Hi everyone – welcome back to Evolve’s Bitcoin Monthly newsletter. We hope our views on Bitcoin adoption and market conditions prove useful for investors considering Bitcoin as an investment, or for those managing an existing Bitcoin position.
After June, we would have settled for a quiet month. July was not that. It delivered a Federal Reserve with three members voting to raise rates, the worst single day for the Magnificent Seven since 2025, a stalled crypto bill in Washington, and a major hardware-wallet exploit. Bitcoin’s response to all of it: up roughly 7.5% on the month.¹ The price slipped briefly below $58,000 on July 1 – marginally under June’s low, and so far the low of this entire drawdown – recovered into the mid-$60,000s, and closed near $63,000, per CoinDesk.¹ That made July the first positive month since April. More importantly, it answered a question June could not: what does this market do when the bad news keeps coming but the leverage is already gone?
Last month we argued that June’s damage traced to identifiable macro sources – a new Fed regime, a rotation into AI, an ETF redemption wave – rather than anything broken in the thesis. July was the test of that claim. Every one of those pressures continued or intensified, and Bitcoin absorbed all of it. Our framework is unchanged: governments continue to overspend, adoption continues to broaden, and Bitcoin-backed products keep working their way into traditional finance. What July added is evidence that the selling was finishing, not starting.
The Stress Test
On July 29, Kevin Warsh chaired his second FOMC meeting, and the committee again held the federal funds rate at 3.50–3.75%.² The headline was the same as June; the vote was not. Three members – Beth Hammack, Neel Kashkari, and Lorie Logan – dissented in favour of raising rates, a sharp break from what had been a unanimous vote in June, telling markets that the live debate inside the Fed is between holding and hiking, not holding and cutting.² A month ago, that mix would have been worth a multi-thousand-dollar flush. This time Bitcoin barely moved, trading near $64,000 through the decision, with the Fear & Greed Index at 28 – still fearful, but a long way from June’s reading of 12.³,⁴
The sterner test came a week earlier. CoinDesk reported that on July 23, the Magnificent Seven shed roughly $800 billion of market value in a single session – their worst day since the tariff selloff of April 2025 – as investors began asking whether AI infrastructure spending is running ahead of the profits meant to justify it.⁵ Recall the “substitution effect” we described in June – money leaving Bitcoin for AI stocks. July ran that experiment in reverse. The AI trade cracked, and Bitcoin held near $65,000, down less than 1% on the day.⁵ If Bitcoin were merely a risk-proxy appendage of the tech trade, it should have led the market lower. It did not.
The July 23 session was the sharpest single-day rupture, but a broader semiconductor unwinding had been building since early in the month. Forbes reported that in the first week of July, roughly $1.3 trillion of global chip-sector value had already been erased, with Intel alone down 21% over seven trading days – driven by mounting concerns over its 18A foundry yields and AMD’s growing data-centre revenue advantage over Intel.⁶
Bitfinex’s analysts offered the cleanest explanation: “crypto fell less than levered equity themes because the forced-selling fuel was already spent.”¹ June’s flush took the leverage out of the system, and average daily liquidations ran well below the year’s typical range all month.¹ We would add the macro point: a central bank talking tough while Washington runs historic peacetime deficits remains precisely the environment our thesis was built for. Nothing about July’s hawkishness changes the fiscal arithmetic – it just raises the cost of ignoring it.
Two Open Files, Still Open
We have been carrying two open files since the spring, and honesty requires reporting that neither closed in July.
The CLARITY Act missed its window. CoinDesk reported that Senate Majority Leader John Thune conceded on July 23 that the market-structure bill would not pass before the August recess, with negotiations still stuck on the ethics provisions restricting senior officials’ crypto ventures.⁷ We wrote in June that the realistic window was before the recess; that window has now closed, and the odds of passage this year have clearly lengthened. The bill is not dead – debate resumes in September, and the White House insists it remains a priority – but a catalyst we hoped would fire in July is now a file for the fall.⁷ Our view on the substance is unchanged: the most bipartisan crypto legislation in U.S. history is not stalling for lack of support; it is stalling over who it applies to.
