Summary

• Risk assets extend gains as global equities set fresh highs, led by U.S. tech mega caps, while Bitcoin pushes back above US$110,000 to retest prior peaks.

• Mixed jobs data whipsaw Fed expectations: Initial ADP job losses fueled optimism for July cuts, but a stronger-than-expected June unemployment print and nonfarm payroll revision reversed the narrative, reinforcing “higher for longer”.

• Dollar’s worst H1 in decades highlights shifting FX flows, while the new tax bill’s added fiscal stimulus, upcoming tariff deadlines, and Trump’s renewed pressure on the Fed add fresh policy risk.

• Tokenization theme accelerates: Major new tokenized stock launches on Solana and TradFi moves, plus positive SEC remarks, point to growing market structure innovation and institutional appetite for blockchain-based capital markets.

Market Overview

Despite a short trading week for U.S. markets due to Independence Day, markets delivered fresh signs of resilience heading into the first summer stretch of Q3. Ethereum led major assets, rising 7.1% for the week, while Bitcoin reclaimed the US$110,000 mark — both riding on consistent spot ETF inflows and recovering risk appetite after last month’s geopolitical jitters. Global equities also set new highs, fueled by outsized tech stock performance — the S&P 500 rose nearly 2.7% for the week and the NYFANG+ Index outperformed, underlining the market’s continued mega-cap concentration. Meanwhile, the dollar extended its slide (–0.3%) after logging its worst first-half performance in a decade (–10.6%).

Macro sentiment flipped mid-week: weaker ADP private payrolls data initially boosted hopes of a July Fed pivot, but Thursday’s stronger-than-expected nonfarm payrolls and a surprise drop in the unemployment rate tempered those bets. With global M2 money supply now at a record US$55.48T, ample liquidity continues to underpin the rally, but the timing and shape of a Fed pivot remains the key focus — especially as trade policy risks resurface with next week’s tariff deadline.

Figure 1: Weekly and YTD Performance – Crypto and Global Market Assets

For crypto, the backdrop remains supportive: strong global liquidity conditions and structurally sticky flows into spot ETFs continue to anchor the asset class, alongside the expanding universe of regulated staking and tokenized products. As long as risk appetite holds, these trends should keep crypto positioned as a credible diversifier — even if short-term macro data swings keep volatility elevated.

1. Digital Assets

Bitcoin and the broader crypto market staged a strong rebound after June’s geopolitical scare. BTC climbed from ~US$107K to above US$110K, closing in on its previous ATH. Altcoins also followed the rally, with majors like ETH, XRP, BNB and SOL posting healthy gains, though BTC’s dominance remains elevated near 65%, showing the market’s current preference for larger-cap resilience over broader altcoin speculation. 

Figure 2: YTD Indexed Performance – Major Digital Assets

Spot BTC ETFs continued to see robust inflows, adding ~US$1B over the last two days alone. Notably, BlackRock’s IBIT now generates more fee revenue than its flagship S&P 500 tracker, despite having just a fraction of the assets under management — a clear sign of  the growing appetite for crypto assets in traditional markets. On top of this, the first SOL staking spot ETF debuted in the U.S., pulling in US$33M on its first trading day — another milestone for staking-enabled regulated products. Institutional moves such as Deutsche Bank’s crypto custody plans and Ripple’s banking license application kept the spotlight on positive structural and regulatory developments.

Tokenization Gains Steam

The clear standout theme this week was the sharp pickup in equity tokenization. On June 30, Backed Finance officially launched its xStocks platform, minting more than 60 tokenized U.S. equities — including Apple, Tesla, Nvidia, and others — directly onto Solana and various on- and off-chain trading venues. These tokens are 1:1 backed, tradable out of hours, and fully withdrawable to wallets, allowing on-chain DeFi composability for traditional equities for the first time at scale. Trading volumes remained early-stage (around US$1.3M on launch day) but daily tokenized stock volume on Solana has since surged four-fold as traders explored the new instruments.

