Risk is back – and BTC has smashed through its all-time highs, hitting above USD 118,000 for the first time ever. After nearly two months of grinding consolidation, BTC has finally broken free, leading the charge as risk assets melt higher.
It is not just crypto. Equity markets continue to clock new records, the Nasdaq and S&P 500 both closing at fresh highs this week as the macro backdrop remains eerily “Goldilocks”.
In the background, the U.S. just passed Trump’s “Big Beautiful Bill”, raising the debt ceiling by USD 5 trillion and cementing permanent tax cuts. Another round of fiscal fireworks is set to inject fresh demand and push debt metrics deeper into uncharted territory.
For now, though, the takeaway is clear: ceilings – debt, price, or otherwise are meant to be broken.
Macro: Goldilocks, Debt Games, and Tariff Fog
The past two weeks have been defined by resilient macro data and fiscal fuel.
- NFP out last week showed that the U.S. added 147,000 jobs in June, beating expectations, while average hourly earnings cooled slightly from 3.8% to 3.7%.
- ISM Manufacturing remained in contraction, while Services PMI barely clung to expansion.
This data mix gives the Fed room to hold steady – hence the market’s shift toward “wait-and-see” mode, with two rate cuts still priced for 2025 but no near-term urgency.
The real market mover has been fiscal dominance. The passage of Trump’s “Big Beautiful Bill” has raised the debt ceiling by USD 5 trillion and set the U.S. on a path toward an eye-watering debt-to-GDP ratio. For now, this is stimulative: equity markets love it, growth expectations are buoyed, and risk appetite is being force-fed.
But lurking underneath is the potential for bond market stress. With the Treasury poised to issue massive new supplies, any misstep in how debt is financed could spark funding market volatility. For now, markets are brushing this off, but it is a volatile tail risk worth watching.
Meanwhile, trade tensions continue to simmer:
- New 50%-200% tariffs on copper, pharmaceuticals, and other sectors are set to kick in August 1st.
- New 35% tariffs on Canadian goods next month and planned blanket tariffs of 15-20% on most other trading partners.
- Markets are largely dismissing these risks – expecting Trump’s familiar delay or water-down tactics to remain in play.
Crypto: Ceilings Smashed, Flows Relentless
Crypto finally caught up with the broader risk rally as BTC surged to fresh all-time highs above USD 118,000 (+7.8% on the week), breaking free from its long-standing USD 100,000–110,000 consolidation range. BTC’s breakout continues to be fueled by strong inflows, with BTC ETFs pulling in over USD 1.6 billion this week.
ETH joined the rally, pushing above USD 3,000 (+16% on the week), although we have some wood to chop until we see ATH above USD 4,400. The breakout is gaining broader momentum, and encouragingly, ETH ETF inflows are picking up, with this week’s flows exceeding USD 700 million – a clear sign that institutional participation in ETH is starting to catch up.
Implied volatility has surged, with 7-day ATM IV rising to 39.4% for BTC and 70.9% for ETH – signaling a clear repricing of short-term risk.
At the same time, 25D RR have turned positive for both BTC and ETH, reflecting growing demand for topside optionality as traders position for further upside.
The key message: flows remain dominant, and the breakout intact.
Looking Ahead: Liquidity Rules, but Eyes on CPI and Tariffs
With BTC breaking to new highs and equities in melt-up mode, the immediate focus shifts to the next catalysts:
- U.S. CPI next week: A soft print could reignite rate cut bets.
- August 1st tariff enforcement: While markets expect more delays, any surprise implementation could inject volatility.
- FOMC (July 30) and PCE (July 31): Both will shape the next phase of policy expectations.
The dollar’s weakness, combined with expanding global liquidity, continues to set a supportive tone for risk.
For now, though, markets are making one thing clear: the ceiling, whether in prices, debt, or expectations, was made to be broken.
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