Bitcoin bounces back after a rough first half

Every week, Amdax summarizes what’s happening in the crypto market for you. Want to dive deeper? Click on the links (if available) in this article for more insights.

Market update

Stay informed in three steps:

1. Bitcoin recovers on hopes for clearer crypto rules
Bitcoin continued its recovery this week, trading back around 66,000 dollars after the late-June low near 58,000 dollars. The turn came mostly from returning risk appetite and growing hope of a breakthrough in US crypto legislation. The broader altcoin market lifted along: ether moved back to about 1,900 dollars and most large crypto assets closed green, a sign investors are willing to take on risk again. Still, this looks mostly like a relief rally after a heavy first half, in which bitcoin fell from above 93,000 dollars to its lowest level in over eighteen months. Structural demand is not yet in sight.

2. Tensions in Middle East push oil prices higher
Outside crypto, the Middle East was restless, and that hit the market too. The US carried out attacks on Iran for the tenth day in a row, and Tehran responded with rocket and drone fire on neighboring countries. Another tanker was hit in the Strait of Hormuz, and Houthi threats in the Red Sea kept building. The result: oil prices shot up and kept climbing. Brent crude moved from around 70 dollars to about 95 dollars per barrel. Higher oil prices feed through into inflation, and that pushes rate expectations in exactly the direction the market did not want this week.

3. The CLARITY-Act starts moving after a Trump agreement
There was movement around the CLARITY-Act this week, the law that should finally give the US crypto sector regulatory clarity. For months it was stuck on the ethics rules, meant to prevent top officials from profiting from crypto they themselves supervise. Now there are reports that Trump has agreed to an ethics provision, described by the White House as the most far-reaching ever, and that the text has already been sent to Republican senators. The details are still unknown though, no Democrat has publicly backed the text yet, and seven Democrat votes are still needed to reach the required sixty. A possible breakthrough, then, but no done deal, with the summer recess in sight.

Tim's take

Two forces are pulling the market in opposite directions this week. On one side, crypto is bouncing back, carried by risk appetite and hope around the CLARITY-Act. On the other, rising oil prices are pushing inflation expectations higher, which weighs on the chance of rate cuts. Those two cannot both be right. Caution stays warranted: the recovery is real, but leans on a story that oil can easily knock over. The real test comes on July 28 and 29, when the Fed meets. And then there is the CLARITY Act. If the rumor about Trump agreeing to an ethics provision holds up, that could give the market a push, but as long as the details are missing, there is little reason to run ahead of it.