Figure 3: Tokenized stock volumes have increased four-fold this week, largely on the Solana network

TradFi players are also leaning in: Robinhood’s EU announcement of tokenized stock trading and pre-IPO access helped drive its share price to new highs, showing that markets are rewarding firms positioning for this next wave of capital markets infrastructure. Encouragingly, the SEC’s new Chairman doubled down on the narrative during a CNBC interview this week — the strongest official nod to date for real-world asset tokenization in U.S. markets.

“Tokenization... is the next step to have much more efficiency in the marketplace.”

– SEC Chairman Paul Atkins, July 2, 2025

Still, liquidity challenges loom large: because tokenized stocks trade around the clock while underlying equity markets are closed, spreads can widen sharply, and efficient arbitrage is often unworkable over weekends. Without deep liquidity and frictionless settlement, secondary market prices can deviate meaningfully from the underlying cash market. Since market makers cannot hedge positions off-hours, they may quote wider spreads and smaller sizes — constraining volume and depth. As this market evolves, superior liquidity will become a clear competitive advantage — and a key battleground as platforms compete to deliver more efficient, tokenized equity offerings.

Until mint and redemption mechanisms become frictionless — and more market makers step in to bridge off-hours price gaps — liquidity is likely to remain patchy in the near term. But clearer regulatory signals, growing user appetite for 24/7 tokenized markets, and new product rollouts are steadily paving the way for more equity capital to migrate onto blockchain rails. Over time, as tokenized equities deepen on-chain liquidity, this structural shift could expand the role of digital assets in portfolios.

2. Global Markets

Risk assets strengthened across the board as the week’s economic data confirmed that while the U.S. labor market shows pockets of softening, overall macro momentum remains firm enough to keep Fed policy “higher for longer” — for now. This comes as the U.S. Dollar marked its worst H1 performance since the 1970s, adding tailwinds to global risk sentiment and commodity demand. But the upcoming tariff deadline and political pressure on the Fed are setting up an interesting Q3 backdrop.

Figure 4: Multi-Asset Performance – Equities, FX, Commodities, Bonds, Volatility

• Equities: 

Global stocks closed the week firmly higher. The S&P 500 rose 2.7%, with the NYFANG+ Index up 3.6%, fueled by outsized gains in big tech. The market cap of the top 10 U.S. tech names hit a record US$20.5T, reinforcing the structural tilt towards mega caps. Notably, the total U.S. equity market now stands at US$63.8T, nearly triple the next largest region, Europe.

Figure 5: Total U.S. public equity market reached US$63.8T, 3x larger than Europe

• FX: 

The DXY fell a further 0.32% on the week, extending its year-to-date (YTD) decline to 10.6%, marking its worst first-half performance in decades, comparable to the declines seen after the collapse of Bretton Woods in 1973. The dollar is down double digits against all major currencies as trade tensions, deficit concerns, and political noise weigh. A reversal will be contingent on how deficit concerns, Fed uncertainty, and trade policy unfolds.

• Commodities: 

Gold held flat (+0.19%) as a stronger dollar and rising yields capped upside momentum. WTI crude rose 2.4% despite reports of fresh U.S. stockpile builds and partial OPEC+ output recoveries.

• Bonds: 

US 10Y yields ended slightly higher after the late-week nonfarm payrolls surprise, finishing near 4.35%. Earlier in the week, weaker ADP numbers had pulled yields lower before Thursday’s data flipped the narrative. European yields stayed soft as ECB inflation rose to 2% year-on-year (YoY), keeping the door open for continued policy easing.

• Volatility: 

The VIX dropped another 1.8%, hovering near its lowest since February as traders shift into the summer lull. While macro event risk remains, realized volatility is likely to stay muted unless tariffs or Fed surprises break the calm.

3. Intermarket View

Cross-asset correlations held steady. BTC’s correlation with ETH remains strong (~0.76), while its moderate positive correlation with the S&P 500 (~0.25) underlines that macro drivers like liquidity and ETF flows dominate. 

