The past week was eventful: Bitcoin managed to recover to $64,500, miners collectively ignored BIP-110, and the new Chinese AI model Kimi K3 sent shockwaves through the semiconductor market. Let's break down the key events in detail.
Bitcoin: From Fear to Cautious Optimism
The start of the week was alarming. The escalation of geopolitical tensions between the US and Iran, compounded by general macroeconomic uncertainty, drove Bitcoin down to $61,000. However, on July 14, the situation changed dramatically. The release of US Consumer Price Index (CPI) data showed that core inflation slowed more than expected — to 2.6% year-on-year against a forecast of 2.8%. This became a powerful catalyst for the entire crypto market.
A key driver of the rally was also the positive rhetoric from Fed Governor Kevin Warsh during his speech before Congress. The market interpreted this as a signal of potential monetary policy easing. As a result, Bitcoin surged to 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 amid the semiconductor industry crisis, the leading cryptocurrency recovered its losses and settled around $64,500, gaining about 1% over the week.
The Fear and Greed Index, although rising to 28 points, remains in the "red" zone, indicating persistent investor nervousness. Nevertheless, inflows into spot Bitcoin ETFs totaled $75.5 million for the week, marking the second consecutive "green" week. Ethereum funds also showed positive momentum with net inflows of $105.5 million.
Regulatory Battle Over the CLARITY Act
US Democratic Senators Chris Murphy, Jeff Merkley, and Chris Van Hollen sharply criticized the current version of the CLARITY Act. In their view, the bill, designed to delineate the powers of the SEC and CFTC and create a federal framework for regulating digital assets, lacks key anti-corruption provisions.
The senators insist on including clauses that prohibit the president, vice president, cabinet members, and other high-ranking officials, as well as their immediate family members, from owning or profiting from crypto businesses. The main focus is on the conflict of interest related to Donald Trump's and his family's cryptocurrency business. Consideration of the proposal is expected from July 20, and its adoption will require 60 votes in the Senate. This is a significant hurdle, but the very fact of such a firm stance by Democrats indicates that US crypto industry regulation will involve fierce political debates.
BIP-110: Miners' Failure and the Birth of DOG Mode
The BIP-110 initiative, aimed at limiting non-payment data in Bitcoin transactions (including OP_RETURN), met with almost complete disregard from mining pools. Over two weeks, no major pool signaled support, and the overall adoption rate barely reached 1% against the required 55%. The voluntary activation threshold expires in early August.
Against this backdrop, Runestone project founder under the pseudonym Leonidas presented an alternative solution — the DOG Mode client. Unlike BIP-110, DOG Mode does not require a majority miner vote for activation — just one is enough. This client increases the transaction limit from 400,000 to 3.9 million WU and lowers the "dust limit" to 1 satoshi, significantly simplifying the sending of Ordinals and Runes. Leonidas stated that Bitcoin Core and Bitcoin Knots had imposed rules for years that were not stipulated by consensus, and "the DOG army is no longer waiting for permission."
Kimi K3: AI Tsunami in the Semiconductor Market
Chinese company Moonshot AI unveiled its new open model Kimi K3, which became a real sensation. With 2.8 trillion parameters, native vision, and a 1 million token context, it trails only proprietary giants — Claude Fable 5 and GPT 5.6 Sol — in overall benchmark rankings. The model can conduct lengthy engineering sessions almost without human intervention, navigate large repositories, and even independently designed a chip for a neural network.
However, the main effect of Kimi K3's launch was not technological but market-driven. The news triggered a massive sell-off in chipmaker stocks worldwide. Taiwan's index lost over 6%, Japan's fell 4%, and the US Nasdaq dropped 1.5%. Shares of Chinese developer Z.ai plunged nearly 30% in Hong Kong. Nvidia temporarily ceded the title of the world's most valuable company to Apple. Investors compare this to the "DeepSeek effect," when Nvidia lost about $590 billion in market capitalization in a single session in January.
My Expert Perspective
The week showed that the market is in a state of fragile equilibrium. Macroeconomic data and positive Fed rhetoric offer hope for continued growth, but geopolitical risks and regulatory uncertainty remain serious obstacles. As for Kimi K3, it's not just another AI model. It's a signal that competition in the AI field is reaching a new level, and investors are beginning to reassess the value of companies that were previously considered undisputed leaders. For the crypto market, this means volatility may come not only from traditional finance but also from adjacent technology sectors.