7.27 AI Daily Crypto Assets market is full of ups and downs, regulatory policies lead future development

1. Headline

1. The surge in demand for Ethereum staking redemption, along with the introduction of a 2% reward, may be the main reason.

Recently, a 2% matching reward program has been launched for cryptocurrency transfers. According to analysis, this initiative may lead venture capitalists and other investors to transfer their staked ETH to treasury companies in order to double their funds after the lock-up period ends. Similar to MicroStrategy and Grayscale, treasury company stocks have become a way for brokerage firms to offer clients investment opportunities in Bitcoin and Ethereum.

This plan may explain the recent surge in demand for Ethereum staking redemptions. Data shows that in the past 72 hours, 310,000 ETH worth $1.15 billion has been withdrawn from trading platforms. In addition, this week, net inflows for U.S. spot Ethereum ETFs reached $1.8465 billion, far exceeding the $72.3 million net inflow for Bitcoin ETFs during the same period.

Analysts point out that this reward program provides investors with a new channel to acquire crypto assets, helping to drive institutional investors to increase their allocation to Ethereum. As regulations become clearer and institutional demand grows, Ethereum is gaining more recognition as a programmable reserve asset. In the future, the rapid compliance of the Ethereum ecosystem may provide it with more growth momentum.

2. After the approval of the Bitcoin spot ETF application, the BTC price rose by 250% but volatility decreased.

Well-known cryptocurrency analyst Plan B recently pointed out in a post that since BlackRock submitted its application for a Bitcoin spot ETF, the price of BTC has risen by 250%, but volatility has decreased. This finding may suggest that the approval of Bitcoin ETFs by regulatory agencies will help enhance the maturity and stability of the cryptocurrency market.

Bitcoin spot ETFs have long been seen as a key factor in driving large-scale entry of institutional investors. If approved for listing, traditional investors will be able to invest in Bitcoin more conveniently, thereby bringing more capital inflow into the cryptocurrency market. At the same time, the launch of ETF products will also increase market transparency, which is beneficial for attracting more institutional funds.

In addition to spot ETFs, the approval and listing of futures ETFs will also pave the way for institutional investors to participate in the Bitcoin market. According to analysts' predictions, once regulatory approval is granted, the price of Bitcoin may rise further. However, the extent of the price increase and how volatility will change remain to be seen.

3. The Hong Kong "Stablecoin Regulations" will come into effect on August 1, initially issuing only a few licenses.

The Hong Kong "Stablecoin Regulations" will officially take effect on August 1. At that time, the Financial Management Authority will release a summary of the licensing system, and applicants must meet anti-money laundering and other requirements. Analysts expect that only a few licenses will be issued initially, and the promotion of unlicensed stablecoins will be criminalized.

This regulatory measure aims to regulate the stablecoin market in Hong Kong and maintain financial stability. Stablecoin issuers are required to obtain a license and undergo strict scrutiny and supervision to ensure their operations comply with relevant regulations. In addition, the issuance and circulation of stablecoins will also be subject to stricter controls.

The Hong Kong Monetary Authority stated that the "Stablecoin Ordinance" will create a favorable environment for the stablecoin market, improve transparency, and enhance investor confidence. At the same time, the legislation will also ensure the healthy development of Hong Kong's financial system and prevent systemic risks.

However, industry insiders point out that overly strict regulation may hinder innovation and impact Hong Kong's development as a fintech hub. Therefore, finding a balance between risk regulation and innovative development will be a question that Hong Kong regulators need to consider carefully.

4. Russian entities use Kyrgyzstan's crypto platform to evade sanctions, raising regulatory concerns.

According to a report by blockchain intelligence firm TRM Labs, Russian entities are using Kyrgyzstan's cryptocurrency platforms to evade sanctions. Crypto trading activities related to Russia account for almost all of the country's cryptocurrency industry, while Kyrgyzstan's cryptocurrency sector "barely existed" before the 2022 Russia-Ukraine war.

This discovery has raised significant concern among regulatory authorities. Analysts point out that Russia is attempting to exploit regulatory loopholes in the cryptocurrency market to evade economic sanctions imposed by Western countries, which not only jeopardizes the effectiveness of the sanctions but may also fuel illegal capital flows.

To curb such behavior, regulatory agencies in various countries need to strengthen the supervision of cryptocurrency transactions, improve anti-money laundering and counter-terrorism financing mechanisms. At the same time, cross-border regulatory cooperation should be enhanced to close sanction loopholes and ensure the effective implementation of sanctions.