Interestingly, BTC’s historical inverse relationship with the dollar remains muted: despite the dollar’s worst half-year in decades, Bitcoin didn’t simply trade as an anti-dollar bet and see an automatic upside — structural adoption and ETF demand mattered more. The BTC–Gold and BTC–10Y correlations stayed negative, consistent with the view that Bitcoin remains distinct from classic safe-haven trades.

Figure 6: BTC 2M Correlation Matrix (vs ETH, S&P 500, Gold, DXY, US 10Y)

Macro Outlook: Jobs Data, Fed Pivot and New Tax Bill

This week brought fresh fuel to the Fed pivot debate — and showed why markets may still be too quick to expect a decisive dovish turn. U.S. ADP private payrolls posted a surprise –33K drop — the first since March 2023 — fueling speculation that labor market softness might push the Fed to act as early as July. Job openings also rose strongly, pointing to sector-specific mismatches. But that optimism faded quickly: Thursday’s stronger-than-expected nonfarm payrolls print for June came in at +147K (vs. ~110K expected), and the unemployment rate fell to 4.1%, below the 4.3% consensus. May’s number was revised up too, reinforcing the view that the labor market remains firm enough for Powell to stick with a “higher for longer” stance. Markets re-priced the odds of a July cut back to just ~5%. 

Separately, Trump again publicly criticized Powell and called for his resignation, stating he intends to appoint a Chair more supportive of a “growth first” agenda. While it doesn’t shift Fed policy immediately, it adds to the backdrop of uncertainty. 

On the fiscal front, Trump’s so-called ‘One Big Beautiful’ tax bill just cleared Congress — passing both the Senate and the House — and is expected to be signed by today, July 4. The sweeping package permanently extends 2017 tax cuts, lowers corporate rates, expands deductions (for tips, overtime, child and senior credits), boosts defense and border security spending, and increases the debt ceiling by up to US$5T. The Congressional Budget Office estimates it could add roughly US$3.3T to the national deficit over the next decade. 

This additional fiscal stimulus and structural debt burden could further complicate the Fed’s policy path and keep upward pressure on the dollar’s risk premium. The DXY just closed out one of its worst first-half performances since the end of the Bretton Woods system in 1973 — down nearly 11% YTD and registering double-digit losses against other major currencies — as markets weigh the political and policy shifts ahead. Markets remain highly sensitive to any new fiscal headlines that could add further uncertainty.

Meanwhile, trade policy is back in focus as the 90-day U.S. tariff pause ends on July 9. Trump confirmed he does not plan to extend the deadline, which could increase the risk of supply chain disruptions if no new trade agreements are reached. Some optimism came through the new U.S.–Vietnam trade deal, which aims to expand agricultural and technology access, though early-stage negotiations with Japan appear to have shown signs of friction. Any unexpected tariffs reimposed could add inflationary upside just as the Fed tries to steer core PCE toward 2%.

In Europe, the ECB’s June inflation print landed at 2.0%, exactly on target — giving the ECB some breathing room to maintain its dovish bias, especially as Germany’s inflation unexpectedly moved to the downside. The global policy divergence could deepen dollar weakness if U.S. fiscal slippage and political pressure persist.

The Week Ahead

Markets will be watching whether next week’s data confirm the mixed signals from the labor market and feed into the evolving rate-cut debate. The end of the 90-day U.S. tariff pause will also be critical for supply chains and inflation expectations. 

On the crypto side, ecosystem developments and real-world asset narratives may get a further boost from industry events and any tokenization partnerships announced. Separately, Republicans in Congress have declared the week of July 14 as ‘Crypto Week’, with planned hearings and new legislative proposals that could shape the next phase of U.S. crypto policy. While still two weeks away, early drafts of these proposals may emerge in coming days.

Figure 7: Key Macro and Crypto Events for the Week of July 4–July 10, 2025