Monthly Market Update (July 2025)

Both the traditional and crypto markets exhibited a combination of policy-driven stability and increased risk appetite in July. This report provides an overview of market updates in July, highlights new developments, and provides our latest market outlook.

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Executive Summary

• Both the traditional and crypto markets exhibited a combination of policy-driven stability and increased risk appetite in July. Mainstream equities surged on strong earnings and easing rate fears.  The S&P 500 and Nasdaq achieved record highs, although gold and real estate declined. In crypto, ETH saw significant growth, signalling a new phase of institutional integration.
• The G20 macroeconomic landscape showed slowing growth and persistent inflation, with India and China leading growth amid stagnation in advanced economies. Central banks are cautiously easing policies, navigating geopolitical tensions and trade uncertainties.
• In the crypto market, ETH gained prominence as a treasury asset, with net inflows into spot ETFs signaling a shift in investor preference. Regulatory developments, particularly in the US with the GENIUS Act, aimed to regulate stablecoins and promote crypto investment in retirement accounts.
• The equity markets in the US hit multiple record highs, driven by strong corporate earnings, AI enthusiasm, and stable Fed policies. European markets maintained near-record levels, while Asian markets showed mixed results, with China and Japan advancing, but India facing setbacks because of tariffs.
• Bridgewater Associates’s founder Ray Dalio recommended that investors allocate 15% of their portfolios to BTC or gold. This is a significant increase from his 2022 recommendation of 1 to 2% in BTC. The return of the constructed portfolio with 5% exposure to BTC and ETH indicated a 2% return compared to a 0.7% return with a traditional portfolio.
• Looking ahead, BTC volatility may increase, while ETH’s role as a treasury asset is expected to grow, supported by corporate capital migration and favourable regulatory frameworks. Overall, the environment suggests continued evolution and integration of crypto within traditional finance.

1.  Overview

Both the traditional and crypto markets exhibited a combination of policy-driven stability and increased risk appetite in July. Mainstream equities surged on strong earnings and easing rate fears, even as macro growth eased and structural issues remained unresolved. In crypto, the rapid ascent of ETH as both a treasury and yield asset, alongside robust ETF inflows, signaled a new phase of institutional integration and underscored the market’s continued regulatory and innovation evolution.

In July, crypto saw significant growth led by ETH. The stock market also reached milestones, with the S&P 500 and Nasdaq posting their longest streaks of record closing peaks for the year. However, Gold and Real Estate both dropped by around 1%.

1.1 Macro of the G20 Economies

Global macroeconomic conditions showed conservative growth in July with continued moderation. The US and European economies remained resilient, supported by steady consumer spending and strong equity markets, although growth rates edged lower compared to early 2024. The ECB and several central banks enacted further rate cuts as inflation approached target ranges, providing market support but reflecting concerns about lingering weakness.

Asia’s major economies, led by China and India, maintained solid performance, with China benefiting from policy support and India posting the highest growth among G20 peers. However, global trade growth stayed subdued amid ongoing, but easing, tariff and supply chain tensions. Commodities traded in a narrow range as supply disruptions persisted, but demand stabilised.

Inflation and Monetary Policy

Inflation is steadying but remains above target in some economies. In the Eurozone, headline inflation is unchanged at 2.0%. Additionally, both the EU and US maintained their interest rates.

The G20 Finance Ministers and Central Bank Governors meeting was held on July 17 to 18 in Durban, South Africa. The main topics discussed include addressing global economic challenges, strengthening multilateral cooperation, and promoting sustainable finance. Key points include commitments to raise long-term growth potential, strengthen fiscal sustainability, and enhance debt transparency, as well as efforts to promote financial inclusion and address climate-related financial risks.

Trade and External Pressures

New tariff rounds and continuing trade disputes, especially between the US and China, are restraining global trade and dampening prospects for export-led economies. Nonetheless, some agreements (like the deals made among the UK, EU, Japan, and South Korea) are helping to limit downside risks.