The Strait of Hormuz file is quieter, but no more resolved. Since the blockade lifted, CNBC reported Iran has exported more than 40 million barrels of crude – selling, by its own account, at a roughly 20% premium.⁸ Oil markets have calmed. But the 60-day clock on a final agreement expires in mid-August, and the hardest question – who governs the strait afterward – remains open: As Newsweek reported in late June, President Trump had floated collecting tolls on transits once the window closes, while Tehran insists the waterway is sovereign territory and has already threatened re-closure once.⁹ We will say what we said in May and June: progress, not resolution. By our next edition, the deadline will have passed – one way or the other.
A $38 Million Lesson in Custody
CoinDesk reported that on the morning of July 31, an attacker drained 594 BTC – roughly $38 million – from about 500 Coldcard hardware wallets in 25 minutes.¹⁰ The cause was a firmware bug introduced in March 2021: affected devices silently skipped their hardware randomness generator and fell back to a predictable software fallback, producing wallet keys an attacker could eventually reconstruct.¹⁰ Five years of quietly compromised wallets, swept in under half an hour.
Two things are worth separating. First, this was not a failure of Bitcoin. The protocol did exactly what it was designed to do; the flaw lived in one manufacturer’s device firmware, and newer models appear unaffected.¹⁰ Second, it was a failure of a model. Self-custody is one of Bitcoin’s foundational freedoms, and for technically sophisticated holders it remains a legitimate choice. But “be your own bank” means being your own security department, and July showed that even the most respected hardware in the industry can carry a silent, five-year-old flaw. Market observers were quick to name the likely consequence: an acceleration toward regulated custodians and ETF wrappers, where custody is professional, audited, and institutionally supervised.¹¹ We have long argued that institutional-grade custody was the single biggest thing the ETF structure brought to this asset class. Weeks like this one are why.
Under the Hood
The ETF complex turned positive – barely. Cointelegraph reported U.S. spot Bitcoin ETFs took in a net $172.4 million in July, the first positive month since April and the end of a nearly $7 billion redemption wave across May and June.¹² It was also among the more modest positive months in the products’ history, and year-to-date flows remain roughly $5.3 billion negative.¹² We read it the way Bitfinex’s traders do: an institutional bid that is “aggressive or price-agnostic” is the signal that a durable bottom is in, and that signal has not fired yet.¹ What has changed is the direction of travel – redemptions exhausted themselves, and the marginal flow flipped from out to in.
On-chain, Glassnode’s early-July assessment carried a title we appreciate for its bluntness: “Bottom Building in Progress.”¹³ Bitcoin has now spent roughly five months below both the short-term holder cost basis (about $72,000) and the “true market mean” near $76,600 – one of the more extended deep-value episodes in its history, and conventionally the foundation from which cyclical bottoms are built.¹³ Long-term holder capitulation was still running hot in early July, with realized losses peaking near $280 million per day, the heaviest since December 2022.¹³ That is the anatomy of a bottom being built, not a bottom confirmed. The standard we set in June still applies: capitulation must exhaust, and price must reclaim the short-term holder cost basis. But extended stretches where patient capital accumulates below everyone’s break-even are, historically, how cycle lows form.
Looking Ahead
Three voices we respect looked at the same market in July, reached for three different vocabularies, and arrived at the same conclusion.
Fidelity’s Jurrien Timmer noted that Bitcoin is approaching the power-law support line his model has tracked since 2015 – a line that has caught every major bottom in that span, currently sitting near $58,000 – and described current prices as a probable accumulation zone, while carefully declining to call the low or the catalyst.¹⁴ Bitwise’s Matt Hougan went further: “I think we may be at a turning point. By the end of the year, we could be substantially higher,” arguing the baton is passing from retail and corporate buyers to institutions.¹⁵ And Lyn Alden – describing the weakest Bitcoin sentiment she has personally observed, with “nothing coming to save” the asset – still sees Bitcoin near the low end of its historical valuation range, with a base case that grinds flat-to-higher, earning its next advance on fundamentals rather than hype.16
August brings a jobs report, the Hormuz deadline, and a thin seasonal stretch; the trading desks’ base case is choppy and range-bound until real yields ease or ETF demand returns in force.¹ We make no monthly calls – July is a reminder of why. But consider what the month showed: a market that opened at its lows, absorbed a hawkish Fed, a trillion-dollar tech unwind, a stalled bill, and a $38 million exploit, and finished up 7.5% is not a market where sellers are in control. It is a market where the impatient have finished leaving and the patient are quietly taking their place. That process rarely announces itself in real time; it shows up later, in hindsight, as the stretch of the chart everyone wishes they had bought.
