Matrixport Market Observation: Market Capital Rotation BTC High Consolidation, Can ETH and Altcoin Sector Continue?

Last week (July 15 - July 21), BTC consolidated while ETH led the rally, and SOL broke through the $200 mark, attracting more buying interest. After setting an all-time high of $123,218, BTC entered a consolidation phase. This week, the price fluctuated widely between $116,000 and $119,000, with a maximum weekly volatility of 4.54%, currently stabilizing around $117,700.

Driven by positive factors such as the passage of the GENIUS Act and the slowing inflation, funds shifted from BTC to mainstream altcoins. With ETH's strong rise, mainstream altcoins like SOL, XRP, and DOGE also surged. ETH peaked at $3,860, with a weekly increase of 31.63%, currently correcting to around $3,650 (Binance spot, July 22, 16:10).

In U.S. stock markets last week, the three major indices had mixed performances. As of the market close on July 21, the Dow slightly declined, while the S&P 500 and Nasdaq experienced slight gains. This week, earnings reports from several tech giants are set to become a market focus.

Market Interpretation

Altcoins lead the rise, crypto market cap surpasses $4 trillion

Last week, the cryptocurrency market rebounded strongly, with a total market cap surpassing $4 trillion for the second time in history. BTC performed modestly, while ETH rose 31.63% weekly, SOL increased by 26.74%, XRP by 28.34%, and DOGE by 52.58%, with mainstream altcoins rallying. ETH spot ETF inflows reached $2.2 billion in a week, significantly increasing sector activity. Positive policies, institutional support, and liquidity release collectively drove the market, with a notable recovery in risk appetite. Caution is needed for high-level corrections in the short term, but mid-term structural opportunities are expected to persist.

CPI and PPI data stable, U.S. stocks rise, BTC corrects from highs

On July 15, the U.S. announced a 6-month CPI year-on-year rate of 2.7%, in line with expectations, and a core CPI year-on-year rate of 2.9%, below the expected 3.0%. The CPI rebounded from the lows, primarily due to rising oil prices and tariffs. The second wave of moderate inflation has emerged, but its extent is limited, and has yet to prompt the Federal Reserve to adopt a hawkish stance, leading to a muted market reaction. On July 16, the PPI year-on-year rate was 2.3%, below expectations and previous values, indicating a slowdown in U.S. economic growth. Following the data release, U.S. stocks continued to rise, the dollar index rebounded, and gold slightly declined, with FedWatch showing a slightly higher than 50% chance of a rate cut in September.

Since July 11, the Trump administration raised Canadian tariffs to 35% and issued tariff notices of up to 20-50% to 23 countries, including the EU and Mexico, to take effect on August 1. The rising policy risks have intensified market concerns about fiscal and inflation issues. After continuously setting new highs, BTC experienced a short-term correction of 1.53% due to cooling rate cut expectations and a strengthening dollar, leading to a cautious risk appetite in the market, which requires attention to macro data and policy trends in the following period.

Trump signs the GENIUS Act, three key bills enacted

On July 17, the U.S. House of Representatives passed three key crypto bills, the GENIUS Act, CLARITY Act, and Anti-CBDC Act, in a one-time session, marking a new chapter in U.S. crypto regulation and innovation. The next day, President Trump officially signed the GENIUS Act, establishing a federal regulatory framework for the issuance and trading of stablecoins, officially bringing stablecoins into a compliant era, and becoming the second core crypto use case after BTC.

The policy benefits quickly transmitted to the market. ETH surged over 20% in a week due to this momentum, igniting the altcoin market. BTC consolidated at high levels this week, and although there was some profit-taking in the short term, ongoing institutional purchases and Spot ETF inflows provide solid support for the bull market.

Market Highlights

U.S. pensions continue to increase allocation to BTC-related stocks, accelerating the cryptoization of retirement markets

Last week, one of the largest public pension funds in the U.S.—the Ohio Public Employees Retirement System (PERS)—significantly increased its holdings in MicroStrategy (now Strategy) stock in the second quarter, showing that mainstream U.S. pensions are gradually incorporating BTC-related assets into their long-term allocation strategies.

Meanwhile, the Trump administration is promoting an executive order to allow American household retirement accounts like 401(k) to allocate cryptocurrency, gold, and private equity, involving a market size of up to $9 trillion. If the reform is implemented, it will greatly expand the allocation space for BTC and related stocks within the U.S. pension system.

JPMorgan and Citigroup accelerate stablecoin strategies, traditional banks promoting mainstream crypto payment integration

During the U.S. Congress's "crypto week," executives from JPMorgan and Citigroup expressed that they are actively preparing to launch their own stablecoin projects. JPMorgan's CEO confirmed the deepening layout of "JPMorgan Deposit Coin" and other crypto payment services. On the same day, Citigroup's CEO revealed that the company is studying "Citi Stablecoin." According to the Wall Street Journal, JPMorgan, Bank of America, Citigroup, and Wells Fargo had a joint issuance plan as early as May this year. Currently, the total market cap of global stablecoins has reached $258 billion, with an annual growth rate of up to 58%.

SharpLink holds over 270,000 ETH, becoming the largest publicly listed ETH holder globally

After previously purchasing 10,000 ETH from the ETH Foundation, SharpLink continued to significantly increase its holdings, raising its total to 270,000 ETH on July 14, surpassing the ETH Foundation for the first time and becoming the largest publicly traded company holding ETH globally. SharpLink's aggressive positioning reflects institutional recognition of ETH as a strategic reserve asset and boosts market confidence in the long-term value of the ETH ecosystem.

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