Quick Take

• Strategy’s preferred stock, Stretch (STRC), experienced a significant selloff, with trading volume exceeding 10.8 million shares as the price plunged to a record low of US$88.6.
• U.S. spot BTC ETFs saw a net outflow of US$228 million last week, lower than the $319 million outflow the week prior. Spot ETH ETFs saw a net outflow of $10 million in the same period, compared to a $15 million outflow the week prior.
• The U.S. stock market staged a powerful, tech-led rebound last week, as volatility subsided alongside easing geopolitical tensions. Equities rebounded from a sharp macro-driven correction earlier in the month, propelled to near-record heights by a historic Middle East peace breakthrough and a stabilizing, albeit hawkish, Federal Reserve monetary policy update. Momentum firmly returned to aggressive growth and semiconductor stocks, prompting investors to look past lingering "higher-for-longer" interest rate warnings.
• • Nasdaq Composite increased +2.43%, led by explosive semiconductor rallies and renewed AI optimism. S&P 500 grew +0.93%, crossing the historic 7,500 milestone during Thursday's session. Dow Jones Industrial Average gained +0.71%.
  • Key Market Drivers: 
  • • U.S.-Iran Peace Accord: The landmark accord served as the main macro catalyst, ending hostilities and reopening the Strait of Hormuz. The removal of energy supply-shock risks significantly boosted global risk assets.
    • Fed's "Restrictive Pause": The federal funds rate remained at 3.50%–3.75% for the fourth straight meeting. Despite a hawkish outlook and potential 2026 hike, the pause stabilized market expectations.
    • High-Profile Tech Partnerships: Growth investors were re-energized by corporate successes. Intel surged over 10% on a U.S.-based chipmaking deal with Apple. SpaceX briefly surpassed Microsoft in intraday value to become the fourth-most valuable U.S. company.
  • Sector and Style Dynamics: The Philadelphia Semiconductor Index (SOX) hit a new record high, driven by a 6.4% surge on Thursday. High-flying AI hardware and memory stocks — notably Nvidia and Micron — led weekly gains. Conversely, Energy, traditional value, and defensive sectors underperformed. WTI crude slipped into the mid-$70s, while IT consulting took a hit as Accenture plunged 24.8% on a trimmed revenue outlook.

Research Dashboard

According to our research dashboard, the price and volume indices dropped -4.24% and -9.49%, respectively, while the volatility index surged +54.46% last week.

Tokens showed mixed performance. BTC and ETH prices decreased by -3.76% and -1.16%, respectively. UNI led the price, volume, and volatility surge, while AVAX and ZEC also saw significant volume and volatility increases. 

Uniswap (UNI) price surge was catalyzed by a bullish Standard Chartered forecast and ongoing supply reductions from the protocol's UNIfication fee-burn mechanism. Avalanche (AVAX) unveiled the Avalanche Payments Collective, a financial consortium of 28 institutional asset managers, fintech firms, and custody providers. The collective coordinates shared standards for cross-border transactions, stablecoin liquidity clearing, tokenized treasury assets, and business payouts spanning over 150 countries and 96 fiat currencies.

Chart of the Week

Bitcoin’s emerging “digital credit” market, valued at approximately $10 billion in market cap, experienced its first significant selloff last week. This event centered on two perpetual preferred shares, Strategy’s (STRC) and Strive’s (SATA), which were designed to offer double-digit dividends backed by Bitcoin treasury companies.

STRC plummeted to the record low of $88.6, with one of highest trading volume of 10.8 million shares. The decline could be driven primarily by leverage and margin pressure. In a common trade setup, investors borrowed against these preferred shares to amplify yield, expecting the securities to hold near their $100 par value. However, as prices slipped, leveraged holders hit maintenance margin breaches. This created a cascade where forced selling by brokers accelerated the decline, fueling a feedback loop of falling prices and further liquidations. Consequently, both products broke below par, with STRC dipping as low as $82.50 and SATA falling into the low $90s, ultimately triggering in margin calls as midday trading volume spikes signaled broker-driven liquidations.

Weekly Performance

Most top-cap tokens saw bearish price action last week. POL and SOL bucked the trend to post gains, while SUI (-13.2%) and ATOM (-12.4%) led the drop.

Categories saw mixed performance in market capitalization (MC), with liquid staking and DEX leading the increase.

Notable Updates

News Highlights

Regulation

• Starting in July 2027, the European Union will implement Regulation (EU) 2024/1624, a new anti-money laundering (AML) framework that mandates a €10,000 limit on cash transactions across the bloc. This regulation enforces stricter oversight for crypto-asset service providers by requiring KYC for specific occasional trades and banning anonymous accounts or services tied to privacy-focused coins. Beyond crypto, the rules increase transparency regarding beneficial ownership and extend AML requirements to several high-risk areas like investment migration, crowdfunding, professional football clubs, and the luxury goods.
• Philippines' central bank, Bangko Sentral ng Pilipinas (BSP), issued stricter digital asset listing and monitoring guidelines for virtual asset service providers (VASPs). They explicitly prohibit the listing or support of privacy coins, aiming to protect consumers by enforcing rigorous due diligence and accreditation processes before any token is offered to the public.

Adoption

• Moody’s Ratings expanded its Token Integration Engine (TIE) to the Solana blockchain, enabling issuers of tokenized bonds and fixed-income securities to embed Moody’s credit ratings directly into blockchain-based assets. The move streamlines investor and application access to trusted risk evaluations without relying on external databases, accelerating institutional adoption of tokenized real-world assets (RWAs).

Investment Vehicles

• Franklin Templeton proposed the creation of investment funds that automatically convert traditional corporate dividend payouts into Bitcoin.
• BlackRock introduced a Bitcoin ETF that allows institutional investors to generate yield from price volatility, subject to specific structural caveats.
• State Street launched a money market fund designed for stablecoin reserves and aligned with the regulatory requirements of the GENIUS Act.
• Fidelity Investments entered the stablecoin reserve management market with the launch of the Fidelity Reserves Digital Fund, a money market fund for stablecoin issuers and institutional investors. This move follows a similar announcement by State Street and positions Fidelity to capture growing demand for compliant reserve assets under the GENIUS Act.
• Charles Schwab is partnering with Cboe Global Markets to launch event-based binary options tied to the S&P 500. This initiative marks Schwab’s entry into prediction markets.

Catalyst Calendar

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