reasons

Citigroup Research stated in the U.S. Economic Weekly published on July 2 that the U.S. non-farm payroll data for June showed a significant weakening, strongly refuting the necessity for interest rate hikes. Citigroup believes that several factors that previously supported a hawkish stance, including rising oil prices, accelerated wage growth, and core PCE above target, have gradually faded, stating that "the reasons for rate hikes have disappeared."Data shows that in June, the U.S. non-farm payrolls added only 57,000 jobs, far below expectations, and the data for the previous two months was revised down by a total of 74,000 jobs. After revision, the average monthly growth of non-farm payrolls over the past three months has dropped to about 111,000, a significant decline from over 180,000 before the revision. The unemployment rate in June fell from 4.296% to 4.189%, but Citigroup believes this is mainly due to the labor participation rate dropping from 61.8% to 61.5%. If the participation rate remains unchanged, the unemployment rate would actually rise to above 4.5%.Regarding inflation, Citigroup stated that multiple factors are collectively suppressing price pressures. Oil prices have fallen back to pre-conflict levels, and July CPI and PCE data are expected to show a month-on-month decline; further slowing of housing rents will also drag down core CPI and core PCE. In addition, the revision of the core PCE methodology will adopt a more reasonable price adjustment approach for AI-related goods. Citigroup estimates that the year-on-year growth rate of the revised core PCE may be adjusted down by 20 to 30 basis points, which will be officially reflected in September.Citigroup maintains its baseline forecast, expecting the Federal Reserve to remain on hold at the FOMC meetings in July and September, with the first rate cut of 25 basis points occurring at the meeting on October 28, followed by another 25 basis points cut in December, bringing the federal funds rate range down to 3.0% to 3.25% by the end of the year. Citigroup also expects the Federal Reserve to cut rates three more times in 2027, with a terminal rate range of 2.75% to 3.0%.

According to Jinshi reports, Federal Reserve officials hinted that they may need to raise interest rates soon rather than cut them, especially in the context of rapidly rising inflation. Evercore ISI analyst Krishna Guha stated that a decline in energy prices could provide relief, but the interest rate outlook has decoupled from oil prices, and there remains uncertainty about whether underlying inflation will cool. Claudia Sam, chief economist at New Century Advisors, pointed out that the conditions to prompt the Federal Reserve to respond to supply-driven inflation have not yet emerged, but she acknowledged that the reasons for taking action are accumulating.

According to official social media news, Huobi HTX will hold an online debate today at 20:00 (UTC+8) themed "U.S. stocks hitting new highs, yet BTC falls below 60,000: Behind the divergence, is it a narrative switch or capital abandonment?" At that time, Shiziyang, Jiao Yi Yuan 527, Shier, and Dr. Dinosaur will represent the affirmative side in dialogue with the negative side representatives Qibo Qian, Block Research, Panda, and Fang Wai Zhi Yu. Both sides will delve into the phenomenon of divergence between the current U.S. stock market and the cryptocurrency market, exploring popular topics such as market capital flow, the evolution of macro narratives, and future opportunities for Bitcoin, providing investors with a multi-dimensional market observation perspective.

European Central Bank Governing Council member Wunsch stated that a peace agreement between the U.S. and Iran reached before next week's European Central Bank meeting would not weaken the rationale for interest rate hikes. Wunsch said, "If a peace agreement is indeed reached on the eve of the meeting, it will become part of the discussion.But we cannot know if it is lasting or credible." He hinted at supporting a 25 basis point rate hike by the European Central Bank. He believes that if the conflict remains unresolved, discussions among policymakers before setting rates on June 11 "will be quite easy." If a peace agreement is reached between the U.S. and Iran, the discussions "may be slightly less easy. But the rationale for a rate hike may still exist, just not as strong." He stated, "At some point, we cannot let the market bear everything. We need to take a stand."

According to Jinshi reports, Bank of England Monetary Policy Committee member Green stated that the reasons for raising the key interest rate are strengthening.

Strategy CEO Phong Le stated in an interview with Fox Business that the company purchased $1.6 billion in Bitcoin during the second week of May, which is more than the total holdings of most Bitcoin treasury companies in a week.Phong Le mentioned that the current Bitcoin price is attractive, and the company will continue to buy Bitcoin. Although there may be short-term sales of some Bitcoin due to reasons such as utilizing unrealized tax losses, the long-term strategy is to continuously net increase Bitcoin holdings and focus on enhancing the number of Bitcoin per share.He views Bitcoin as "digital capital," believing it is superior to traditional stocks, bonds, and gold, and emphasized that the company will pass Bitcoin earnings to shareholders, similar to the operating model of Real Estate Investment Trusts (REITs).

OpenAI CEO Sam Altman published five operational principles under his personal signature and stated that in certain future periods, user access to model capabilities may be tightened for safety considerations, in order to strike a balance between empowerment and system resilience.Altman stated that key AI decisions should be driven by democratic processes and should not be determined solely by laboratories. He defended OpenAI's increased investment in computing power, the construction of data centers, and vertical integration strategies. He also mentioned potential challenges such as strong models possibly lowering the biological risk threshold, and reiterated OpenAI's continued iterative deployment strategy.

According to Jinshi reports, the Federal Reserve meeting minutes show that several officials stated that the oil shock could lead to further inflation, providing a reason to raise interest rates.

