Bitcoin is approaching its all-time high, eclipsing $68,000. With this surge in price, Bitcoin is closing in on silver's $1.4 trillion market cap. Meanwhile, Ethereum also hit a significant milestone, surpassing $3,700 for the first time since January 2022. This comes on the back of record inflows into BlackRock and other funds’ spot Bitcoin ETFs.

Bitcoin broke its all-time high yesterday, eclipsing $69,000 before swiftly dropping to $59,700 after a sharp sell-off. This sharp drop led to over $1 billion in liquidations, one of the largest liquidation events since the last cycle. In the hours after this liquidation cascade, Bitcoin recovered to $62-$63k with overall leverage at a much lower level.

Bitwise highlights Bitcoin's ability to let users hold and control their wealth independently of centralized institutions. Despite its volatility and lack of governmental endorsement, Bitcoin's value is underpinned by its scarce supply and high demand. Bitcoin skeptics fail to appreciate its resistant nature to censorship and the fundamental market principles that determine its pricing.

The cryptocurrency market sharply declined over the weekend, with the broader market falling around 10% on Saturday. Though there is no concrete reason for this drop, some popular reasons include dropping liquidity because of tax payments due on April 15th and the Iranian drone strikes against Israel. The market recovered slightly after Iran's Permanent Mission to the United Nations said its strikes were concluded.

$256 million worth of long positions were liquidated in Bitcoin's recent price drop. Analysts expect this to be a short-term downturn before the market improves. Despite the dip, demand from Bitcoin whales is growing, with demand from holders outstripping the market supply of new Bitcoin for the first time.

Bitcoin spot ETFs recorded a total net inflow of ~$129M on July 1, marking five consecutive days of net inflows. Fidelity's FBTC and Bitwise's BITB ETFs achieved ~$65M and $41M in single-day inflows.

Bitcoin's recent price rebound above $57k was supported by record-high inflows into U.S. spot BTC ETFs of around $300M on July 8th, the highest since early June. Institutional investors seem to be using the price dip as a buying opportunity.

If elected, Robert F. Kennedy Jr. promises to make Bitcoin non-taxable and direct the treasury to buy 4 million BTC, saying it would make Bitcoin worth “hundreds of trillions of dollars.” MicroStrategy's Michael Saylor explained that his 2045 bear case is $3M, base case is $13M, and bull case is $49M per coin.

Bitcoin hit its lowest price since February, and the rest of the market saw greater than 20% decreases in one of the biggest selloffs since FTX. Investors are reacting to several events, including Jump Crypto liquidating hundreds of millions of dollars of assets, the increasing chances of a Kamala Harris presidency, and a sharp decline in Japan's stock market. There are also fears about an impending recession, and ETHE investors are selling their positions in the Grayscale trust.

Bitcoin's service is the trustless storage of wealth without relying on a centralized intermediary. Like a company offering a service, if more people want BTC's service and buy the asset, the price increases, and vice versa. There is no centralized entity to collect this value - it accrues to prior BTC holders.

The number of Bitcoin wallets containing large amounts (1,000+ BTC) has grown by 3.5%, and very small amounts (0.0001 BTC or less) by ~75% over the last year. Meanwhile, wallets with medium amounts of BTC (1-10 BTC) have decreased, indicating a redistribution of holdings across both extremes of the wealth spectrum.

Bitcoin has recently surged past the $65,000 mark, driven by positive U.S. jobs data and expectations of further economic stimulus from China. This rally in Bitcoin's price coincided with a broader upswing in the stock market, which was influenced by favorable labor market indicators in the U.S. and pledges from Chinese leaders to enhance economic support through additional stimulus measures. The U.S. Labor Department reported a decline in jobless claims, which fell by 4,000 to a four-month low of 218,000. This positive labor market news contributed to the overall market optimism. In China, the Politburo emphasized the need for effective policy measures to stimulate the economy, which included a significant commitment to fiscal spending and interest rate cuts. Jake Ostrovskis, an OTC trader at Wintermute, highlighted the importance of these developments, noting that the improving liquidity environment is fostering a bullish sentiment in the market. He pointed out that U.S. spot exchange-traded funds (ETFs) have seen their fifth consecutive day of inflows, further supporting Bitcoin's price increase. However, Ostrovskis also warned that the $65,000 level is crucial for Bitcoin's continued upward momentum. If this threshold cannot be maintained, it could lead to downward pressure on prices. He mentioned that the current buildup in open interest might make the market susceptible to sharp corrections. In response to the stimulus measures, Chinese stocks have rallied, with initiatives aimed at lowering borrowing costs and stimulating economic activity. These measures include cutting mortgage interest rates and reducing reserve requirements for banks, which are intended to enhance lending capabilities and boost domestic demand. The People's Bank of China has emphasized that these actions are designed to increase investor confidence. Despite Bitcoin's recent gains, some analysts have noted that it has underperformed compared to U.S. equities and Chinese stocks since the announcement of China's stimulus packages. Aurelie Barthere from Nansen observed that the Chinese measures primarily impact the domestic economy, which may explain the relative underperformance of Bitcoin. Additionally, analysts at Bitfinex expressed concerns about market uncertainty, stating that tail risk assets like Bitcoin are not currently attracting passive flows. They indicated that a reduction in uncertainty is necessary for passive demand to return to Bitcoin. Overall, while Bitcoin's price has seen a significant rally due to positive economic indicators and stimulus measures, there are underlying concerns about its sustainability and the potential for market corrections.