In addition, cryptocurrency exchanges and other service providers should also take on greater responsibility to strengthen customer identity verification and transaction monitoring, to prevent platforms from being used for evading sanctions and money laundering activities. Only through the concerted efforts of all parties can the integrity and stability of the financial system be maintained.

5. India's cryptocurrency regulation is at an impasse, calling for a "rights-first" regulatory framework.

India's cryptocurrency policy is currently in a "regulatory standstill" state. To address this predicament, analysts are calling for the country to implement a "rights-first" regulatory framework that grants residents the "constitutional-level" right to self-custody of assets.

For a long time, the Indian government has had divergent views on the regulation of cryptocurrencies. On one hand, institutions like the central bank advocate for a complete ban, while on the other hand, some policymakers prefer a more cautious regulatory approach. This divergence has led to a stagnation in regulation.

Analysts believe that India should learn from the practices of other countries to establish a clear regulatory framework for cryptocurrencies. At the same time, this framework should start from the protection of citizens' rights, granting citizens the right to manage their assets autonomously, rather than simply prohibiting or over-regulating them.

Only on the basis of rights and freedoms can the cryptocurrency market achieve orderly development. Relevant regulatory measures should also focus on preventing risks and maintaining financial stability, rather than complete prohibition. Analysts call on the Indian government to quickly end the regulatory deadlock and create a favorable environment for the development of cryptocurrencies.

2. Industry News

1. Bitcoin volatility has dropped to historic lows: there will no longer be frenzied bull markets and despairing bear markets.

Blockware BTC analyst Mitchell Askew stated that Bitcoin will no longer experience "parabolic" price increases or "devastating" bear markets, as BTC exchange-traded funds (ETFs) have permanently reduced volatility and changed market dynamics. Bitcoin looks like two completely different assets before and after the launch of the ETF, and will reach $1 million within the next 10 years through continuous fluctuations of "ups" and "consolidations." This journey will bore everyone and squeeze short-term speculators out of the market.

The chart shared by Mitchell Askew shows that since the launch of the Bitcoin ETF in the U.S. in January 2024, the price volatility of Bitcoin has significantly decreased. Bloomberg's senior ETF analyst Eric Balchunas previously stated that the reduction in volatility helps Bitcoin attract larger investors and provides a glimmer of opportunity for its adoption as a currency, but the cost may be the potential loss of "legendary candlestick patterns." Spot ETFs further intertwine traditional finance, institutional investors, and the cryptocurrency asset market.

2. Ethereum regains the $3800 level, targeting a new all-time high

Ethereum ( ETH ) has reclaimed the $3800 price level, aiming for $4000. Due to short-term forced liquidations and bullish indicators such as the golden cross pattern, analysts expect ETH to possibly reach a new all-time high soon. On-chain data analyst Murphy stated that the activity of "new buyers" of ETH has been very active since July 20, indicating strong demand for ETH from new capital. Long-term holders are also maintaining a certain level of accumulation while ETH prices are consolidating. Meanwhile, there aren’t many profit-taking sellers, suggesting that most holders of floating profits are not satisfied with ETH's current price, demonstrating strong confidence in holding.

From the on-chain activity data of ETH, the number of transactions is approaching the historical high of May 2021, and the transfer amount ( USD value ) is also rising rapidly. This indicates that the market demand for Ethereum continues to grow, especially with the upcoming "Fusaka" upgrade. Analysts believe that Ethereum is transforming from a misunderstood asset into a scarce, programmable reserve asset, providing security and momentum for a rapidly compliant on-chain ecosystem.

3. The altcoin market signals a third 250x expansion, targeting a total market cap of $3.6 trillion.

The altcoin market is exiting its accumulation phase, similar to 2017 and 2021, indicating a potential 250x bullish rally. Based on the recurring cycles, the next expansion of the altcoin market cap could push valuations to around $36 trillion. Technical indicators show the same bullish crossover signals.

The market dominance of Bitcoin is 61.3%, facing resistance close to 64%, which could lead to a significant surge in altcoins. Analysts suggest that a pullback may trigger capital rotation into undervalued altcoins, driven by bullish signals in altcoin market capitalization and bearish indicators in Bitcoin's dominance.

Despite the recent price drop, the influx of investors suggests a renewed focus, and assets have found key support levels. Analysts predict a fourfold return this year, and whales are quietly shifting towards emerging payment altcoins like Remittix. Compared to market expectations, the performance of altcoins may be better, prompting industry participants to reassess innovation and real use cases.

