Crypto Market July Report: The Tariff War Enters a Desensitization Period, and Three Major Dynamics Emerge in the Post-Tariff Era

July marked a pivotal turning point for global markets. Trump, in a rare move, pressured the Federal Reserve to cut interest rates to ease government debt pressure. However, Powell, upholding independence, held rates steady. Market expectations for a September rate cut fell from 60% to 47%. Meanwhile, the tariff war entered its "post-era." While the battle hasn't completely concluded, market reaction has subsided. In this post-tariff era, interest rate cuts, AI, and the institutionalization of crypto assets are the three main themes.

The current U.S. economy is like an acrobat standing on a balance beam: on one side is the "soft brick" of consumer confidence. Although the consumer confidence index in July climbed slightly to 97.2, an increase from 95.2 in June, it was indeed lower than market expectations, reflecting the overall caution of consumers, especially the weak confidence in the job market. On the other side, it is under inflationary pressure. The CPI in June rose by 2.7% year-on-year and 0.3% month-on-month. Consumers' concerns that tariff policies may push up prices are growing, adding a high degree of uncertainty to future inflation trends.

Faced with a complex economic landscape, the Federal Reserve is naturally under increasing pressure. However, at its most recent meeting on July 31st, the Fed remained on hold, keeping interest rates unchanged. This marked the fifth consecutive time this year that the benchmark rate has been kept in the 4.25%-4.5% range. This decision sparked strong dissatisfaction from President Trump, who made a rare personal visit to the Fed headquarters to press for a sharp rate cut to 1%, attempting to use issues such as the overrun on the Federal Reserve building renovation as political leverage. At this meeting, for the first time since 1993, two Trump-appointed governors—Vice Chairman for Supervision Michelle Bowman and Governor Christopher Waller—voted against the immediate 25 basis point rate cut, signaling the public dissension within the Fed's internal decision-making process.

Faced with pressure, Federal Reserve Chairman Powell refused to give in, insisting that monetary policy only recognizes data and not "words." He said that the current inflation level is still higher than the Fed's target value, and it is necessary to maintain a moderately restrictive policy stance.

This tough attitude directly affected market expectations.

The market is currently focused on the September interest rate meeting, with the probability of a 25 basis point rate cut rising to between 65% and 90%. Some institutions (such as Goldman Sachs and Citigroup) predict that the Federal Reserve will cut interest rates in September, October, and December, totaling two to three cuts.

However, Fed Chairman Powell and most officials remain cautious about a September rate cut, emphasizing the need to observe more economic data, especially employment and inflation trends, and have yet to make a clear decision on a rate cut. Powell's remarks once lowered expectations for a September rate cut to around 40%.

In reality, the Federal Reserve has been striving to maintain policy independence amidst this dilemma, but the shadow of political interference lingers. Recently, Trump, dissatisfied with the latest employment data released by the U.S. Department of Labor, ordered the dismissal of McCarty McInturff, director of the Bureau of Labor Statistics. This series of actions has exacerbated market concerns about the uncertainty of U.S. economic policy.

The US-led tariff policy, once a market trigger, is now taking a back seat. In July, the US, along with major economies like China, Europe, and Japan, all signaled a easing of tariffs. In particular, at the end of the month, the US and Europe announced a new trade agreement. While the US still imposes a 15% tariff on most EU goods, it is lower than the originally threatened rate, reducing short-term uncertainty and pushing the S&P 500 and Nasdaq to record highs. Looking ahead, while localized tariff frictions may occasionally escalate, the market generally believes that overall tariff levels will be kept within a safe zone that avoids pushing the economy into recession, like a roller coaster with guardrails.

This trend of "easing worst-case expectations" has become an important psychological basis for US stocks and cryptocurrencies to hit new highs, and it also means that global capital will conduct a new round of assessments of risks and opportunities.

Amidst new opportunities, breakthroughs in AI commercialization are embracing a new market narrative. In the latest earnings season, tech giants generally exceeded expectations, with Meta (Nasdaq: META) and Microsoft (Nasdaq: MSFT) performing particularly well. Meta, fueled by the deep empowerment of its advertising business through AI technology, saw its stock price surge following the release of its earnings report, bringing its market capitalization close to $2 trillion, putting it on the verge of joining the "$2 trillion club" alongside Google (Nasdaq: GOOGL) and Amazon (Nasdaq: AMZN). Microsoft (Nasdaq: MSFT), driven by the robust growth of its Azure cloud services, became the second company, after Apple (Nasdaq: AAPL), to officially join the "$4 trillion club." The once-dominant issue of tariffs is fading, indicating a decreasing investor sensitivity to such policy risks. Profit expectations driven by AI innovation are becoming a core driver of the market, particularly in the tech sector.