The infrastructure developer behind Optimism, OP Labs, announced the layoff of 20 employees, accounting for approximately 19.6% of the total team. Jing Wang, co-founder of Optimism and CEO of OP Labs, stated in an internal letter that the layoffs are not due to financial pressure, as the company currently has sufficient funds and years of cash flow reserves. This move aims to "streamline operations, accelerate decision-making, and reduce collaboration costs."Currently, Optimism is undergoing a transformation. Last month, Base, the largest chain in the OP Stack ecosystem, announced a shift to a self-developed unified tech stack, which raised market concerns about Optimism's long-term sustainability, leading to a roughly 37% drop in the price of OP tokens over the past 30 days. Despite the challenges, OP Labs has established a roadmap for 2026, focusing on faster block times, native interoperability, custom compliance controls, and a zero-knowledge proof (ZK Proof) system aligned with the Ethereum roadmap. Additionally, OP token holders had previously voted to allocate 50% of Superchain sequencer revenue for token buybacks.

According to official social media news, the decentralized contract trading platform SunX will hold a live stream today at 20:00 (UTC+8) titled "Gold and Silver Reach New Historical Highs | Is This a Flight to Safety or a New Round of Asset Pricing Reconstruction?" At that time, prominent crypto KOLs such as Big Brother, Xiao Zhi, Cong Ge, and Xihe will be invited to discuss the macro background of the recent historical highs in gold and silver prices, focusing on analyzing the risk-hedging logic behind the strength of precious metals, inflation expectations, and changes in liquidity. They will also further compare the pricing differences between gold, silver, and risk assets like Bitcoin in the current cycle.

Liquid Capital (formerly LD Capital) founder Yi Lihua expressed on social media:"The community is confused. Trend Research is buying heavily, BMNR and MicroStrategy are buying, Zhao Changpeng is calling for a super bull market cycle, yet the coin prices remain weak and volatile. What is the reason for this? After all, the stock market and gold/silver are skyrocketing. We see several main reasons including:Four-year cycle and the 1011 crashYen interest rate hikesNo new purchases in the U.S. BTC strategic reservesShort sellers taking advantage of the current situation to drive prices downSafe-haven funds in gold, silver, and the stock marketHowever, analyzing from a contrarian perspective, at a time when so many bearish factors are present, ETH remains stable, oscillating around 3000. This is also the reason we decided to build positions after liquidating at 4500. Many people suggested we wait to buy, as there would be better entry points, but investment trading does not have a god's eye view; it is difficult to know what the lowest point will be. The difference between investment and speculation is that we find it hard to engage in short-term trading; even if we have significant unrealized gains, we remain inactive, setting our buy and sell strategies based on a medium to long-term timeline."

According to Cointelegraph, Immunefi CEO Mitchell Amador stated that nearly 80% of crypto projects that suffered significant hacks never fully recover. The main reason is not the initial financial loss, but rather the collapse of operations and trust during the response process.Most protocols go into a state of paralysis the moment a vulnerability is exploited, leading to additional losses due to the lack of a predefined emergency plan. Data shows that crypto-related hacks will result in total losses of $3.4 billion in 2025, the highest level since 2022, with three incidents, including the $1.4 billion hack of Bybit, accounting for 69% of all losses as of early December.

According to The Block, U.S. Congress members Maxine Waters, Sean Casten, and Brad Sherman sent a letter on Thursday to Securities and Exchange Commission Chairman Paul Atkins, requesting an explanation for why the agency has paused multiple cryptocurrency enforcement cases, including the lawsuit against Tron founder Justin Sun.The lawmakers pointed out in the letter that since early 2025, the SEC has dismissed over a dozen crypto-related cases, including those against Binance, Coinbase, and Kraken, coinciding with a surge in political donations from the industry, raising concerns about a "pay-to-play" scheme. The letter mentioned that crypto companies donated at least $85 million to President Trump's re-election campaign, and the companies whose cases were dismissed had each contributed at least $1 million to Trump's inauguration.They specifically highlighted the Justin Sun case, noting that it has been on hold for 11 months, signaling that enforcement may be selective and that political influence could affect accountability. The legislators also issued a separate document preservation request, asking the SEC to provide all communications related to the decision to pause the Justin Sun case.

According to Jin Ten, Brian Jacobsen, Chief Economic Strategist at Annex Wealth Management, stated that while some may view the inflation cooling report as "unreliable," ignoring it comes with risks. He pointed out that indicators such as rental costs and used car prices suggest that the sources of current inflation are different from those in the past. The Federal Reserve may consider rising unemployment and moderate inflation data as reasons to cut interest rates again.

Bitcoin and Ethereum have erased all gains for the year—this is a sharp turnaround for a market that witnessed Bitcoin soar to a historic high of $126,000 just two months ago. VCs point out that there are two main reasons behind this round of correction: the liquidation event on October 11 and an increasingly difficult macro environment.Rob Hadick, a general partner at Dragonfly, stated that this deleveraging event, triggered by low liquidity, poor risk management, and weak oracle or leverage mechanisms, has caused significant losses and brought about tremendous uncertainty.Boris Revsin, a general partner and managing director at Tribe Capital, shares the same view, calling it a "leverage wash" that has created a ripple effect throughout the market. Meanwhile, the macro environment has also become less friendly: expectations for short-term interest rate cuts have faded, inflation remains stubborn, the job market is weakening, geopolitical risks are rising, and consumer pressures are increasing. VCs note that this series of factors has led to weak performance in most risk assets over the past two months.Anirudh Pai, a partner at Robot Ventures, further emphasized concerns about a slowdown in the U.S. economy. Key growth indicators—including the Citigroup Economic Surprise Index and the 1-year inflation swap (a derivative used to hedge against inflation risk)—have begun to weaken. Pai noted that this pattern has also appeared before previous recession concerns, driving broader risk-averse sentiment.Dan Matuszewski, co-founder of CMS Holdings, stated that aside from tokens supported by buyback mechanisms, the crypto market has seen almost no "incremental capital inflow," except for DAT (Digital Asset Treasury) companies. With new demand drying up and ETF inflows no longer providing effective support, price declines have accelerated.