Market update | July 31st, 2026

Crypto held up in a week of selling elsewhere

The global macro backdrop deteriorated sharply this week with a record leverage unwind in Asia, a contested decision at the FOMC, and the continuation of the AI selloff. Yet, crypto's response was relatively muted, with Bitcoin giving up around 3% over the week and staying within the US$63,300-US$65,500 range. Even the Senate shelving the Clarity Act ahead of the summer recess, with its path through the remainder of this Congress now uncertain, failed to make a dent in the range.¹ Despite outflows of US$426M, Bitcoin's relative stability provided some relief against a rather volatile equity market.

The Fed held, but the bond market wasn't convinced

At Wednesday's FOMC meeting, the Fed held rates at 3.50-3.75% for a fifth consecutive meeting, on a contested 9-3 vote with three dissents in favour of a quarter-point hike.² The sharper signal came from the press conference. Asked about inflation still running above target, Warsh was categorical: "There is no soft inflation target. There's only a target, and it's 2%."³ The bond market was not convinced, with yields rising materially across the curve and the 30-year reaching its highest level since 2007. Markets still price a September hike at around 57%, down from close to 70% earlier in the afternoon, leaving it the base case rather than a tail risk.⁴ If the summer heat extends to the inflation data, that pricing will only firm up. A Fed that struggles to convince markets of its inflation resolve, alongside rising long-end yields, is precisely the environment in which Bitcoin's fixed-supply argument pays its way.

AI capex is being punished, but demand is not slowing

As we enter the Q2 earnings season, a consistent pattern has emerged from big tech. Alphabet, Tesla, Meta and Microsoft have already published results, with revenues holding up, margins compressing at Meta and Tesla, and AI capex still climbing: Alphabet raised its full-year guidance to US$195-205B and Meta lifted the floor of its range to US$135B.⁵ The market's response has been equally consistent, with a heavy focus on free cash flow, rewarding companies whose spending is backed by visible, monetisable demand and punishing those whose capex guidance keeps ratcheting higher. For an asset with no capex line and a supply schedule that cannot be revised upwards, that scrutiny makes for a useful contrast.

Sources

1. CoinDesk, 23 July 2026

2. Federal Reserve, FOMC statement, 29 July 2026

3. Federal Reserve, Chair Warsh press conference, 29 July 2026

4. CME FedWatch, 29 July 2026

5. Company Q2 2026 results: Alphabet and Tesla (22 July), Meta and Microsoft (29 July)