Bluechip

Risk Is Back
Hey everyone, and welcome to the Weekly Market .
The market finally got the catalyst it had been waiting for. US payrolls fell 23,000 in July, turning the Fed debate almost overnight and sending risk assets higher. Crypto’s resilience was more interesting than the headline rally. Bitcoin briefly pushed above $65,300 then fall to $63,200 levels currently at $63,500, while Ethereum continued to outperform, BTC still lagged equities despite the sharp shift in rate expectations.
At the same time, the market absorbed a string of uncomfortable headlines, from the Coldcard exploit and renewed bond-market pressure to uncertainty around US crypto legislation, without a meaningful deterioration in risk appetite. The move was broad: gold gained 7.25%, the Nasdaq rose 5.09%, the S&P 500 added 3.51%.
That leaves the market in an unusually delicate spot. The Fed suddenly looks less likely to tighten, institutional flows have returned, and risk appetite is improving, but the rally is still waiting for confirmation. Wednesday’s CPI is the first real test, while oil, long-end yields and the next round of ETF flows will determine whether last week’s move was the beginning of a broader rotation or simply another dip that got bought.
In this issue, I’ll break down what actually drove the movement, how macro catalysts are compressing into a high-impact window, what on-chain flows are revealing about holder behaviour, and where structural momentum may emerge next.
Let’s get into it.
1. Sector Performance & Key Developments
Polymarket is reportedly in talks to raise $1 billion at a $20 billion valuation.Coldcard hack losses have surpassed $100 million.MSCI has proposed removing Strategy and Metaplanet from its global indexes.Mastercard completed its acquisition of BVNK, expanding its stablecoin capabilities.Wells Fargo plans to launch tokenized deposits for corporate clients on its proprietary blockchain.Polymarket became an official ATP partner, combining tennis livestreaming with in-app trading.A power struggle has emerged at Ondo Finance following the death of its founder.OpenAI has slowed development of its Astra model over cybersecurity concerns.Major hedge funds including Citadel and Point72 were targeted in a wave of cyberattacks.Demis Hassabis is set to step down as CEO of Google DeepMind.The DOJ charged an NFT marketplace founder with misappropriating investor funds.Trump Media has unwound several cryptocurrency-related deals.Strategy reduced its Bitcoin holdings by 1,637 BTC, worth roughly $102.4 million.Hyperliquid upgraded TWAP orders and launched HIP-4 permissionless deployments on testnet.EIP-8361 was proposed to reduce Ethereum inflation by cutting staking yields.Maple adopted Ethena’s USDTB stablecoin as a $400 million liquidity buffer.TradeXYZ launched a $HYPE buyback using 12% of collected revenue.Dinari partnered with Circle to offer tokenized stocks to US investors.Anthropic is exploring a $36 billion debt package to finance its use of Google’s chips.
2. Bitcoin Fights Back as Crypto Regulation Stalls
The Coldcard hack has grown into something much bigger than a hardware wallet failure. Researchers now estimate that roughly 1,800 BTC, worth more than $116 million, has been drained across multibple waves of attacks. The important warning is that updating the firmware is not enough for users who generated a seed on affected firmware. Those wallets need to be moved to a completely new seed.
The more interesting story, however, is what happened next.
A volunteer group calling itself Bitcoin’s Red Team, led by developers including Calle and Rob Hamilton of AnchorWatch, launched a rapid security audit of the wider Bitcoin ecosystem. In just 27 hours, 16 researchers used AI models to examine more than 390 open source Bitcoin projects, uncovering nearly 5,000 security issues, including 85 critical vulnerabilities. The findings were reported privately to developers so they could be fixed before they became targets. OpenSats covered the computing costs.
There was no company behind the effort and no government program funding it. The Bitcoin community essentially saw a major security failure and organized its own response.
That is probably the most important takeaway from the Coldcard incident. The hack exposed a weakness, but it also showed how quickly the broader ecosystem can mobilize to find the next one before an attacker does.