Risks and Outlook

Weak investment, persistent geopolitical tensions, and policy uncertainty are creating headwinds for the G20 outlook. The Organisation for Economic Co-operation and Development (OECD) and International Monetary Fund (IMF) caution that global growth is “especially weak” through 2025, and inflation in the OECD could reach 4.2% this year, higher than the previous 3.7% forecast. 

1.2 Crypto Market

The Memes category is gaining attention with impressive market capitalisation growth and the highest trading activity relative to its market capitalisation. Previous institutional flows boosted Ethereum Layer-1 (L1) and its beta, suggested by the high participation in liquid staking and lending protocols coinciding with ETH’s bullrun.

In July, US spot BTC and ETH ETFs both saw strong institutional engagement, but the flows highlighted a significant shift in investor preference toward ETH.

Net inflows into spot BTC ETFs remained positive for most of July, with notable streaks, such as a 12-day run bringing in more than $6.1 billion before a brief pause mid-month.

July marked a record-breaking month for spot ETH ETFs, which attracted over $5.4 billion in net inflows, greater than in all previous months combined since their launch. The monthly ETH ETF inflow growth was 366%, significantly higher than BTC ETFs’ 33%. Additionally, the assets under management (AUM) of the ETH ETFs surged by 120% in July, which is significantly higher than the 14% growth of the AUM of BTC ETFs.

The surge in ETH demand stemmed from growing institutional adoption, the appeal of staking yields, and a wave of companies adding ETH to their reserves — a phenomenon seen as a ‘productive capital’ evolution for corporate treasuries. Additionally, BTC adoption as treasuries for public companies accelerated. Over 951,000 BTC were reserved by the publicly listed organisations, accounting for 4.5% of the total BTC supply.  

1.3 Crypto Regulation Updates

In July, the main regulatory developments happened in the US driven by the GENIUS Act, which provides rules to regulate USD-pegged stablecoins. The EU is concerned that the wide use of US dollar-denominated stablecoins in the region could weaken its control over monetary conditions. The GENIUS Act also invokes the hype of stablecoins in other regions; for instance, Hong Kong also published its strict rules to regulate the HKD-pegged stablecoin issuers.

1.4 Equity Market

The US stock market delivered a standout month in July, with major indices vaulting to a series of fresh record highs and investor risk appetite remaining notably robust.

• The S&P 500 logged its sixth consecutive record close by the final week of July, marking its 15th record close of the year.
• The Nasdaq Composite accelerated past the 21,000 mark, propelled by surging technology stocks and ongoing investor enthusiasm for artificial intelligence (AI).
• The Dow Jones Industrial Average also posted gains, but continued to trail the tech-heavy indices.

US equity markets set multiple record highs in July, with both the S&P 500 and Nasdaq posting their longest streaks of record closing peaks for the year. During the last week of July, the S&P 500 achieved its 15th record of the year, closing at 6,339 by the end of July with 2.28% growth in the month. 

The Nasdaq Composite also advanced to fresh highs, at times crossing the 21,122, growing by 4.55%. While the Dow Jones Industrial Average has lagged somewhat, it also posted gains around 0.08%.

Key Drivers of US Stock Market in July include:

• Strong Corporate Earnings: Robust Q2 earnings season was a major support. Over 80% of reporting S&P 500 companies topped Wall Street estimates, especially in the technology sector.
• AI and Technology Optimism: Persistent optimism around AI applications and productivity gains kept technology stocks at the forefront. The Information Technology, Industrials, and Communication Services sectors were standout performers for the month.
• Easing Geopolitical and Trade Uncertainty: Markets were buoyed by easing global trade tensions, especially a provisional US-China trade agreement and other finalised tariffs agreements including EU and Japan.
• Stable Fed Policy and Macro Trends: The Fed maintained steady policy rates, reinforcing expectations of continued low interest rates and giving investors confidence amid cooling inflation and a resilient US labor market.
• Sector Rotation: July saw notable sector rotation, as cyclical names (e.g., Industrials, Financials) joined technology in the rally. Utilities also gained ground, supported by expectations of rising electricity demand from AI data centers. Meanwhile, healthcare and consumer discretionary sectors underperformed.

