(25/52) Weekly Market Insight | July Week 1 | Crypto Capital Drain

Headline News: Crypto Capital Drain

• ADriven by persistent inflation concerns, markets are now pricing in a 78% probability of a rate hike in 2026, implying 31 bps of tightening. This hawkish repricing, coupled with broader equity market weakness, has triggered significant capital flight from the digital asset sector. Consequently, Bitcoin spot ETFs saw a record $4.06 billion in monthly net outflows in June. Bitcoin has tumbled near 19% month-to-date, putting the asset on track for its worst monthly performance in four years.

Macro-Outlook: Ceasefire Violation

• After signing the ceasefire MoU agreement, Iran appeared to continue implementing its governance in the Strait of Hormuz and attacked a Singapore-flagged cargo ship. The US cited this as a direct violation of the MoU and struck multiple Iranian surveillance and military targets. Iran retaliated with drone strikes targeting US positions in Bahrain and Kuwait.
• The US PCE index surged to 4.1% in May, the highest in 3 years, in line with market expectations.
• The durable goods order fell by 4.5% in May, matched with market expectations, driven by a significant drop in transport equipment orders and non-defense aircraft and parts.
• The US Q1 GDP revised upward to 2.1%, up from 1.6% in the second estimate.
• The US personal income has grown by 0.7% in May, higher than the market expectations of 0.4%. US personal spending also increased by 0.7% in May, slightly higher than the market expectations of 0.6%.

The Upcoming Economic Calendar includes,

• Tuesday, June 30, 10:00pm: US JOLTs Job Openings in May
• Wednesday, July 1, 10:00pm: US ISM Manufacturing PMI in June
• Friday, July 2, 10:00pm: US Non Farm Payrolls and Unemployment Rate in June

Weekly-Cryptos-Overview: New Product-Driven Ethlabs

• Meta reportedly directed development of a standalone prediction markets app called “Arena” to rival Polymarket and Kalshi.
• Tether-backed Oobit integrated USDT with Brazil’s Pix instant payment network, giving nearly 170 million Pix users direct access to USDT.
• Kraken entered talks to acquire a 15% stake in Aave Group for approximately $71 million (via 35,000 ETH in exchange for 250,000 AAVE tokens plus equity) at an implied $385 million valuation. Aave founder dismissed potential sales of AAVE at a 70% discount in the reporting.
• Cboe launched its prediction market platform Cboe Predicts, along with its first products, binary options contracts on the Mini S&P 500 Index that are centrally cleared by the Options Clearing Corporation (OCC) and operate under the same regulatory and surveillance framework as standard US-listed options.

Layer 1 and Layer 2s

• Bittensor upgraded its core incentive mechanism with a new on-chain emission formula to ensure only subnets with active mining mechanisms receive full emissions. The change fixes structural gaming vulnerabilities in the prior system and explicitly ties emissions to price performance and real value returned to TAO holders.
• South Korea’s third-largest internet-only bank, Toss Bank, signed an MOU with the Solana Foundation to test Solana-based global remittance and stablecoin infrastructure.
• SBI Group and Startale launched JPYSC, Japan’s first trust bank-backed yen stablecoin. The launch provides institutional-grade credibility through traditional trust bank backing for on-chain yen representation and tokenized assets.
• Hyperliquid was added to the Monetary Authority of Singapore’s Investor Alert List.
• Sophon sunset its ZK-powered L2 and fully pivoted to building consumer applications on Base as Soph(+), a product studio focused on novel on-chain experiences. The first product, Pyre, introduces “entertainment finance” a daily payments app where payment transactions gain users game entries to access games.

Dapps

• Chainlink launched Project Pangea together with multinational banking consortia representing over 50 banks and over $10 trillion in AUM to develop a T+0 cross-border FX settlement framework. The initiative uses Chainlink infrastructure, ISO 20022 messaging standards, and regulated EUR/KRW stablecoins to enable atomic PvP swaps while leveraging existing SWIFT rails for institutional-grade, onchain FX without replacing core banking systems.
• Spark introduced the Stablecoin FX Layer, a shared liquidity infrastructure on Uniswap v4 designed to combat fragmentation as banks and fintechs launch new stablecoins. Initial deployment brought $150M liquidity into unified USDS/PYUSD and USDS/USDT pools, with its new DualPool hook allowing idle LP capital to earn yield via Spark while remaining instantly available for swaps.
• Uniswap Auctions went live with a new web app interface that lets teams configure and launch Continuous Clearing Auctions (CCA) directly from the Uniswap interface for permissionless, transparent onchain token launch and liquidity bootstrapping.
• Jumper, the leading swap aggregator, launched private swaps across 15+ chains in partnership with HoudiniSwap, giving users the option to execute cross-chain swaps with full privacy protection against MEV bots, copy-traders, and onchain trackers while maintaining the same multi-chain routing experience.
• Jupiter introduced Post Intents on its Offerbook, allowing users to signal borrow or lend interest completely offchain with zero gas fees and zero locked funds. When a match is found, the intent surfaces in the dashboard for one-click onchain execution.

Governance and Upcoming Alpha

• Ethlabs launched as a new independent non-profit R&D lab focused on Ethereum and ETH, with the mission of making Ethereum the neutral settlement layer of the global digital economy. The lab aims to accelerate protocol-level R&D, shared standards, and infrastructure where the ecosystem needs it most.
• Bittensor outlined its path to full programmatic decentralization and immutability, targeting completion within the next 18 months once key mechanisms mature. The update previewed upcoming work on conviction rights for alpha holders, symmetrical liquidity pools (enabling shorting), enhanced validator competition, and active exclusion of non-value-adding teams to reduce leakage before ossifying the chain like Bitcoin.
• NEAR announced SPICE, a major protocol upgrade currently in development that separates consensus from execution to unlock 200ms blocks. The change improves speed for NEAR Intents and NEAR network, enables smarter execution scheduling, and serves as a foundational step toward Nightshade 3.0 and atomic cross-shard execution. SPICE is expected to ship in the coming months and is designed to support machine-speed transactions for AI agents.

Token Unlock

• EIGEN token unlocks on July 1, representing 4.97% of the token supply.
• KITE token unlocks on July 1, representing 2.53% of the token supply.
• FF token unlocks on July 1, representing 3.3% of the token supply.
• EDGE token unlocks on July 2, representing 4.25% of the token supply.
• ZAMA token unlocks on July 2, representing 5.21% of the token supply.
• BB token unlocks on July 13, representing 10.9% of the token supply.
• PUMP token unlocks on July 14, representing 22.8% of the token supply.
• ZKC token unlocks on July 15, representing 5.16% of the token supply.
• VANA token unlocks on July 16, representing 4.47% of the token supply.
• SOLV token unlocks on July 17, representing 27.2% of the token supply.
• DBR token unlocks on July 17, representing 12.1% of the token supply.
• ERA token unlocks on July 17, representing 44.3% of the token supply.