Steepest monthly inflation drop since 2020

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Market update

Stay informed in three steps:

1. Inflation lower than expected, bitcoin rises immediately
Tuesday's US inflation figures came in well below expectations. Annual inflation fell from 4.2 percent to 3.5 percent in June, comfortably under the 3.8 percent forecast. Month on month, prices dropped 0.4 percent, the steepest monthly decline since April 2020. The main driver was a sharp fall in energy prices after the temporary reopening of the Strait of Hormuz. Core inflation also beat expectations at 2.6 percent year on year, against a forecast of 2.9 percent. Bitcoin responded right away, climbing from around 61,500 dollars to 64,000 dollars in the hours after the release. The odds of a September rate hike dropped from over 75 percent to 63 percent. Relief is present, but the energy component that helped in June is already reversing as the Iran conflict flares up again.

2. Iran conflict flares up again, ceasefire definitively over
The ceasefire, set down in a memorandum of understanding on 17 June, was fragile from the start. The deal reopened the Strait of Hormuz but left crucial questions about Iran's nuclear program unanswered. On 8 July, it collapsed for good after Iran fired on several commercial vessels in the Strait. Trump declared the ceasefire over during the NATO summit in Ankara, after which the US struck around 90 Iranian targets. Iran hit back with attacks across the region, including on Qatar, Bahrain and Kuwait. Oil rose more than 9 percent on the news, and the US announced it would resume its naval blockade of Iranian ports. Behind the scenes, Oman is working on a proposal to route traffic through the Strait via two separately controlled lanes, but there is no agreement yet.

3. Robinhood builds its own blockchain
On 1 July, Robinhood launched the public version of Robinhood Chain, its own blockchain built on Ethereum. This week it became clear the launch had landed. Daily trading volume peaked at over 560 million dollars on 8 July. The total value locked on the network quadrupled in under two weeks, from 39 million dollars on day three to 130 million dollars on 12 July. The headline product is Stock Tokens: digital versions of shares like Apple, Nvidia and Google, tradable 24 hours a day in more than 120 countries.

Ries' take

The conflict with Iran is flaring up again, the ceasefire is over and oil is climbing once more. And still, bitcoin sits at 62,000 dollars. Tuesday's inflation figures were the best news in months, and the market simply traded on that. No panic over Iran, no big sell-off. That tells you something. If inflation keeps falling, the second half of the year could look very different from the first. The conflict in the Middle East remains a risk, but for now bitcoin is holding its ground.