Europe

The European equity markets held firm near all-time highs in July, underscoring the region’s resilience despite ongoing external challenges and shifting macroeconomic expectations. The STOXX 600, Europe’s broad benchmark, remained largely flat in July, but notched an 8.4% gain year-to-date, edging ahead of major global markets. Major country indices — including Germany’s DAX, France’s CAC 40, and the UK’s FTSE 100 — consolidated at elevated levels. Outperformance was most visible among banks and utility companies.

Primary Market Drivers:

Strong Domestic Sectors: European banking and utility stocks led the market in July, buoyed by robust Q2 results, rate cut momentum from the ECB, and ongoing demand for stable dividends. Domestically oriented firms outperformed exporters.

Export Pressures: Export-heavy sectors, notably industrials and automakers, faced headwinds from a strengthening Euro and ambiguous trade prospects. Persistent trade tensions — particularly with the US — and new tariffs on select goods weighed on sentiment, though these impacts were partially offset by optimism around EU-US and US-Japan agreement progress.

Policy Environment: The ECB delivered its eighth consecutive 25bp rate cut, bringing its main refinancing rate to 2.00%. This contributed to a supportive liquidity backdrop, with headline Eurozone inflation falling to the 2% target, further encouraging risk appetite among European investors.

Earnings and Volatility: Q2 earnings were mixed, with notable beats in the banking and utility sectors but softer results among exporters. Market volatility stayed subdued throughout July, reflecting relative investor confidence.

Sector Rotation: As in the US, the market exhibited sector rotation dynamics: utilities and banks capitalised on their defensive qualities, while exporters and cyclicals lagged. Technology stocks in Europe remained stable, but less exuberant than their US and Asian counterparts.

Asia

Asian equity markets delivered a robust performance in July, driven by technology sector rallies, supportive policy backdrops, and easing trade tensions. While regional gains were broadly positive, trends diverged by country, as investors responded to shifting economic data, central bank actions, and global policy signals.

Key Performance Highlights:

• Japan’s Nikkei 225 surged 3.1% in July, closing at 41,215 — just shy of all-time highs. Gains were fueled by a resurgent tech sector, favourable outcomes from US-Japan tariff negotiations, and strong earnings momentum. Exporters and large-cap stocks benefited from stable central bank policy and brightening global trade prospects.
• China’s Shanghai Composite gained 3.3% for the month, supported by robust investment flows and policy tailwinds. Easing US chip export restrictions and rising foreign inflows propelled tech and consumer sectors. 
• The Hang Seng Index in Hong Kong advanced 5.6% in the latter half of July, led by internet and platform stocks, as policymakers signaled continued support for innovation and capital markets.
• South Korea’s KOSPI remained resilient, edging higher despite concerns about weak global demand and soft export data. Gains were concentrated in semiconductor and battery-related shares, with the market boosted by upbeat outlooks for the AI and EV supply chains.
• India was the regional outlier, with the Sensex and Nifty 50 each falling roughly 3% during July. Losses were driven by a mid-month US tariff announcement on Indian exports, which triggered profit-taking and underperformance in large-cap and mid-cap stocks. FMCG names outperformed, but exporters and cyclicals struggled to gain traction. Despite July’s decline, Indian equities remained among the world’s top-performing year-to-date.
• ASEAN markets and Australia: Australia’s ASX200 rose 1.8% in July, setting new record highs as strong consumer and tech sector advances offset weaker results in mining stocks. Southeast Asian markets saw mixed results: Singapore’s Straits Times Index (STI) edged up nearly 1% for the month, building on steady inflows from global investors seeking defensive, income-oriented assets. Indonesia’s JCI edged up with the help of positive domestic data, while Thailand and Malaysia posted flat to modest gains amid political uncertainty and tepid export recovery.

