The past week was eventful: Bitcoin made a sharp surge to $64,000, miners ignored another network improvement proposal, and a new open-source AI model from China caused semiconductor stocks to plummet. Let's break down the key events.
Bitcoin: From Correction to Consolidation
The week started bearishly. The escalation of geopolitical tensions between the US and Iran, compounded by general macroeconomic uncertainty, pushed Bitcoin down to $61,000. However, the market reversed course on July 14. The key catalyst was the US Consumer Price Index (CPI) data: the core index, excluding food and energy, came in at 2.6% year-over-year, below the forecasted 2.8%. Inflation slowing more than expected is a powerful signal for risk assets.
Additional support came from positive rhetoric by Fed Governor Kevin Warsh during his testimony before Congress. A local peak was reached on the evening of July 15 at $65,500, after which the asset entered a consolidation phase. On Friday, July 17, the market saw a pullback amid the crisis in the semiconductor sector, but Bitcoin managed to recover its positions by the weekend. At the time of analysis, the asset is trading around $64,500, showing a weekly gain of approximately 1%.
Institutional Interest and ETFs
Against the backdrop of easing inflation expectations, investors actively returned to spot Bitcoin ETFs. From July 13 to 17, these instruments attracted net inflows of $75.5 million, marking the second consecutive "green" week. Ethereum funds also showed positive dynamics with net inflows of $105.5 million. The Fear and Greed Index rose to 28 points but remains in the "fear" zone, indicating cautious optimism rather than euphoria.
The total market capitalization stands at $2.27 trillion, with Bitcoin dominance holding at 57% and Ethereum's share at 9.9%.
Political Aspect: CLARITY Act Under Fire
US Democratic Senators Chris Murphy, Jeff Merkley, and Chris Van Hollen opposed the current version of the CLARITY Act. Their main demand is the inclusion of anti-corruption provisions that would prohibit the president, vice president, cabinet members, and their immediate family members from owning or promoting crypto businesses. This is a direct jab at Donald Trump and his family, who are actively involved in the crypto industry. According to analysts, consideration of the amendments will begin on July 20, and 60 votes in the Senate will be required for their adoption.
BIP-110 and DOG Mode: The Battle for Bitcoin's Future
The BIP-110 proposal, which limits non-payment data in transactions, faced complete disregard from miners. Over two weeks, support reached only about 1% of the required 55%. The initiative received harsh criticism from Michael Saylor and Adam Back. In contrast, Runestone founder under the pseudonym Leonidas introduced the DOG Mode client. This solution increases the transaction limit from 400,000 to 3.9 million WU and lowers the "dust limit" to 1 satoshi, simplifying work with Ordinals and Runes. Unlike BIP-110, DOG Mode does not require a majority vote—support from just one miner is sufficient.
A New Chapter for Privacy: EthSystems
The Ethereum Foundation's privacy team spun off into a commercial company called EthSystems. The startup will focus on blockchain solutions for institutional clients, using zero-knowledge proofs (ZK-proofs). The goal is to allow banks and asset managers to conduct large transactions on Ethereum while hiding position details. The project has already received support from Ethereum co-founder Joseph Lubin and companies BitMine and SharpLink.
Shock of the Week: Kimi K3 Crashes the Chip Market
China's Moonshot AI unveiled the Kimi K3 model—the largest open-source AI model with 2.8 trillion parameters, native vision, and a context of 1 million tokens. Developers claim it is second only to proprietary models like Claude Fable 5 and GPT 5.6 Sol. The model's launch triggered a massive sell-off in chipmaker stocks. On July 17, the Taiwan index lost over 6%, Japan's index fell 4%, and the Nasdaq dropped 1.5%. Nvidia temporarily ceded the title of the world's most valuable company to Apple. Investors dubbed this the "DeepSeek effect"—in January 2025, a similar situation cost Nvidia $590 billion in market capitalization in a single session.
My analysis: The market is clearly overheated with AI expectations. Any new open-source model demonstrating competitiveness is perceived as a threat to the dominance of current leaders. However, for long-term investors in semiconductors, this is more of a correction than a trend reversal—demand for computing power will only grow.