4. The stablecoin market has surpassed $260 billion, and regulatory changes may reshape the market landscape.

In the past week, the market capitalization of stablecoins has exceeded $260 billion, primarily due to the new issuance of Tether. The competition among stablecoins is intensifying, with alternatives like USDe and USDS gradually gaining attention, while regulatory changes may further reshape the market landscape. The stablecoin economy is showing strong growth, with no signs of slowing down.

Tether plans to launch an institutional stablecoin, the SEC is considering an innovation exemption policy, Trump's media group has Bitcoin assets worth $2 billion, Christie's has established a cryptocurrency real estate department, Polymarket is evaluating the issuance of its own stablecoin, while the ETH exit and entry queue numbers on Ethereum have significantly increased, reflecting market fluctuations.

Financial management departments and industry self-regulatory organizations in multiple regions have consecutively issued risk warning announcements, indicating that with the rising popularity of stablecoins, some illegal activities by criminals using stablecoins as a gimmick have emerged, and their potential risks warrant high vigilance. The "Stablecoin Regulation" in Hong Kong will take effect on August 1, and the Financial Management Bureau will release a summary of the licensing system, with applicants required to meet anti-money laundering and other requirements.

3. Project News

1. Su Network launches the SuiPlay gaming platform, leading the new wave of Web3 gaming.

Sui is a brand new Layer 1 blockchain network developed by Mysten Labs. It utilizes the Move programming language and a new type of execution engine, aiming to provide a blockchain experience with high throughput, low latency, and high energy efficiency.

Recently, Su has launched the SuiPlay gaming platform, which is an ecosystem focused on Web3 games. SuiPlay will provide game developers with tools and resources to help them build high-performance, secure, and scalable Web3 games. The platform will also offer players a one-stop gaming experience, allowing them to easily discover and experience a variety of Web3 games.

The launch of SuiPlay marks the official entry of the Sui network into the Web3 gaming sector. With its innovative technological architecture, Sui is expected to bring a new experience to Web3 gaming. SuiPlay will become an excellent choice for Web3 game developers and players, and is likely to drive the development of the entire Web3 gaming ecosystem.

Industry insiders generally believe that the launch of SuiPlay will bring new vitality to Web3 gaming. Some analysts indicate that the technological advantages of Su络 will help attract more game developers and players to join the Web3 gaming space, thereby driving the entire industry forward.

2. Aptos launched the Aptos Incentivized Testnet to encourage community participation in testing.

Aptos is an emerging Layer 1 blockchain network created by former Meta employees. It uses the Move programming language and aims to provide a high-performance, secure, and scalable blockchain experience.

Recently, Aptos launched the Aptos Incentivized Testnet, which is an incentivized testing network. This test network will provide token rewards to participants to encourage them to participate in testing and identify potential issues. This not only helps with the stability and security of the Aptos network but also promotes community engagement and development.

The launch of the Aptos Incentivized Testnet reflects the Aptos team's commitment to community participation. Through incentive mechanisms, Aptos aims to attract more developers and enthusiasts to join the testing and collaboratively build a more robust blockchain network.

Industry insiders generally believe that the launch of the Aptos Incentivized Testnet will help improve the quality and reliability of the Aptos network. Some analysts have stated that this incentive mechanism can not only attract more people to participate in testing but also promote the development of the Aptos community, thereby laying the foundation for the long-term development of the Aptos network.

3. Cetus was attacked by hackers, resulting in losses exceeding 200 million dollars.

Cetus is a decentralized exchange built on the Su network. It aims to provide users with secure and efficient cryptocurrency trading services.

Recently, Cetus was hacked, resulting in the theft of over $200 million in cryptocurrency. This is the first major security incident on the Sui network, severely impacting the entire Sui ecosystem.

According to the Cetus team, hackers exploited a vulnerability in a smart contract, bypassing security mechanisms to steal funds from the exchange. Cetus has suspended all trading and is working with security experts to investigate the cause of the incident and recover the stolen funds.

This incident has raised questions among industry insiders about the security of the Su network. Some analysts have stated that, despite the Su network claiming to have advanced security mechanisms, this incident shows that it still has some vulnerabilities and flaws. Others believe that this is just an isolated event and should not be overinterpreted.

Regardless, the Cetus hacking incident has sounded the alarm for the entire Sui ecosystem. Sui network and ecosystem projects need to strengthen security audits and risk control to ensure the safety of user funds and data. At the same time, user security awareness also needs to be raised to prevent such incidents from occurring.

4. The Aptos Foundation announced a partnership with Google Cloud.

Aptos is an emerging Layer 1 blockchain network created by former Meta employees. It uses the Move programming language and aims to provide a high-performance, secure, and scalable blockchain experience.