The discussion centers around the evolution of smart contract blockchains over the next decade, reflecting on their origins rooted in cypherpunk values such as censorship resistance, open-source principles, and the aspiration for a democratic internet. However, as these technologies gain traction in the mainstream market, they are increasingly influenced by different priorities, including performance, cost, profitability, and compliance. The author notes that the initial vision for smart contract blockchains is often overshadowed by their commercial applications. For instance, while Bitcoin was conceived as a peer-to-peer electronic cash system, it has transformed into a financial asset, exemplified by products like Bitcoin ETFs. This shift indicates a broader trend where the original ideals of decentralization and permissionlessness are being reinterpreted in light of market demands. As smart contract platforms evolve, many emerging use cases—such as fiat stablecoins and decentralized finance (DeFi)—are not fully aligned with the foundational principles of decentralization. Instead, they leverage the underlying blockchain's capabilities for interoperability and settlement while often sacrificing some degree of decentralization. This raises questions about the future value proposition of major cryptocurrencies, as their roles become more abstracted in various applications. The author expresses concern that early adopters may feel disillusioned by these changes, but suggests that this is not the end of the movement. Rather, it marks a transition into a new phase where commercialization of crypto technologies can lead to broader impact. The commercialization process, while potentially diluting original ideals, can also facilitate the dissemination of innovative ideas to a wider audience. The author emphasizes the importance of adapting to market realities and finding ways to influence the direction of commercialization. For example, compromising on decentralization to achieve scalability can enhance user experience and accessibility, ultimately allowing for a future return to more decentralized models as the technology matures. Drawing parallels with the creative scene in Montréal, the author reflects on how cultural movements often blend with mainstream markets, leading to both commercialization and the dilution of original values. However, some artists manage to navigate this landscape successfully, balancing their roots with broader appeal, which can amplify their impact. In conclusion, while the commercialization of crypto may seem like a departure from its foundational values, it presents an opportunity for significant impact. The author plans to explore specific examples of how this opportunity can manifest in future discussions, suggesting that the journey of crypto is just beginning, despite the challenges posed by mainstream market dynamics.

Jerome Powell, the Chair of the Federal Reserve, recently indicated that there could be two additional interest rate cuts this year, amounting to a total reduction of 50 basis points. This statement has significant implications for the financial markets and economic outlook, as interest rate adjustments are closely monitored by investors and analysts. In the realm of cryptocurrency, Vitalik Buterin, co-founder of Ethereum, made headlines at the Ethereum Singapore 2024 event by emphasizing the importance of solo stakers for the long-term security of the Ethereum network. He argued that individual stakers play a crucial role in maintaining decentralization, which is vital for protecting the network from centralized control and potential 51% attacks. This perspective highlights the ongoing evolution of Ethereum and the critical role that individual participants have in its ecosystem. The legal landscape for cryptocurrencies continues to be shaped by high-profile cases, such as the ongoing lawsuit between the SEC and Ripple. This case centers on whether XRP should be classified as a security or a digital currency, with significant consequences for Ripple and the broader crypto market. The lawsuit has already led to a substantial drop in XRP's value and the delisting of the token from major exchanges, underscoring the regulatory challenges facing the industry. In another notable event, Pavel Durov, the founder of Telegram, was arrested in France amid investigations into alleged violations related to the platform's encrypted messaging services. The arrest is linked to a search warrant issued by French authorities, and the allegations include serious offenses such as fraud and drug trafficking. This incident raises questions about the responsibilities of tech platforms in monitoring and controlling illicit activities. The cryptocurrency market is also facing potential volatility due to the upcoming repayment of 140,000 BTC by Mt. Gox to its creditors. Analysts have expressed concerns that this influx of Bitcoin could lead to a sell-off, impacting prices significantly. The situation is reminiscent of past market reactions to large-scale Bitcoin movements, highlighting the sensitivity of the market to such events. As Bitcoin matures, its volatility has decreased, now falling below that of several major tech stocks. This trend suggests that Bitcoin is evolving into a more stable asset class, which could attract a broader range of investors seeking less risk in their portfolios. Liquid staking has emerged as a solution to the liquidity challenges associated with traditional staking methods. By allowing users to stake their assets while still being able to trade or transfer them, liquid staking enhances accessibility and reduces barriers to entry, making it an attractive option for many crypto investors. Overall, these developments reflect the dynamic nature of the financial and cryptocurrency landscapes, where regulatory actions, technological advancements, and market behaviors continuously shape the environment for investors and participants alike.