There is still a strange obstacle in that effort. Rob Hamilton said OpenAI’s safety systems eventually blocked his security research despite his previous vetting as a researcher, forcing him to turn to Chinese open source AI models for continued analysis.
The irony is hard to miss: defenders are increasingly using AI to identify vulnerabilities, while the same tools can become difficult to access when the work looks too much like offensive security research.
BIP-110 Runs Into a Wall
The other major Bitcoin debate this week was BIP-110, whose mandatory signaling period began over the weekend
Nodes enforcing the proposal rejected non-signaling blocks and briefly created an alternative chain. It produced just two blocks before stalling, while the main Bitcoin network continued operating normally and quickly moved far ahead. Major exchanges did not recognize the alternative chain.
For now, Bitcoin’s consensus rules remain unchanged.
Regardless of where you stand on BIP-110, the episode is another reminder of how difficult it is to change Bitcoin’s rules. Miner support alone is not enough. Any meaningful change ultimately needs broad acceptance across miners, node operators, developers and the economic users of the network.
BIP-110 supporters argue that the fight is not over and that node enforcement is more important than miner signaling. Some have even prepared contingency code involving a change to Bitcoin’s mining algorithm. Whether that develops into anything meaningful remains unclear, but the debate is far from settled.
Washington Stalls While Moscow Moves
The regulatory picture is moving in opposite directions across the world’s two major powers.
The CLARITY Act, which would establish a broader federal framework for digital assets in the US, failed to receive a Senate vote before the August recess. The Senate returns on September 14, but the political window is getting tighter. A key unresolved issue is the bill’s ethics provision, particularly restrictions around senior government officials and their families profiting from digital assets.
Prediction markets now put the probability of the bill becoming law this year at roughly 22%, down sharply from more than 75% in May.
After years of regulation through enforcement, the US still cannot agree on a lasting framework.
Russia, meanwhile, has already moved ahead with its own framework. Putin signed Russia’s first comprehensive crypto law on August 4, legalizing crypto trading through licensed exchanges under the central bank while maintaining a ban on using crypto for domestic payments.
The restrictions on ordinary Russians are significant. Retail investors face an annual purchase limit of roughly $3,750, meaning it would take around 17 years to accumulate one Bitcoin at current prices. Cross-border crypto settlements, however, are not subject to the same cap.
That tells us a lot about Moscow’s objective. Russia appears comfortable using crypto as a tool for international capital movement while keeping domestic adoption tightly controlled.
The contrast with the US is striking. Russia is moving quickly to regulate crypto on its own terms, while Washington is still debating the rules.
3. Macro Backdrop
1. The Jobs Market Finally Breaks the Fed's Hawkish Case
The July jobs report changed the rates story in one print. US payrolls fell 23,000, versus expectations for roughly an 80,000 gain, sending September hike odds from 55% to 40% and pushing the 10-year Treasury yield toward 4.6% as risk assets rallied into the weekend.
The report was weak across the board: 264,000 people left the labor force, unemployment slipped to 4.1% largely because of that decline, and participation fell to its lowest level outside the Covid period since 1976. Wage growth also slowed to 3.2%, a five-year low, while previous months were revised down by a combined 103,000 jobs.
The details make the headline slightly less dramatic, but not enough to rescue the hawkish case.
Private payrolls actually increased by 30,000, while the government component fell by 53,000, a figure that could still be revised.
Still, for the rates market, weak labor data is weak labor data. The argument that the Fed needs to stay restrictive because the labor market remains too strong has taken a serious hit. Now Wednesday’s CPI becomes the next test. A soft inflation print would reinforce the rate-cut repricing, while a hot number could quickly put yields and the dollar back under pressure.
2. Hormuz Relief
Oil markets also caught a major de-escalation signal, with Brent falling 6.85% as Iran and Oman moved closer to a framework for navigation through the Strait of Hormuz. But the market may be getting ahead of itself.