Recently, the Aptos Foundation announced a partnership with Google Cloud. According to the agreement, Google Cloud will provide infrastructure support and technical services for the Aptos network to ensure high performance and reliability.

This collaboration is significant for the Aptos network. Google Cloud has industry-leading cloud computing technology and extensive industry experience, which can provide strong technical support for the Aptos network. At the same time, this also helps to enhance the visibility and influence of the Aptos network, attracting more developers and users to join.

Industry insiders generally believe that the collaboration between Aptos and Google Cloud is a win-win situation. For Aptos, it can leverage Google Cloud's technological advantages to enhance network performance and reliability. For Google Cloud, this is an important opportunity to enter the blockchain space.

Some analysts indicate that this cooperation model may be further promoted within the blockchain industry. As blockchain technology continues to develop, more and more tech giants may collaborate with blockchain projects to provide technical support and services.

Overall, the collaboration between Aptos and Google Cloud marks a new development stage for the Aptos network. In the future, we can expect greater development and progress for the Aptos network with the support of Google Cloud.

4. Economic Dynamics

1. Ahead of the release of GDP and employment data, Powell faces unprecedented pressure.

Economic Background: The U.S. economy has experienced multiple pressures in the past year, including high inflation, rising interest rates, and economic slowdown. The latest data shows that the annualized GDP growth rate for the first quarter in the U.S. is -0.5%, with the inflation rate hovering around 6%, and the job market remains relatively robust. However, there are many uncertainties regarding the economic outlook.

Important Event: Federal Reserve Chairman Powell will host the Federal Open Market Committee ( FOMC ) meeting next week and announce whether to raise interest rates. This meeting coincides with the U.S. government's release of key economic data such as the second quarter GDP and July employment report, which will provide important references for Powell's decision-making. Meanwhile, the Trump administration has exerted unprecedented pressure on Powell to slow down the pace of interest rate hikes to support economic growth.

Market Reaction: Investors are highly focused on Powell's decisions. If GDP and employment data perform strongly, Powell may maintain a rate hike stance to curb rising inflation. However, if signs of economic slowdown intensify, he may pause rate hikes to avoid stifling the economic recovery. Regardless of the decision, it could trigger significant market volatility.

Expert opinion: Former Federal Reserve Chairman Alan Greenspan stated that the pressure faced by Powell is unprecedented. He needs to seek a balance between supporting economic growth and controlling inflation. Economist Paul Krugman believes that Powell should stick to gradual interest rate hikes to avoid triggering financial turmoil. Meanwhile, former White House economic advisor Larry Lindsey calls for Powell to pause interest rate hikes to give the economy some breathing room.

2. Trump market tide recedes, Japanese investors on high alert to face central bank decisions and earnings season

Economic background: Japan's economy has performed strongly over the past year, benefiting from export growth and a rebound in corporate investment. However, the inflation rate has been persistently low, and the unemployment rate has also risen, presenting numerous challenges to the economic recovery.

Important events: The United States and Japan unexpectedly reached a trade agreement, causing a surge in Japanese stocks and pushing down the yen. However, this "Trump rally" subsequently experienced a pullback. Meanwhile, the Bank of Japan will announce its interest rate decision next Thursday, with market expectations that rates will remain at a very low level. Additionally, a large number of Japanese companies will release their latest financial reports, and investors will closely monitor their performance.

Market Reaction: Investors have differing views on the outlook for the Japanese economy. Optimists believe that trade agreements will bring new export opportunities for Japanese companies. However, pessimists are concerned that a global economic slowdown may weigh on Japanese exports. Central bank decisions and corporate earnings reports will be key references for investors' judgments.

Expert Opinion: Mizuho Bank economist Vishnu Varathan stated that the benefits brought by trade agreements have been absorbed by the market, and investors will shift their focus to domestic risks. Nomura Securities analysts pointed out that corporate earnings reports will reveal their resilience in a high tariff environment. Bank of Japan Governor Haruhiko Kuroda may reiterate the accommodative policy to support economic growth.

3. Goldman Sachs warns that USD is entering a long-term downtrend

Economic Background: The US Dollar Index ( DXY ) has fallen by about 10% this year, mainly due to the widening of the US current account deficit and expectations of a global economic slowdown. However, the US economy remains relatively strong compared to other developed economies, with a resilient job market.

Key Event: Goldman Sachs issues a report warning that the dollar may have entered a long-term decline. The firm believes that despite the good condition of the U.S. economy, the dollar is currently overvalued, primarily due to the significant U.S. current account deficit. Goldman Sachs expects this downward trend to continue for several years.

