Matrixport Market Observation: BTC and ETH Reach New Highs, Can Capital and Policy Continue the Strength?

Last week (July 8 - July 14), BTC reached a new high, breaking the $120,000 mark, while ETH spot ETF inflows exceeded $900 million in a single week, setting a new record. On July 10, positive policy signals catalyzed market sentiment, and the BTC price rose to around $118,000 for consolidation. On July 14, driven by institutional funds, BTC refreshed its all-time high, briefly reaching $123,218, with a maximum weekly increase of 13.56%. Currently, the BTC price has retraced to around $117,000. ETH showed an "M" shaped upward trend last week, repeatedly breaking through $3,000, with a maximum weekly increase of 22.73% (Binance spot, July 15, 17:22).

Market Interpretation

BTC Breaks $123,000, Driven by Positive Policies and Safe-Haven Demand

BTC's price recently set a new high, breaking $120,000 and reaching a peak of $123,218, with a total market capitalization of $2.36 trillion. The daily chart shows a clear bullish trend, with increased trading volume and active market participation. This round of price increase was boosted by policy signals promoting blockchain infrastructure in Shanghai, heating up market sentiment. Meanwhile, the daily net inflow of the US spot BTC ETF reached $1.176 billion, a near three-month high, indicating continued institutional participation. Companies like MicroStrategy and Marathon Digital are continuously increasing their BTC holdings, reinforcing the "digital gold" narrative.

On a global level, under the expectations of tariffs and inflation, the demand for BTC as a safe haven has increased. Although blockchain applications are driven by policies, high leverage and regulatory uncertainties still exist, necessitating caution regarding short-term adjustments and market volatility. Overall, BTC is consolidating at high levels, with future attention on policy dynamics and capital flows.

Altcoin Sector Warms Up, Driven by Capital and Policy Expectations for Structural Trends

On July 10, BTC first broke through $120,000, with over 90% of the top 200 altcoins by market capitalization rising, and HBAR and SUI surging by 25% and 12%, respectively, while mainstream coins like ETH, SOL, BNB, and XRP also strengthened. Although BTC continues to set new highs, overall market sentiment remains rational, with FOMO significantly weakened, and investors' focus gradually shifting towards the altcoin sector.

Currently, while altcoins are generally rebounding, the overall increase has not met expectations, and the divergence between ETH and BTC's movements remains evident. With the warming expectations for ETF approvals and improved liquidity, altcoins are likely to welcome a catch-up rally. The real "altcoin season" may need to wait for the Federal Reserve's interest rate cuts, with August to September being a critical window.

USDT and USDC Supply Hits New Highs, Signaling Increased Market Liquidity

Recently, both Tether (USDT) and Circle (USDC) have reached historical highs in supply, with USDC's market capitalization increasing by $1.3 billion to $62.8 billion since July, and USDT increasing by $1.4 billion to nearly $160 billion. As core liquidity tools in the crypto market, the expansion of stablecoins is often seen as an important signal for new capital entering the market. This round of BTC and mainstream coin rebounds is highly synchronized with the continuous growth of the total stablecoin supply, reflecting ample exchange funds and a recovery in market risk appetite.

Market Highlights

"Genius Act" Passed by Senate, Key Turning Point for Stablecoin Regulation

On July 12, the U.S. Senate passed the "Genius Act," attracting widespread attention from the banking and legal sectors. The bill stipulates that stablecoin holders have priority claims in bankruptcy, and stablecoins must be 100% backed by highly liquid assets (such as U.S. Treasury bonds), with issuers required to disclose reserves monthly and possess freezing capabilities. The design of the bill aims to enhance user confidence and compliance thresholds, strengthening the linkage between stablecoins and traditional finance. The bill is currently awaiting review by the House of Representatives, and if successfully enacted, it could become a watershed moment for the compliance of stablecoins and the evolution of the industry landscape.

Hong Kong and South Korea Collaborate to Advance Stablecoin Regulation, Promoting Standardization

On August 1, Hong Kong's "Stablecoin Regulation" will officially take effect, requiring issuers to maintain a 1:1 reserve, conduct regular audits, and manage licenses. South Korea is paying close attention, and both sides are exploring stablecoin applications pegged to fiat currencies like the Hong Kong dollar and South Korean won, proposing multilateral cooperation initiatives. Currently, Hong Kong has attracted over 40 companies to apply for relevant licenses, and regional collaboration in Asia is expected to further promote the healthy development of the digital asset market.

Disclaimer: The above content does not constitute investment advice, sales offers, or purchase offers to residents of the Hong Kong Special Administrative Region, the United States, Singapore, or other countries or regions where such offers or invitations may be prohibited by law. Trading in digital assets may involve significant risks and volatility. Investment decisions should be made after careful consideration of personal circumstances and consultation with financial professionals. Matrixport is not responsible for any investment decisions made based on the information provided herein.