We remain constructive Bitcoin investors, and we look forward to what August brings.
Sources
1 CoinDesk, “Bitcoin holds monthly gain, faces ‘choppy’ August as ‘forced-selling’ exhausted, analysts say,” July 31, 2026. https://www.coindesk.com/markets/2026/07/31/bitcoin-holds-onto-july-gain-as-forced-selling-fuel-was-already-spent-analysts-say
2 Federal Reserve, “Federal Reserve issues FOMC statement,” July 29, 2026. https://www.federalreserve.gov/newsevents/pressreleases/monetary20260729a.htm
3 Cointelegraph (via Bloomingbit), “Crypto Fear & Greed Index Falls to 12 as Extreme Fear Deepens,” June 25, 2026. https://en.bloomingbit.io/feed/news/114994
4 TheStreet Crypto, “Crypto markets react to Fed’s July interest rate decision,” July 29, 2026. https://www.thestreet.com/crypto/fed/markets-react-to-feds-july-interest-rate-decision
5 CoinDesk, “Bitcoin steady around $65,000 as ‘Mag 7’ have worst day since 2025,” July 24, 2026. https://www.coindesk.com/markets/2026/07/24/bitcoin-holds-near-usd65-000-as-usd800-billion-ai-selloff-leaves-crypto-largely-untouched
6 Forbes, “Intel Stock Down 21%: Inside The July 2026 Semiconductor Selloff,” July 8, 2026. https://www.forbes.com/sites/petercohan/2026/07/08/intel-stock-down-21-inside-the-july-2026-semiconductor-selloff/
7 CoinDesk, “CLARITY Act expected to miss its window before Congress’ summer break, leadership says,” July 23, 2026. https://www.coindesk.com/policy/2026/07/23/clarity-act-expected-to-miss-its-window-before-congress-summer-break-leadership-says
8 CNBC, “Iran says it is selling oil at 20% premium as end of U.S. blockade sees 40 million barrels exported,” July 1, 2026. https://www.cnbc.com/2026/07/01/iran-us-mou-negotiation-war-oil-exports-strait-of-hormuz-.html
9 Newsweek, “Who controls the Strait of Hormuz? Uncertainty grows after 60-day deal,” June 21, 2026. https://www.newsweek.com/hormuz-uncertainty-grows-as-questions-mount-over-control-after-60-day-deal-12100981
10 CoinDesk, “Major bitcoin wallet flaw drains 594 BTC in 25-minute sweep,” July 31, 2026. https://www.coindesk.com/tech/2026/07/31/major-bitcoin-wallet-flaw-drains-594-btc-in-25-minute-sweep
11 CoinDesk, “Coldcard’s $38 million (so far) exploit shakes faith in self-custody, may push investors to ETFs,” July 31, 2026. https://www.coindesk.com/business/2026/07/31/coldcard-s-usd38-million-so-far-exploit-shakes-faith-in-self-custody-may-push-investors-to-etfs
12 Cointelegraph, “Bitcoin ETFs post first monthly inflow since April,” August 1, 2026. https://cointelegraph.com/markets/bitcoin-etfs-july-green-despite-late-month-selling
13 Glassnode, “The Week Onchain (Week 27, 2026): Bottom Building in Progress,” July 8, 2026. https://research.glassnode.com/the-week-onchain-week-27-2026/
14 CoinDesk, “Bitcoin is nearing a power law support line Fidelity has tracked since 2015,” July 12, 2026. https://www.coindesk.com/markets/2026/07/12/bitcoin-is-nearing-a-power-law-support-line-fidelity-has-tracked-since-2015
15 CNBC, “Bitcoin at a turning point, could be ‘substantially higher’ by year end, says Bitwise CIO,” July 15, 2026. https://www.cnbc.com/video/2026/07/15/bitcoin-at-a-turning-point-could-be-substantially-higher-by-year-end-says-bitwise-cio.html
16 Benzinga, “Bitcoin Isn’t The ‘Fastest Horse’ Anymore, Top Analyst Says,” July 8, 2026. https://www.benzinga.com/crypto/cryptocurrency/26/07/60336711/bitcoin-isnt-the-fastest-horse-anymore-top-analyst-says-theres-nothing-coming-to-save-btc
