Macro liquidity improvement, crypto market differentiation, stablecoin regulation acceleration.

A. Market View

1. Macroeconomic Liquidity

Currency liquidity is improving. The Federal Reserve kept interest rates unchanged, maintaining the federal funds rate target range at 4.25% to 4.50%. Powell did not provide clear guidance on a rate cut in September, emphasizing inflation risks and stating that employment is stable, dampening expectations for rate cuts this year. The dollar index hit a two-month high, and U.S. stocks continued to rise to historical highs. The cryptocurrency market performed worse than U.S. stocks.

2. Market Overview

This week, Bitcoin has been fluctuating at a high level, while altcoins have shown overall weak performance, with most coins and stocks declining. The market is primarily focused on the Ethereum ecosystem.

Among the top 300 cryptocurrencies by market capitalization:

Top 5 Gains: LOKA (300%), ZORA (60%), ZBCN (50%), KTA (40%), REKT (40%) Top 5 Declines: TKX (60%), FARTCOIN (30%), M (30%), VIRTUAL (20%), GRASS (20%)

ZORA is a socialfi project that collaborates with applications on the Base chain. It surged 10 times at the bottom.

ENA: The stablecoins USDE and USDTB under it continue to be profitable, and a US stock version of the investment company has been established for continuous buying. ENA has partnered with a lending platform to release the stablecoin USDE for circulating loans.

CFX: As a domestically compliant public chain, it benefits from the news that Hong Kong plans to issue stablecoin licenses in September.

3. On-chain Data

Bitcoin's liquidity is facing a severe test. An early large holder sold over 80,000 bitcoins in an over-the-counter transaction, with a trading volume approaching $10 billion. However, the market effectively absorbed this selling pressure, and 97% of the circulating supply remains in a profitable state.

The supply of stablecoins continues to grow by 1%.

Institutional funds continue to see a net inflow. Ethereum has driven a surge in inflows, with the amount this year exceeding the total for last year.

The long-term trend indicator MVRV-Z Score is based on the total market cost and reflects the overall profitability. When this indicator is greater than 6, it is in the top range; when it is less than 2, it is in the bottom range. Currently, the indicator is at 2.6, close to the middle region.

4. Futures Market

Futures funding rate: This week's rate is 0.01%, which is at a normal level. When the rate is between 0.05% and 0.1%, it indicates that there is a lot of long leverage, which may suggest a short-term market top; when the rate is between -0.1% and 0%, it indicates that there is a lot of short leverage, which may suggest a short-term market bottom.

Futures open interest: This week, the open interest for Bitcoin has started to decline.

Futures long-short ratio: 1.1, market sentiment neutral. This indicator is usually used as a contrarian indicator, with below 0.7 indicating fear and above 2.0 indicating greed. However, the long-short ratio data is quite volatile, and its reference significance is limited.

5. Spot Market

Bitcoin fell this week, while the ETH/BTC exchange rate remained strong, with a few small-cap coins related to the stablecoin concept leading the way. The market rotation is gradually shifting from Bitcoin to Ethereum and altcoins, and it is expected that risks will gradually accumulate in the later stages.

B. Stablecoins and RWA

1. Stablecoin Sector

A financial regulatory agency stated that the first batch of stablecoin issuance licenses is expected to be issued early next year, and initial compliant stablecoin holders will need to undergo real-name authentication.

The vice president of the regulatory agency stated at the technical briefing on the regulation system for stablecoin issuers that the number of licenses to be issued in the first batch has not yet been determined and will depend on the quality of materials submitted by the applying institutions. The first license is expected to be issued early next year. He emphasized that the threshold for obtaining a license is high, and entering the "sandbox testing" does not necessarily mean approval will be granted. The regulatory agency has an open attitude towards stablecoins pegged to fiat currencies, and applicants can choose either a single currency or a basket of currencies, but they must specify this clearly at the time of application.

The agency will open the first batch of license applications from August 1 to September 30, marking the official implementation of stablecoin regulation. The identity of all compliant stablecoin holders must be verified, equivalent to a real-name system, to strengthen anti-money laundering controls. This arrangement is stricter than the "whitelist" system mentioned in the previous consultation document and may be appropriately relaxed in the future based on technological developments.

A blockchain company under a certain e-commerce giant has registered the names "JCOIN" and "JOYCOIN", which may serve as its stablecoin brand. Registration details indicate that the related services include electronic fund transfers and cryptocurrency financial transactions facilitated by blockchain technology. The company is one of the participants in a stablecoin sandbox program by a certain financial regulatory authority and has previously collaborated with a certain bank to test a stablecoin-based cross-border payment solution.

Analysis suggests that the company’s issuance of stablecoins is expected to significantly reduce cross-border payment costs, enhance settlement efficiency, and help it gain an advantage in the international supply chain and retail payment sectors. This move highlights the determination of traditional e-commerce to transition into the Web3 space and underscores Hong Kong's appeal as a digital asset financial center.

A certain payment giant announced the launch of a new feature in the US market that allows small merchants to accept payments in over 100 different cryptocurrencies, including mainstream coins like Bitcoin and Ethereum. This move significantly expands the company's service offerings in the crypto payment space and is expected to encourage more merchants to engage in digital currency transactions.

The program is primarily aimed at small and medium-sized merchants, with the goal of lowering the barriers to using crypto assets and enhancing operational flexibility. As more and more merchants start offering crypto payment services, it is expected to promote the adoption of crypto assets in everyday business scenarios. This open payment network is expected to become a bridge connecting traditional finance and the crypto ecosystem, providing merchants with new revenue channels and offering practical support for the usability of cryptocurrencies.

WLFI will strategically invest 10 million USD in a synthetic dollar stablecoin project. Users can use stablecoins, mainstream cryptocurrencies, or tokenized government bonds as collateral to mint USDf, which currently has a circulation of over 1 billion USD. The rapid growth of this project is attributed to factors such as: support for multiple asset collaterals, provision of staking yield mechanisms, and the existence of points and airdrop expectations.

2. RWA Section

The U.S. government working group released a cryptocurrency policy report, proposing several recommendations: requiring regulatory agencies to clarify the regulations for crypto assets; urging Congress to pass relevant legislation; supporting tokenization of securities on the blockchain, opposing the issuance of central bank digital currencies; and promoting the integration of crypto technology into traditional financial infrastructure.

The local government has confirmed that it will create a global digital asset innovation center. The region has launched a licensing system for virtual asset trading platforms and will implement regulations for stablecoins. The government is advancing the relevant licensing draft and establishing a regulatory sandbox mechanism. Authorities are strengthening cooperation with international organizations and other regions to promote the establishment of regulatory standards for digital assets. At the same time, they are exploring the application of traditional asset tokenization and promoting the landing of related products.

A major Japanese bank has acquired a high-rise office building for approximately $680 million, planning to tokenize it using blockchain technology and issue digital securities. Institutional investors can participate through private placement REITs, while retail investors can purchase tokenized shares on specific platforms. This initiative lowers the barrier for retail investors to participate in high-quality commercial real estate investment, merging traditional REITs with new digital securities, and is expected to enhance asset liquidity and market transparency.