Tehran says an agreement alone would not reopen the waterway and is demanding US concessions, including compensation, before normal transit resumes. Iran also struck another vessel in the strait even as negotiations continued.Actual traffic remains far below normal. Fewer than 30 ships crossed the strait during the entire week, compared with the much higher volumes seen before the conflict. That makes the oil move a bet on diplomacy rather than a reflection of a fully restored supply route.
For markets, that distinction matters. Lower crude prices could help keep Wednesday’s CPI softer, giving the Fed more room to ease. But the relief can disappear just as quickly if negotiations break down or another incident hits the waterway.
3. Bonds Are Hearing Two Different Stories
Treasury yields fell after the weak payrolls report, but the move has partly reversed. The 10-year yield is at 4.69%, up as crude prices moved higher, but still around 6bp lower on the week
The 30-year yield is closed to 5.25e%, the level reached last Friday that marked its highest point since 2007. That spike followed what markets saw as a hawkish hold at the July FOMC meetingThe bigger problem is still at the long end. Investors continue to demand a high term premium while the Fed has stepped away from forward guidance and remains divided. Three Fed officials dissented in favour of a hike in July, and several have continued to argue for tighter policy since then.One weak jobs report is enough to strengthen the view that the hiking cycle is over, but it is not enough to convince the bond market that the Fed has regained policy credibility. That is why the 30-year yield remains well above its level at the start of the quarter, even after Friday’s rally.The setup for Wednesday’s CPI is therefore unusually clean: the labour market is arguing for an end to tightening, while higher energy prices threaten to push inflation back up. CPI will determine which signal the front end of the Treasury curve chooses to believe.Jackson Hole, August 27–29, is the next major opportunity for the Fed to clarify its thinking before the September 15–16 FOMC meeting.
4. The Yen Intervention Is Already Fading
Japan’s attempt to strengthen the yen is also losing momentum. Just one week after coordinated US-Japan intervention pushed the currency to around 155 per dollar, the yen has weakened back toward 158.50, giving up nearly half of those gains.
It is another reminder that intervention can buy time, but it cannot permanently change the underlying forces driving a currency. The next question is whether Japan’s Ministry of Finance steps back in again or allows the yen to continue drifting weaker. For global markets, that matters because another intervention could quickly tighten liquidity and create volatility across rates, FX and risk assets.
4. ETF Insights
Spot Bitcoin and Ether ETFs pulled in a combined $1.1 billion this week, their strongest inflow week since April, despite relatively muted market volumes. That combination points more toward a deliberate allocation from larger investors than a broad retail chase.The Coldcard hack may be creating an unexpected ETF tailwind. Bloomberg’s Eric Balchunas noted that several Bitcoin ETFs have recorded daily inflows since the exploit. If the pattern continues, it could mark a new institutional dynamic: a self-custody security incident may be pushing some holders toward regulated Bitcoin investment products rather than holding coins directly.Last week’s $61.5 million of outflows now look less like an institutional exit. The figure included a $265 million redemption on July 31, but the subsequent recovery in ETF flows and the broader rebound in semiconductors suggest those outflows were more likely part of the AI-led deleveraging episode than the start of a structural rotation away from crypto. It is still too early to say that the rotation has fully run its course.
5. The Week Ahead
The main event is Wednesday's CPI. After payrolls shifted the Fed debate, inflation now determines whether that repricing sticks.
6. Conclusion
Market sentiment remains fragile, with the Crypto Fear & Greed Index at 25, oscillating between Fear and Extreme Fear over the past few weeks.
Crypto had a stronger week as $1.1B flowed into BTC and ETH ETFs, with weaker US payrolls easing expectations for further Fed tightening. The focus now shifts to Wednesday's CPI and the fragile Hormuz situation, which will determine whether the recent macro repricing holds.