Bitcoin had its best week since March, rising nearly 7% through July 5 as the soft NFP print validated the Warsh pivot and the dollar softened. The macro underpinning is firming: the U.S. two-year inflation breakeven has dropped below 2% — the Fed’s own target — for the first time since 2024. That’s the bond market saying inflation is expected to fall below the threshold that justifies rate hikes. The next confirm-or-deny moment is July 14 CPI. Overnight, BTC touched $63,900 then pulled back to around $62,900 as capital rotated back into memory and semiconductor stocks in premarket. And SpaceX joins the Nasdaq 100 tomorrow — a milestone the history books say to treat carefully.
CoinDesk Disclosure: The information contained in this newsletter, and any information linked through the items contained herein, is not intended to provide sufficient information to form the basis for an investment decision. You should seek additional information regarding the merits and risks of investing in any cryptocurrency or digital assets.
L1.co Disclosure: This material is for informational purposes only, and the content contained herein should not be considered investment advice or a solicitation, offer, or recommendation to sell or buy any asset, strategy, or product. Investing in digital assets involves a high degree of risk, including the loss of principal.
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The U.S. inflation outlook underpins bitcoin bulls after their best week since March.
Bitcoin rose nearly 7% in the week ended July 5 — its best weekly performance since March — and the macro picture heading into Q3 is giving bulls something to work with. The key signal: the U.S. two-year inflation breakeven, which measures the bond market’s expectation of future price increases by comparing regular Treasuries to inflation-protected ones, has dropped below 2% for the first time since 2024. That’s the Fed’s own inflation target — meaning the market is now pricing in inflation falling below the threshold that would justify rate hikes. Notably, both the two-year breakeven and WTI crude oil prices have slipped to levels last seen before the onset of the Iran war in late February. Brookings Institution’s Robin Brooks puts it directly: July 14 CPI, when the deflationary impulse from falling oil prices shows up in the data, should remind markets that the Fed isn’t going to hike — and that the next move, if anything, will be a cut. Bullish dollar positioning is already lopsided and vulnerable to sudden unwinding, which would put the DXY under pressure and give bitcoin a further tailwind. A dissenting camp cautions that sticky service-sector inflation means the Fed will keep rates higher for longer even if headline CPI moderates. The next data catalyst is July 14. FOMC minutes land later this week. This week also marks nine months since bitcoin’s all-time high of $126,000 — the stock now trading near $62,500, roughly a 50% correction, with four-year cycle models pointing to a potential bottom around October.
Bitcoin pops to $63,900, then reverses, as the week begins.
Bitcoin touched $63,882 overnight — its highest print since before the June bear run — before retreating to around $62,900 as Monday’s U.S. market session opened. The reversal came as premarket trading showed a strong bid for memory and semiconductor stocks: SanDisk and Micron were each up around 3%, and neo-cloud names including IREN and Cipher Digital added roughly 4%, suggesting capital rotation between the AI trade and crypto-related assets. As money flowed back into tech, BTC slipped more than 1% below $63,000. Thursday’s soft jobs report — which came in below expectations — had given BTC the lift heading into the weekend, raising hopes that a weakening labor market makes a Fed hike less likely and gradually shifts the backdrop that drove ETF outflows through June. That process takes time, and one data print does not flip the setup. July 14 CPI is the next significant catalyst. XRP rose 3% as the $1.14 breakout level transitions to support, and ether held above key technical levels, with ETH leading the broader crypto market’s hold Monday morning. LIT, the Lighter exchange token, surged 13% on a bullish tokenomics update featuring permanent token burns and staking rewards drawn from the ecosystem allocation.
SpaceX’s Nasdaq 100 inclusion comes with a historical warning.
SpaceX (SPCX) joins the Nasdaq 100 tomorrow, July 7, following a blockbuster $75 billion IPO — the largest in history — in mid-June. The stock surged to $225 in the days after its June 12 debut before deflating to $162 last week, already down 28% from its all-time high. The question for markets is what happens next — and history offers a cautionary answer. Index inclusion, widely viewed as a positive milestone that forces passive fund buying, has not reliably been a bullish catalyst for the stocks that receive it. Palantir joined the Nasdaq 100 on Dec. 23, 2024, and peaked around that time before declining roughly 25% in the weeks that followed. Strategy entered the same index on the same date, but its cycle high had already been set a month earlier near $543 in November, when bitcoin was trading around $100,000. MSTR now trades near $100 — an 80% correction from its peak. The pattern is straightforward: investor optimism is often already elevated by the time inclusion arrives, passive fund buying has largely been anticipated and priced in, and the news itself becomes a sell-the-event catalyst. SpaceX’s IPO came at the peak of the AI infrastructure frenzy, when semiconductor and memory stocks were surging on demand for AI compute and high-bandwidth memory. With the stock already retracing sharply from its highs, history suggests the Nasdaq 100 badge may offer less of a floor than many assume.
CoinDesk Disclosure: The information contained in this newsletter, and any information linked through the items contained herein, is not intended to provide sufficient information to form the basis for an investment decision. You should seek additional information regarding the merits and risks of investing in any cryptocurrency or digital assets.
L1.co Disclosure: This material is for informational purposes only, and the content contained herein should not be considered investment advice or a solicitation, offer, or recommendation to sell or buy any asset, strategy, or product. Investing in digital assets involves a high degree of risk, including the loss of principal.
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