Quick Take

• Bitcoin developed an unusually strong negative correlation of -0.88 with the USD/JPY pair.
• Last week, U.S. spot BTC and ETH ETFs recorded net inflows of US$197 million and $84 million, respectively, ending an eight-week streak of consecutive net outflows.
• The U.S. stock market diverged sharply. Driven by renewed AI optimism, large-cap growth and tech stocks staged a powerful resurgence, pushing the S&P 500 and Nasdaq Composite to solid weekly gains near record highs. However, broader market participation was thin. Rising Treasury yields, hawkish undertones from the latest Federal Reserve minutes, and escalating Middle East tensions weighed heavily on value and small-cap stocks, dragging down the Dow Jones and Russell 2000.
• • Nasdaq Composite led all major indices with a +1.74% gain, carrying the bulk of the week's bullish momentum. S&P 500 advanced +1.23% to close at 7,575.4, near its all-time high.  Dow Jones Industrial Average dropped -0.50%, weighed down by its value-heavy components.
  • Key Market Drivers: 
  • • AI and Semiconductor Resurgence: The AI trade surged, catalyzed by SK Hynix’s blockbuster $26.5 billion U.S. Nasdaq debut, which soared 13% on Friday. Broadcom also boosted the market following new Apple silicon agreements.
    • Hawkish FOMC Minutes: June Fed minutes revealed policymaker divides over rate hikes, but the majority supported removing the "easing bias." Chair Kevin Warsh’s firm stance raised autumn hike expectations.
    • Geopolitical Friction and Yield Spikes: Strained U.S.-Iran relations and a canceled ceasefire lifted crude oil and pushed the U.S. 10-Year Treasury yield up to 4.59% from 4.49%.
    • Pre-Earnings Lull: Trading volumes remained light as investors positioned themselves ahead of the Q2 earnings season kickoff.
  • Sector and Style Dynamics: Style dynamics were completely dominated by mega-cap growth. Market breadth was notably weak; on several days, a handful of tech giants lifted the S&P 500 even as the majority of its components finished lower. Information Technology was the undisputed leader. Energy also saw strong gains alongside steady accumulation in Communication Services, riding the tailwind of rising oil prices.  Materials and Healthcare emerged as the S&P 500’s weakest segments. Investors rotated capital out of defensive and interest-rate-sensitive areas as bond yields climbed, leaving the Dow Jones exposed to the downside.

Research Dashboard

According to our research dashboard, the price and volatility indices grew +1.77% and +4.06%, respectively, while the volume index dropped -11.35% last week.

Index tokens delivered a mixed performance. BTC and ETH prices increased by +0.37% and +1.28%, respectively. Zcash (ZEC), Uniswap (UNI), and Polygon (POL) led the price gains, while Cardano (ADA) and Hedera (HBAR) led the declines. Zcash (ZEC) and Polkadot (DOT) led the volatility surge.

Zcash confirmed its Ironwood network upgrade will activate on July 28. Uniswap experienced a surge in trading activity, generating approximately $5.2 million in daily fee revenue. PayPal’s USD Stablecoin (PYUSD) launched natively on the Polygon blockchain. Bitwise removed Polkadot (DOT) and Avalanche (AVAX) from its flagship 10 Crypto Index ETF. Cardano founder Charles Hoskinson explicitly denied a viral rumor regarding his retirement. HBAR plunged after the network’s lending protocol, Bonzo Lend, suffered an estimated $9.05 million loss from an exploit targeting a verification vulnerability in a third-party Supra oracle contract.

Chart of the Week

Over the past year, Bitcoin and USD/JPY shared a strong negative price level correlation of -0.88, meaning 77% of Bitcoin’s absolute price variance was associated with the Yen's exchange rate. This inverse trend — Bitcoin falling as the Yen weakens — contradicts traditional "carry trade" logic, which dictates that a weakening Yen should support risk assets. Instead, persistent U.S. Dollar strength is likely depressing both assets over the long run.

Crucially, analyzing daily performance reveals a disconnect: their daily return correlation drops to a negligible -0.12. This near-zero relationship indicates that while the two assets are bound by the same long-term macro forces, the Yen carry trade is not an active driver of Bitcoin's price movements.

Weekly Performance

Most top-cap tokens saw bearish price action last week. ADA (-14.5%) led the drop, while POL(+9.4%) led the increase.

DeFi categories saw mixed performance. DEX (+10.2%) and Lending (+8.8%) led the gains, while Meme (-5.5%) led the drop.

News Highlights

Company News

• Mane City Mobile launched globally on iOS and Android across more than 150 countries on July 7. Developed by Crypto.com, the full-featured strategy game allows players to build an empire, raid rivals, and compete in seasonal events without requiring a crypto wallet or prior blockchain knowledge.

Regulation

• The bipartisan 21st Century ROAD to Housing Act became law through presidential inaction, officially prohibiting the Fed from issuing a central bank digital currency (CBDC) until December 31, 2030. The statute establishes a significant legal roadblock against the development of a U.S. digital dollar to address financial privacy concerns, illustrating how digital asset policies have become heavily intertwined with national legislative battles.
• Kazakhstan’s president signed a decree to accelerate digital asset adoption by regulating cross-border stablecoin payments, granting tax exemptions for regulated crypto transactions, and allowing digital mining operations to utilize associated petroleum and natural gas. The move creates a regulated infrastructure that positions Kazakhstan as a global crypto hub while aligning the industry's energy demands with the country's broader resource management strategy.
• Bank of Korea reaffirmed its focus on bank-led won stablecoins while advancing deposit-token pilots for practical use cases like government subsidies and EV charging infrastructure.

Adoption

• SWIFT launched a blockchain-based shared ledger for a tokenized bank deposit pilot involving 17 major financial institutions — including Citi, HSBC, and UBS — across six continents. The ledger serves as an orchestration layer prior to final settlement through existing systems.
• Sony secured conditional approval from the U.S. Office of the Comptroller of the Currency (OCC) to establish a U.S. stablecoin trust bank. Capitalized at $40 million, the New York-based subsidiary will support the issuance and management of USD-denominated stablecoins.
• Brazil's B3 Stock Exchange introduced options trading on Bitcoin, Ether, and Solana futures. These contracts settle into futures referencing Nasdaq crypto indices rather than requiring the transfer or custody of underlying physical assets. This broadens the regulated financial instruments available in Latin America, giving institutional and retail investors secure avenues to hedge volatility without holding direct custody of crypto.
• Hyundai became the first major South Korean enterprise to advance a cross-border stablecoin internal remittance system to production readiness on the Avalanche blockchain, successfully transferring live USD and USDT between its U.S. and Mexican entities.

Notable Update

Catalyst Calendar

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