Market Reaction: The Goldman Sachs report has raised concerns about the long-term outlook for the US dollar. The dollar index has further declined since the report was released. Some investors are beginning to seek alternatives to the dollar, such as gold and other safe-haven assets. Meanwhile, emerging market currencies and commodity currencies have strengthened.

Expert Opinion: Goldman Sachs' views have gained some recognition among analysts. Allen Von Deventer, a foreign exchange strategist at Deutsche Bank, stated that it is an undeniable fact that the dollar is overvalued, with the key being the extent and speed of the depreciation. However, some analysts are skeptical, believing that the relative strength of the U.S. economy will continue to support the dollar. Bhanu Baweja, a foreign exchange strategist at UBS, believes that the decline of the dollar may be temporary.

5. Regulation & Policy

1. Many places have issued risk warnings, be cautious of "stablecoin" scams.

Policy Background

With the rising popularity of the concept of stablecoins in the cryptocurrency market, financial regulatory agencies and industry self-regulatory organizations in some regions have recently issued risk warning announcements aimed at alerting investors to the risks of illegal activities conducted by criminals using "stablecoins." This reflects the high level of attention that regulatory bodies are paying to emerging crypto assets, hoping to mitigate potential risks through timely warnings.

Policy content

The announcement emphasizes that investors must verify the legitimate qualifications of relevant institutions and products through official channels before making any investment decisions. It calls on investors to fully understand the high complexity and volatility of digital currencies such as "stablecoins" and related innovative concepts, and to establish correct monetary concepts and rational investment ideas. The announcement also requires investors to consciously resist and stay away from any form of virtual currency speculation, illegal token issuance, and unapproved "digital asset" investment projects, in order to effectively protect personal property safety.

Market Reaction

The release of such risk warning announcements has attracted significant attention from the market. On one hand, stablecoins, as an important component of the cryptocurrency market, are under close scrutiny regarding their development prospects and regulatory policies. On the other hand, with the rising interest in the concept of stablecoins, the risk of illegal activities conducted by criminals using this concept has also increased, making the reminders from regulatory authorities timely and targeted.

Expert Opinion

Blockchain legal experts state that stablecoins, as an important component of the cryptocurrency market, require the formulation of regulatory policies that balance innovation and risk control. On one hand, the development of stablecoins contributes to the healthy growth of the cryptocurrency market, providing investors with more options; on the other hand, regulatory authorities need to be vigilant against the risks of illegal activities conducted by criminals exploiting emerging concepts. Experts suggest that regulatory bodies should maintain close communication with the industry, establish clear regulatory rules, and create a favorable environment for the development of stablecoins.

2. The U.S. Senate Banking Committee has introduced a discussion draft of the CLARITY Act.

Policy Background

The U.S. Senate Banking Committee recently released a discussion draft on the CLARITY Act ( Market Structure Act ), aimed at clarifying the role of the U.S. Securities and Exchange Commission ( SEC ) in regulating the crypto market. Previously, the U.S. House of Representatives had voted to pass the bill, but it still needs to be approved by the Senate and signed by the President to take effect. The introduction of this bill reflects the U.S. government's high emphasis on cryptocurrency regulation, hoping to create a favorable regulatory environment for the crypto market through legislation.

Policy Content

The draft discussion proposed the concept of "ancillary assets" to clarify the specific meaning of digital assets. The draft invites the public to provide comments and suggestions before early August. The launch of this draft aims to prepare for the final passage of the "CLARITY Act", clarifying the SEC's responsibilities and authorities in the regulation of the cryptocurrency market. The White House cryptocurrency director stated that the Trump administration will continue to support the passage of the act to fulfill its campaign commitments in the cryptocurrency sector.

Market Reaction

The advancement of the "CLARITY Act" has received widespread attention from the cryptocurrency market. On one hand, the act is expected to bring clearer regulatory rules to the cryptocurrency market, creating a favorable environment for industry development; on the other hand, some industry insiders are concerned that excessive regulation may stifle innovation. Overall, the market holds a cautiously optimistic attitude towards the act, hoping it can balance regulation and innovation.

Expert Opinion

Cryptocurrency legal experts believe that the introduction of the CLARITY Act is an important signal from the U.S. government acknowledging the regulatory issues surrounding cryptocurrencies. The Act is expected to bring more clear regulatory rules to the cryptocurrency market, creating a favorable environment for industry development. However, experts also point out that the Act may face some challenges during its implementation, such as how to balance regulation with innovation and how to define the scope of digital assets, which require further discussion and refinement.