The past week was a period of cautious recovery for the crypto market and tectonic shifts in adjacent sectors. Bitcoin managed to recoup losses after a short-term drop to $61,000 triggered by geopolitical tensions between the US and Iran, stabilizing around $64,500 by the weekend. The key catalyst for the reversal was US Consumer Price Index (CPI) data, which showed core inflation slowing to 2.6% year-over-year against an expected 2.8%. This, combined with dovish rhetoric from Fed Governor Kevin Warsh, gave the market the necessary momentum.
Market in Numbers and Sentiment
The 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, pressure on Bitcoin came from a crash in the semiconductor market, but the asset recovered by the weekend. Over the week, the leading cryptocurrency gained about 1%.
Among the top 10 by market cap, performance was mixed: Ethereum rose 4% to $1,850, while HYPE lost about 8%. Capital inflows into spot Bitcoin ETFs continued for the second consecutive week, with net inflows of $75.5 million. Ethereum funds also showed positive momentum, attracting $105.5 million. The Fear and Greed Index rose to 28 points but remains in the fear zone, indicating cautious optimism among investors. The total market capitalization stands at $2.27 trillion, with Bitcoin's dominance holding at 57%.
Political Drama Around the CLARITY Act
On the political front, a battle is unfolding over the future regulation of cryptocurrencies. Democratic senators have opposed the current version of the CLARITY Act, insisting on including anti-corruption provisions. They propose banning the president, vice president, cabinet members, and members of Congress from owning crypto businesses or profiting from them. This is a direct response to concerns related to Donald Trump's family interests in this sector. Consideration of amendments is expected from July 20, and 60 votes in the Senate will be required for their adoption.
BIP-110: Failure and Alternative
The Bitcoin community ignored the BIP-110 proposal, which was intended to limit non-payment data in transactions. Over two weeks, no major mining pool supported the initiative, and the adoption rate did not exceed 1% against the required 55%. Strategy founder Michael Saylor and Blockstream co-founder Adam Back criticized the proposal. In contrast, the DOG Mode client was presented, which instead proposes increasing transaction limits and simplifying the sending of Ordinals and Runes. This conflict demonstrates a deep rift in the community regarding the future use of the Bitcoin blockchain.
EthSystems Privacy Service and a New Era of Confidentiality
The Ethereum Foundation's privacy team has spun off into a commercial startup called EthSystems. The project aims to create blockchain solutions using zero-knowledge proofs (ZK-proofs) for institutional clients. This will allow banks and asset managers to conduct large transactions on Ethereum while fully concealing position details. The co-founders are former Ethereum Foundation employees, and the project is supported by Joseph Lubin. The business model is based on paid consulting and custom system development, a logical step for entering the corporate market.
Kimi K3: The Chinese AI Giant That Crashed the Chip Market
The main event of the week, extending beyond the crypto industry, was the launch of the Kimi K3 model by Chinese company Moonshot AI. With 2.8 trillion parameters and a context of 1 million tokens, it is the largest open AI model in the world. Its capabilities, including self-designing chips, caused panic in the semiconductor market. Chip manufacturer stocks plummeted globally: the Taiwan index lost over 6%, the Nasdaq fell by 1.5%, and Nvidia shares temporarily ceded the title of the most valuable company to Apple. The situation resembles the "DeepSeek effect" from January 2025, when the release of the Chinese R1 model led to a $590 billion loss in Nvidia's market cap in a single session.
Expert Opinion: The emergence of Kimi K3 is not just another technological breakthrough but a clear signal of the start of a new phase of competition in AI. Chinese developers are demonstrating the ability to create models that not only catch up but also surpass Western counterparts in several parameters. For the crypto market, this means increased volatility, as investors will reassess valuations of companies linked to chip production and AI development. In the short term, this could lead to a correction, but in the long term, it could result in diversification and the emergence of new, more efficient solutions at the intersection of blockchain and artificial intelligence.