The week’s macro backdrop deteriorated sharply. A record leverage unwind in Asia, a contested decision at the FOMC and the continuation of the AI selloff arrived in the same five sessions. Crypto’s response was muted. Bitcoin gave up around 3% and stayed within the US$63,300 to US$65,500 range.<\/p>\n\n
The range held through more than price pressure. The Senate shelved the Clarity Act ahead of the summer recess, leaving its path through the remainder of this Congress uncertain, and the market barely registered it.1<\/sup> Digital asset ETPs saw US$426M of outflows over the same period, and the range still held. For advisers weighing a small allocation, the useful data point this week is not the size of the drawdown but its size relative to equities.<\/p>\n\n On Wednesday the Fed held rates at 3.50-3.75% for a fifth consecutive meeting, on a contested 9-3 vote with three dissents in favour of a quarter-point hike.2<\/sup> The sharper signal came from the press conference. Asked about inflation still running above target, Warsh was categorical: “There is no soft inflation target. There’s only a target, and it’s 2%.”3<\/sup><\/p>\n\n The bond market did not take him at his word. Yields rose materially across the curve and the 30-year reached its highest level since 2007. Markets still price a September hike at around 57%, down from close to 70% earlier in the afternoon, which leaves a hike as the base case rather than a tail risk.4 <\/sup>That combination matters for asset allocation. A central bank struggling to convince markets of its inflation resolve, set against rising long-end yields, is the specific environment in which an asset with a fixed and unalterable supply schedule justifies its inclusion. The argument is not that bitcoin outperforms in every regime. It is that its supply cannot be revised in response to political pressure, which is precisely the variable markets are currently pricing.<\/p>\n\n Q2 earnings from Alphabet, Tesla, Meta and Microsoft produced a consistent pattern. Revenues held up, margins compressed at Meta and Tesla, and AI capital expenditure kept climbing. Alphabet raised full-year guidance to US$195-205B and Meta lifted the floor of its range to US$135B.5<\/sup><\/p>\n\n The market response was equally consistent. Investors focused heavily on free cash flow, rewarding companies whose spending is backed by visible, monetisable demand and punishing those whose capex guidance keeps ratcheting higher. The distinction being drawn is between investment that converts into cash and investment that converts into a promise.<\/p>\n\n For advisers, this is the part worth carrying into client conversations. An asset with no capex line and a supply schedule that cannot be revised upwards sits outside that scrutiny entirely. It does not need to demonstrate return on invested capital, because it invests nothing. That is not an argument for size. It is an argument for why the exposure behaves differently from the equity risk most portfolios already carry, which is the whole point of holding it.<\/p>\n\n The week offered a clean test of that proposition. Macro conditions worsened, flows were negative, and the legislative catalyst slipped. Bitcoin traded in a range.<\/p>\n\n Sources<\/strong><\/p>\n\n 1<\/sup> CoinDesk, 23 Jul 2026<\/p>\n\n 2<\/sup> Federal Reserve, FOMC statement, 29 Jul 2026<\/p>\n\n 3<\/sup> Federal Reserve, Chair Warsh press conference, 29 Jul 2026<\/p>\n\n 4<\/sup> CME FedWatch, 29 Jul 2026<\/p>\n\n 5<\/sup> Alphabet and Tesla Q2 2026 results, 22 Jul 2026; Meta and Microsoft Q2 2026 results, 29 Jul 2026<\/p>\n","protected":false},"excerpt":{"rendered":" Bitcoin gave up around 3% through a record Asian deleveraging, a contested Fed hold and a deepening AI selloff. What did not happen matters more.<\/p>\n","protected":false},"author":2,"featured_media":1686,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"off","_et_pb_old_content":"","_et_gb_content_width":"","iawp_total_views":56,"footnotes":""},"categories":[69],"tags":[],"class_list":["post-3112","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-market"],"yoast_head":"\nThe Fed held, the bond market was not convinced<\/strong><\/h2>\n\n
Demand for AI is not slowing<\/strong><\/h2>\n\n