grew by +1.65%, last week.

Most tokens in the index declined. BTC and ETH prices decreased by -2.82% and -3.63%, respectively. Cardano (ADA) and Uniswap (UNI) led the price and volume gains, while Cardano and Polygon (POL) led the volatility surge.

Uniswap activated its v4 protocol fee switch across seven networks, transforming UNI's tokenomics. A portion of swap fees is now diverted to the protocol, where third parties can claim them in exchange for burning an equivalent value of UNI. This burn mechanism creates direct value capture and sustained deflationary pressure. Additionally, Uniswap launched "Earn," integrating Morpho lending vaults directly into its app. ADA’s bullish price action could be largely driven by whale activity.

Chart of the Week

Bitcoin mining difficulty fell to 126.23 trillion, down roughly 15% from its January 2026 peak. This represents a 2.5% year-over-year decline, marking the second time in the network’s history that difficulty has fallen year-over-year. The first occurred following China’s 2021 mining ban.

Weekly Performance

Top-cap tokens mostly saw bearish price action last week, except ADA (+14.2%). APT (-10.5%) and ATOM (-9.6%) led the decline.

DeFi categories mostly declined except DEX (+3.1%). Data indicated that DEX spot trading volume hit a record 24% of centralized exchange (CEX) market share in July, marking the highest ratio since 2019.

News Highlights

Company News

• Emirates officially launched Crypto.com Pay™ on its website and mobile app, allowing eligible UAE customers to pay for flight bookings with cryptocurrency. Transactions are priced and settled in Emirati Dirham (AED) and processed in compliance with UAE regulatory standards.
• Crypto.com announced a strategic partnership with XYO, a provider of verifiable real-world data infrastructure. XYO selected Crypto.com Custody to manage secure, institutional-grade custody and liquidity solutions for its native tokens, XYO and XL1.

Regulation

• The CLARITY Act gained backing from major Wall Street firms, including BlackRock, Fidelity, Franklin Templeton, and Goldman Sachs, which argue that the legislation offers essential regulatory certainty for the U.S. crypto industry. However, the bill faces opposition from traditional banking interests. JPMorganChase, for instance, raised concerns regarding stablecoin yield provisions, arguing they could give crypto issuers an unfair advantage over traditional bank deposits. This highlights a growing divide within the financial sector, with asset managers generally favoring the bill while certain banks worry about competitive imbalances.
• The South Korean government confirmed that its long-delayed 22% tax on cryptocurrency gains will officially take effect on January 1, 2027. After three postponements since its initial proposal in 2022, policymakers have dismissed the possibility of further delays, finally establishing a definitive tax regime for digital asset investors in the country.

Adoption

• BNY is launching a blockchain-based transfer agency platform to transition core fund ownership records and investor transactions onchain. By operating this system alongside its traditional infrastructure, BNY aims to create an immutable, shared ledger to significantly reduce manual data reconciliation, signaling a major step toward mainstream institutional blockchain adoption for back-office operations.

Investment Vehicles

• Morgan Stanley launched spot Ether (MSSE) and Solana (MSOL) exchange-traded products (ETPs) on NYSE Arca. The funds plan to stake portions of their underlying ETH and SOL holdings, passing 100% of staking rewards directly to investors rather than retaining them as revenue.

Catalyst Calendar

Recent Research Reports

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