1.5 RWA

BTC’s rolling 30-day return correlation turned negative with gold, but positive with the S&P 500. There was no specific pattern between BTC and the S&P REIT Index.

2. New Developments

2.1 Crypto.com News

• Crypto.com celebrated its 9th year anniversary with a nine-day giveaway campaign for sporting event tickets, signed merchandise, CRO rewards, and more.
• Crypto.com signed a memorandum of understanding (MoU) with Emirates to explore ways to integrate Crypto.com Pay within Emirates’s payment systems. This aims to meet evolving customer preferences, especially toward the younger, tech-savvy customer segments.
• Crypto.com Custody expanded institutional support for The Open Network (TON), enabling clients to stake TON and earn rewards while maintaining secure asset storage. It also provides access to Jettons on TON Blockchain, including support for USDT and other stablecoins that may be issued on TON in the future. These enhancements are part of a broader set of upcoming initiatives aimed at expanding institutional access to TON’s ecosystem.

2.2 TradFi

Assets Allocation

Ray Dalio, founder of Bridgewater Associates, recommends  that investors allocate 15% of their portfolios to BTC or gold because of the increasing US debt and potential currency devaluation. This is a significant increase from his 2022 recommendation of 1 to 2% in Bitcoin. 

Dalio highlights the need for diversification, given the projected $12 trillion in new US Treasury issuance. While favouring gold, he views both as effective diversifiers. He expresses concerns about BTC’s surveillance and code vulnerabilities. Dalio’s recommendation is flexible, leaving the specific allocation between BTC and gold to the investor. 

We used the following assets to construct the portfolio, and compared the returns with adding BTC and ETH:

Crypto Will Enter Retirement Market

President Trump is reportedly planning to sign an executive order allowing 401(k) retirement plans to invest in alternative assets, including cryptocurrencies like BTC gold, and private equity. This move aims to unlock the US$9 trillion US retirement market and is expected to benefit major private investment firms, directing federal regulators to remove barriers preventing 401(k) plans from including these non-traditional investments in managed funds.

3. Outlook

3.1 Projects and Tokens

Bitcoin (BTC)

Bitcoin volatility may increase because of the Cboe Volatility Index (VIX) seasonality. Historically, the VIX, which measures S&P 500 volatility, surges in August after declining in July. The VIX fell for a third straight month, potentially setting the stage for increased volatility and risk aversion on Wall Street. This could lead to a stock market decline, impacting BTC, which often follows Wall Street sentiment. BTC’s implied volatility indices have shown a positive correlation with the VIX, suggesting it could experience similar volatility.

Ether (ETH)

ETH’s evolution as a treasury reserve asset is likely to accelerate in the near future. The continued migration of public and private corporate capital into ETH — driven by staking rewards, DeFi integration, and increasingly normalised regulatory frameworks — positions ETH not just as a ‘digital gold’ alternative, but as a productive, core building block of corporate finance and Web3 infrastructure. This should result in tighter supply, higher yield-driven demand, and growing institutional alignment, fueling both network and price growth. 

Standard Chartered forecasted ETH could surpass $4,000 by year-end, with other bullish analysts citing even higher targets if treasury demand accelerates.

Celestia (TIA)

The Celestia Foundation announced that it has purchased 43,451,616.09 TIA from Polychain Capital for $62.5 million to “assign Polychain’s entire remaining TIA holdings to new investors”. To settle the purchase, Polychain will be undelegating its staked TIA holdings.

The foundation states that to have a neutral impact on its financial position, it is “finalising the assignment of this TIA to new investors”. These transactions will use a rolling unlock schedule, with the first unlock starting on 16 August 2025, and completing on 14 November 2025.

Jupiter Lend

The Jupiter team has provided an update that the Jupiter Lend Private Beta is expected to go live by early August, with the public launch now scheduled for mid-August. The team disclosed that it has secured “over $1 million in incentives” from external partners to support the launch.

3.2 Airdrop and Unlock Calendar

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Authors

Crypto.com Research and Insights team

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