July Market Insight
July marked the first month of stabilisation following June’s capitulation, though the recovery was driven more by the absence of forced selling than by the return of allocation demand. Bitcoin closed the month up 7.32% near $63,000, and crypto was the best-performing major asset class: Ethereum gained close to 19%, its strongest month since August 2025, while the Nasdaq fell around 9% and semiconductor indices dropped more than 20%. Flow data told a different story. Spot Bitcoin ETFs recorded net inflows of just $172.4 million, the smallest monthly figure on record, and a $265.4 million outflow on 31 July flipped the final week negative. Exchange volumes fell to a three-year low and the Fear and Greed Index recovered only to 28.
Macro conditions were contradictory. The interim US-Iran agreement collapsed on 8 July, and WTI crude ended the month at $84.67 after opening below $70. June CPI fell to 3.5% from 4.2%, but the disinflation was heavily energy-driven and therefore fragile. Growth softened, with non-farm payrolls at 57,000 against 110,000 expected and advance Q2 GDP at 1.5%. The Federal Reserve held rates on 29 July for a fifth consecutive meeting, but the 9-3 vote was the most fractured hawkish dissent since September 2016. The 30-year yield rose to 5.21%, its highest since 2007, with September now priced at roughly 57% to 65% for a hike.
On the regulatory front, the CLARITY Act stalled. No cloture motion was filed, and prediction market odds for 2026 passage fell below 30% by month-end. SEC Chair Paul Atkins signalled the agency would issue crypto market rules under existing authority should Congress fail to act, making an administratively drawn perimeter the more likely outcome for 2026.
Tokenised equities were the defining industry development. Market capitalisation rose 50.3% to a record $2.26 billion, a fourth consecutive month of expansion, while monthly on-chain volume rose 288% to $11.3 billion. The volume figure requires qualification: Binance’s bStocks accounted for 83.3% of the total, with tokenised QQQ alone contributing $9.27 billion of largely self-referential flow. Market capitalisation is the cleaner signal and shows genuine broadening. Ondo’s share fell from 44% to 27%, Binance bStocks grew 195.2% and Securitize 121.8%, and Robinhood entered the rankings at $280 million. The DTCC moved tokenised Microsoft, Circle and ETF shares into live production on 15 July.
Elsewhere, Strategy made no Bitcoin purchases for a fifth consecutive week, building its USD reserve to a record $3.75 billion instead. The month closed with a Coldcard firmware exploit that drained at least 1,082 BTC, the largest failure of Bitcoin self-custody in several years.
August Market Outlook
Looking ahead to August, several factors will determine whether July’s stabilisation extends or reverses.
First, the July and August CPI prints are now the only inputs that meaningfully bear on the September decision. With crude back above $80, the energy-driven disinflation that produced June’s downside surprise is likely to partially reverse, and non-farm payrolls on 7 August is the first checkpoint.
Second, the CLARITY Act’s 2026 window effectively closes with the August recess. Absent a cloture filing, the base case shifts to market structure being set administratively through the SEC’s safe harbour and Regulation Crypto proposals.
Third, seasonality is unhelpful. August has closed negatively in nine of the past thirteen years, including four consecutive declines from 2022 to 2025 averaging approximately 10%, a pattern associated with thin summer institutional participation.
Fourth, participants should watch whether tokenised equity volume broadens beyond a single instrument. Near-term catalysts include the Hyperliquid and Circle revenue share going live on 26 August, xStocks’ planned launch of tokenised Hong Kong equities, and Binance US’s CFTC Designated Contract Market application for prediction markets.
Overall, July delivered stabilisation without conviction. Prices recovered because forced selling had exhausted itself rather than because demand returned, and the divergence between deteriorating flows and accelerating infrastructure build-out that we noted in June widened further.
