Spotlight

The digital asset market recently saw a week of consolidation and major legislative progress in the U.S., despite Bitcoin dipping below $116,000. This BTC drop was influenced by large wallet movements and caution ahead of the Federal Reserve meeting and an upcoming crypto policy report. While Bitcoin pulled back from its over $123,000 peak, Ethereum (ETH) impressively surged above $3,600, driven by record ETF inflows, highlighting strong institutional interest in utility-focused digital assets. The broader altcoin market also stabilized after an initial dip.

The landmark stablecoin GENIUS ACT legislation marked the first federal law specifically for digital assets, providing crucial clarity and a positive signal for the industry. The House also advanced the CLARITY Act (for asset classification) and the Anti-CBDC Surveillance State Act (prohibiting a Fed CBDC without Congressional approval). These legislative strides, coupled with anticipated details from the White House's 180-day crypto policy report on July 30th (expected to cover government-held Bitcoin management), signal a significant shift toward a more structured and regulated digital asset market, with potential impacts to be observed in the next few weeks.

Bitcoin

Bitcoin experienced a corrective week, moving slightly downward after recently touching new all-time highs. Following consolidation around the $119,000-$120,000 mark at the start of the week (July 21st), it dipped to the $118,000 range by July 24th, with some reports noting a 1.2% fall on July 25th. This downtrend was primarily driven by internal market dynamics, including profit-taking from larger holders and negative futures net open interest, which led to liquidations of leveraged long positions.

In contrast, traditional finance (TradFi) indices, specifically the S&P 500 and Nasdaq, showed resilience, continuing their upward trajectory and hitting new all-time highs throughout the week (July 21-25). For instance, the S&P 500 climbed from around $6305.6 on July 21st to $6363.3 by July 24th, while the Nasdaq also saw gains, reaching new record levels. This divergence suggests Bitcoin's movements this week were more influenced by crypto-specific factors than by the prevailing positive sentiment in broader equity markets. However, the upcoming Federal Reserve's interest rate decision remains a significant TradFi event that is expected to heavily impact risk assets, including digital currencies, as the market anticipates potential interest rate cuts later in the year.

Looking ahead

The next few weeks in digital assets will be shaped by a confluence of significant events. The July 30th release of President Trump's crypto task force's 180-day report is poised to redefine the regulatory framework for digital assets, offering key recommendations on stablecoin oversight, token classification, and enforcement reforms. This report, building on the GENIUS and CLARITY Acts, aims to solidify the US as a global leader in digital finance. Notably, it may propose a federal Bitcoin reserve using seized assets, suggesting a structured, sovereign approach to crypto exposure while ruling out a retail CBDC in favor of clear regulations for USD-pegged stablecoins.

Adding to this, the Federal Reserve's interest rate decision on July 29-30, 2025, carries significant weight and could cause volatility in digital asset markets as early as next week. While a rate cut is possible, the Fed's stance will depend heavily on upcoming inflation and labor market data. Any hawkish or dovish signals from the Fed, whether before or during the announcement, will directly impact global risk appetite and, consequently, the performance of digital assets.

Teroxx Decoded

The "average block size" refers to the average amount of data (in megabytes) contained within each block of the Bitcoin blockchain, reflecting the number and volume of transactions being processed. A positive correlation is often observed: when there's higher demand for Bitcoin transactions, the average block size tends to increase, indicating greater network activity. This surge in activity and adoption can, in turn, drive demand for Bitcoin itself, placing upward pressure on its price.

The attached graph illustrates this relationship from July 2024 to July 2025. Periods of Bitcoin price growth, such as that seen between late 2024 and early 2025, which saw the price climb from approximately $60,000 to $120,000, were generally accompanied by an increase in average block size, indicating higher network congestion and usage. Conversely, when Bitcoin's price declined or stabilized towards the end of the period, the average block size also showed a downward trend or increased variability, suggesting a decrease in overall network activity.