The past week was eventful and ambiguous for the crypto market. Bitcoin, starting with a correction to $61,000 amid geopolitical tensions between the US and Iran, managed to recover and consolidate near the $64,500 mark. The key driver was US Consumer Price Index (CPI) data, which showed a stronger-than-expected slowdown in inflation — 2.6% against the forecasted 2.8%. Positive rhetoric from Fed Governor Kevin Warsh also added optimism to the market.
The market is finding its balance
A local high was reached on July 15 at $65,500, after which the asset entered a consolidation phase. By Friday, July 17, digital assets declined alongside traditional markets due to a crisis in the semiconductor industry, but Bitcoin recouped its losses by the weekend. At the time of writing, the first cryptocurrency is trading at $64,500, corresponding to a weekly gain of approximately 1%. Assets in the top 10 showed mixed dynamics: Ethereum gained 4%, rising to $1,850, while HYPE lost about 8%.
Institutional interest continues to grow. Spot Bitcoin ETFs attracted $75.5 million in net inflows over the week, marking the second consecutive "green" week. Ethereum funds mirrored this dynamic with inflows of $105.5 million. Despite this, the Fear and Greed Index remains in the "fear" zone at 28 points, indicating caution among market participants. The total market capitalization stands at $2.27 trillion, with Bitcoin dominance at 57%.
Political front: CLARITY Act under fire
US Democratic Senators Chris Murphy, Jeff Merkley, and Chris Van Hollen have opposed the current version of the CLARITY Act, which aims to delineate the powers of the SEC and CFTC in regulating digital assets. Their main demand is the inclusion of anti-corruption provisions prohibiting the president, vice president, cabinet members, and senior officials from owning or profiting from crypto businesses. Consideration of the proposal is expected from July 20, and 60 votes will be needed for its passage. This poses a serious challenge for the administration, given the Trump family's crypto interests.
Technical debates: BIP-110 and the miners' revolt
The BIP-110 initiative, aimed at limiting non-payment data in Bitcoin transactions, has been completely ignored by major mining pools. Over two weeks, support has not exceeded 1% against the required 55%. The activation threshold expires in early August, and if the situation does not change, only nodes that independently adopt this decision will be able to enforce the new rules. Critics of the initiative include Michael Saylor and Adam Back, who, while understanding the need to combat spam, disagree with the proposed mechanism.
Meanwhile, a developer under the pseudonym Leonidas introduced an alternative client, DOG Mode, which does not require a majority vote. The solution raises the transaction limit from 400,000 to 3.9 million WU and reduces the "dust limit" to 1 satoshi, simplifying the sending of Ordinals and Runes. This move essentially challenges the Bitcoin Core consensus and highlights growing tension between different factions of the community.
Week's sensation: Kimi K3 crashes the semiconductor market
Chinese company Moonshot AI unveiled the Kimi K3 model with 2.8 trillion parameters, native vision, and a context of 1 million tokens. The launch of this open model triggered a massive sell-off in chipmaker stocks worldwide. On July 17, Taiwan's index lost over 6%, Japan's closed down 4%, and the Nasdaq fell 1.5%. Nvidia shares temporarily ceded the title of the world's most valuable company to Apple. Investors compare the situation to the "DeepSeek effect" in January 2025, when the launch of the R1 model led to a $590 billion loss in Nvidia's market capitalization in a single session.
Expert opinion: The launch of Kimi K3 is not just a technological breakthrough but a signal of a paradigm shift. The semiconductor market can no longer ignore the emergence of open models capable of competing with proprietary solutions from industry leaders. For the crypto market, this means potential increased volatility, as investors will reassess risks associated with dependence on AI infrastructure. However, in the long term, such innovations only strengthen the fundamental value of decentralized technologies, which are not subject to such isolated shocks.