More notably, these leading tech companies are increasing their AI investments at an unprecedented pace. Meta announced it would increase its capital expenditure plan to $72 billion by 2025, and Microsoft plans to invest $120 billion in AI infrastructure by 2026. Such massive investments not only demonstrate companies' unwavering confidence in the prospects of AI but also suggest that the commercialization of AI may be even faster than market expectations.

The current market is shifting gears: the dominant pattern of trade frictions in the past few years has gradually receded, and new technology tracks represented by AI have begun to attract more attention, further changing the market's capital allocation pattern.

Amid this wave of tech investment, WealthBee has observed that digital assets are becoming a new option on corporate balance sheets, with an increasing number of listed companies incorporating cryptocurrencies like Bitcoin into their reserve assets. These early adopters often share two key characteristics: First, they are generally concerned about shifts in global monetary policy and potential inflationary pressures, viewing the scarcity and decentralization of cryptocurrencies, particularly Bitcoin, as effective tools for hedging against inflation and systemic risk. Second, their tech industry naturally favors new asset classes. Against the backdrop of a global monetary policy shift, the scarcity of cryptocurrencies makes them a natural inflation hedge for these companies.

In stark contrast to the market trends of the past few years, fueled by retail investor FOMO, the approval of Bitcoin spot ETFs in early 2024, with 11 institutions, including BlackRock and Fidelity, receiving SEC approval, has fundamentally reshaped the crypto market's funding structure and operating logic. By July 2025, this transformation has become even more profound.

Throughout July, Bitcoin prices began a sharp rise at the beginning of the month, breaking through key resistance levels in the first half of the month. Compared to the beginning of the year, the price has been fluctuating upward, with cumulative gains exceeding 20%. Capital inflows have also seen explosive growth, with institutional investors building large positions through ETFs. As of July 2025, the total market size of US Bitcoin ETFs is approximately $110 billion, and the market continues to grow rapidly. Among them, the iShares Bitcoin Trust ETF, owned by asset management giant BlackRock, holds nearly 48% of the market share, holding over 540,000 bitcoins and a market capitalization of approximately $51.5 billion.

Institutional investors no longer view Bitcoin as just a high-risk speculative asset, but have incorporated it into their long-term asset allocation framework, sparking a corporate-level holding competition and driving the market to form a more complex "coin-stock linkage" mechanism: Strategy (Nasdaq: MSTR), the absolute king of corporate Bitcoin holdings, continued to add to its spot Bitcoin positions in July without fear of highs. In its latest Form 8-K filing, it stated that the company purchased $2.46 billion worth of Bitcoin in the week ending in July; Japanese listed company Metaplanet also followed Strategy's lead, making Bitcoin a core strategic asset through a series of acquisitions. Its Bitcoin reserves have increased to 4,206, ranking among the top ten listed companies in the world in terms of Bitcoin holdings. The company also plans to purchase a total of 21,000 Bitcoins by the end of 2026.

It is worth noting that companies are no longer simply "buying and holding" Bitcoin, but are developing a mixed equity/debt/derivative reserve structure. For example, Metaplanet achieves zero-cost financing and hoarding of coins by issuing zero-coupon bonds → granting stock appreciation rights (SARs) → redeeming the bonds with exercise funds upon maturity. The market is also giving a premium to the financial engineering capabilities of such companies.

On the regulatory front, the US SEC has released universal listing standards for cryptocurrency ETPs, allowing assets with at least six months of futures trading history to apply for ETFs. The first batch of altcoin ETFs is expected to be approved in September-October 2025. The Stablecoin Genius Act is just one step away from the President's signature, and the US Digital Asset Market Clarity Act has also begun its Senate process, clearing legal ambiguity for institutional participation. Hong Kong's Stablecoin Ordinance came into effect on August 1st, requiring a 1:1 reserve ratio, a HK$25 million capital threshold, and transparent audits. Chinese companies (such as JD.com) are accelerating their expansion into the market. Clearly, the focus of this round of regulatory coordination is to remove regulatory barriers and improve the efficiency of traditional capital entry.

By Q3 2025, the crypto market will no longer be driven solely by ETF funds, but will firmly establish itself at a new starting point of "institutional leadership + financial engineering + regulatory compliance." The era of price speculation driven by emotions is quietly fading, and a more mature and resilient market ecosystem is developing through the resonance of rules and innovation.

Overall, although the expected changes in the pace of interest rate cuts and the commercialization process of AI will still cause periodic market fluctuations in the future, systemic risks have been significantly reduced, a new digital economic cycle is accelerating, and the deep integration of crypto assets and the traditional financial system is irreversible.