The past week was eventful: Bitcoin managed to recover from a local downturn, while the launch of the Chinese AI model Kimi K3 triggered a real collapse in semiconductor manufacturer stocks. Let's break down the key events.
Bitcoin: From $61,000 to Consolidation Around $64,500
The start of the week was alarming. The escalation of geopolitical tensions between the US and Iran, along with general macroeconomic uncertainty, drove the leading cryptocurrency down to the $61,000 mark. However, the situation changed dramatically on July 14 following the release of US Consumer Price Index (CPI) data. The core figure, excluding food and energy, came in at 2.6% year-on-year against a forecast of 2.8%. The slowdown in inflation was stronger than expected, which instantly spurred the market.
An additional driver was the positive rhetoric from Fed Chair Kevin Warsh during his speech before Congress. As a result, Bitcoin reached a local high of $65,500 on the evening of July 15, before entering a consolidation phase. By the end of the week, despite a dip caused by the crisis in the semiconductor sector, the leading cryptocurrency had recovered its losses. At the time of data recording, Bitcoin is trading around $64,500, showing a gain of approximately 1% over the week.
ETF Activity and Market Sentiment
Investors continue to return to spot Bitcoin ETFs. Between July 13 and 17, the funds attracted net inflows of $75.5 million, marking the second consecutive "green" week. Ethereum funds are also showing positive dynamics with inflows of $105.5 million. However, the Fear and Greed Index, having risen to 28 points, is still in the "fear" zone, indicating ongoing caution among market participants.
Political Battle Over the CLARITY Act
A debate has flared up in the US political arena. Three Democratic senators have opposed the current version of the CLARITY Act, which aims to delineate the powers of the SEC and CFTC. In their view, the document lacks anti-corruption provisions, especially considering President Donald Trump's cryptocurrency business. They insist on including clauses that prohibit senior officials and their families from owning or promoting digital assets.
BIP-110: An Upgrade Nobody Wants
The BIP-110 initiative, which limits non-payment data in Bitcoin transactions, has been met with complete disregard from miners. Over two weeks, no major mining pool signaled support, and the overall adoption rate barely reached 1% against the required 55%. In response, the founder of Runestone, under the pseudonym Leonidas, presented an alternative client, DOG Mode, which he claims does not require a majority vote and is designed to simplify work with Ordinals and Runes.
The Week's Main Blow: AI Model Kimi K3
Chinese company Moonshot AI released the largest open-source model, Kimi K3, with 2.8 trillion parameters. Its capabilities, including native vision and a context window of 1 million tokens, proved so impressive that they caused panic in the stock market. On July 17, shares of chip manufacturers and AI companies crashed worldwide. Taiwan's index lost over 6%, Japan's fell by 4%, and the Nasdaq declined by 1.5%. Nvidia's shares temporarily ceded the title of the world's most valuable company to Apple. Investors are already comparing this effect to the "DeepSeek effect" that occurred in January 2025.
My comment: The launch of Kimi K3 is not just a technological breakthrough but a signal of a paradigm shift. Open-source models are beginning to catch up with and even surpass proprietary solutions, which calls into question the current valuation of many "closed" giants. The market, judging by its reaction, was not ready for this. In the long term, this is undoubtedly a positive trend for AI development, but in the short term, it is a "supply shock" for investors who have put their money into "hardware."