The past week was eventful: Bitcoin recovered to $64,500, miners ignored BIP-110, and the launch of the Chinese AI model Kimi K3 triggered a collapse in the semiconductor market. Additionally, a political conflict is brewing in the US over the CLARITY Act bill.
Bitcoin: Pullback and Recovery
The week started bearish: amid escalating geopolitics and macroeconomic uncertainty, the price of the first cryptocurrency fell to $61,000. However, the release of the US Consumer Price Index (CPI) on July 14 changed the situation. The core index (excluding food and energy) stood at 2.6% annually against a forecast of 2.8%, signaling a stronger-than-expected slowdown in inflation. This, coupled with dovish rhetoric from Fed Governor Kevin Warsh, pushed the market upward.
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, Bitcoin, along with traditional markets, declined due to the crisis in the semiconductor sector but recovered by the weekend. At the time of writing this analysis, the asset is trading around $64,500, representing a gain of approximately 1% over the week.
Altcoin Dynamics and ETFs
The top 10 assets showed mixed dynamics. Ethereum rose 4% to $1,850, while HYPE lost about 8%. Spot Bitcoin ETFs completed their second consecutive "green" week, attracting net $75.5 million between July 13 and 17. Ethereum funds followed the same trend, receiving $105.5 million in net inflows.
The Fear and Greed Index rose to 28 points but remains in the "fear" zone, indicating continued investor caution. The total market capitalization stands at $2.27 trillion, with Bitcoin dominance at 57% and Ethereum's share at 9.9%.
Political Front: CLARITY Act Under Threat
Three Democratic senators — Chris Murphy, Jeff Merkley, and Chris Van Hollen — have opposed the current version of the CLARITY Act bill. In their view, the document, designed to delineate the powers of the SEC and CFTC and create a federal regulatory framework, lacks anti-corruption provisions. They demand the inclusion of clauses prohibiting the president, cabinet members, and congressmen from owning or profiting from crypto businesses. Consideration of the proposal is expected starting July 20, and 60 votes will be required for its passage.
Miners Against BIP-110
The BIP-110 initiative, which limits non-payment data (OP_RETURN and scripts) in Bitcoin transactions, did not receive support from miners. Over two weeks, no major mining pool signaled support — the adoption rate hovers around 1% against the required 55%. The activation threshold expires in early August. Against this backdrop, Runestone founder under the pseudonym Leonidas presented an alternative — the DOG Mode client, which does not require a majority vote and significantly simplifies sending Ordinals and Runes.
New AI Model Crashes Chip Market
China's Moonshot AI released the open-source Kimi K3 model with 2.8 trillion parameters and a context of 1 million tokens. Developers claimed that, based on aggregate benchmarks, it is second only to proprietary solutions from Anthropic and OpenAI. The launch triggered a massive sell-off in chipmaker stocks: Taiwan's index lost over 6%, Japan's fell 4%, and the Nasdaq dropped 1.5%. Nvidia temporarily ceded the title of the world's most valuable company to Apple. Investors compare the situation to the "DeepSeek effect," when a similar launch in January 2025 cost Nvidia $590 billion in market capitalization.
Expert Commentary
In my view, the week showed that the market continues to be in a phase of uncertainty. On one hand, macroeconomic data and ETF inflows support optimism. On the other hand, political risks in the US and volatility in the AI sector create pressure. BIP-110 will likely fade into oblivion, but Kimi K3 could become a serious trigger for a reassessment of semiconductor giants' valuations, indirectly affecting the crypto market as well.