A Chip Selloff and Hawkish Fed Voices Weigh on Crypto

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In Today's Note

• A selloff in chipmakers, a sixth consecutive night of US strikes on Iran, and two Fed speakers setting out a more hawkish view all weighed on risk. The S&P 500 closed down 0.51% and the Nasdaq-100 fell 1.62%, while the Philadelphia Semiconductor index plunged 4.29%, taking its one-month loss beyond 10%. Dallas Fed President Logan argued for modestly higher rates and Kansas City's Schmid named inflation his biggest worry, both flagging AI-driven demand as an upside price risk. Brent held near $85 and is on track for a 12% weekly gain with shipping halted in the Strait of Hormuz. BTC was last at $62.8K, down 1.9% over 24 hours, with ETH at $1.83K, down 3.0%.
• Ondo Finance and SBI Group formed a strategic partnership to bring tokenized real-world assets to Japan, with SBI's yen-backed JPYSC stablecoin used for onchain settlement and collateral. T. Rowe Price launched TKNZ, an actively managed spot crypto ETF on NYSE Arca carrying a 0.75% fee, opening at 40.75% BTC, 18.42% ETH and 11.01% BNB. Citadel Securities invested $400M in Crypto.com at a $20B valuation, following its $200M Kraken investment at the same mark, while Multicoin Capital backed Hyperliquid-based Trasia Labs with a $1.75M seed. US lawmakers continued to negotiate the CLARITY Act, with conflict-of-interest provisions the final obstacle to bipartisan support.

Market Snapshot: Overnight Moves

Macro & Markets

• A selloff in chipmakers, another wave of strikes between the US and Iran, and two Fed speakers outlining a more hawkish view on monetary policy all weighed down on spot prices across crypto assets and risk-on US equities.
• BTC trades slightly below $63K at the time of writing, down from $64.7K yesterday, while ETH is falling back towards $1,800.
• Major US benchmark indices all traded lower yesterday, with the S&P 500 ending the day down 0.51% and the Nasdaq-100 down a larger 1.62%.
• The Philadelphia Semiconductor Sector index plunged 4.29%, bringing its one-month losses down to over 10% now.
• The US intensified its attacks on Iran, launching their sixth consecutive night of strikes yesterday, with shipping traffic now at a halt in the Strait of Hormuz.
• The American military has launched a series of strikes over the past week intended to degrade Iran’s ability to attack commercial shipping.
• In a post on X, the US Central Command said the latest bout of strikes was aimed at coastal surveillance and air defence sites, military logistics infrastructure and maritime assets.
• The strikes have not been one sided either, Iran continued to respond by attacking US bases in Kuwait, Jordan and Bahrain, with Kuwaiti Armed Forces stating they had intercepted 32 Iranian drones targeting “vital” institutions.
• Additionally, in a sign that tensions are worsening, the Wall Street Journal reported that the US also launched attacks on multiple bridges in Iran as part of an effort to cut off supply routes to the port city of Bandar Abbas and a naval base in the Strait of Hormuz that Iran has been using to attack ships in the region.
• Earlier in the week, in an interview with Fox News, President Trump had threatened to escalate military strikes to Iranian infrastructure stating, "We're going to hit them very hard the night after. And then next week it gets really bad for them because next week comes the power plants. We're going to knock out all of their bridges unless they get to the table and negotiate."
• Brent crude continues to trade around $85 a barrel, and is on track to finish the week with a 12% gain.
• Reuters also reported that Iran has asked its Houthi allies in Yemen to close the Bab el-Mandeb gateway to the Red Sea, a crucial pathway for oil exports from Saudi Arabia, should the US strike Iran’s power network, adding further possibility of a supply squeeze.
• In a speech in Houston yesterday, Dallas Fed President Lorie Logan justified her reasoning for “modestly higher interest rates would better balance the outlook and risks for the FOMC’s dual mandate goals.”
• Logan claimed “In monetary policy as in hockey, you have to skate where the puck is going”, using the line to claim that while the recent June CPI print showed “relief”, the more important focus is on where inflation is heading, which according to the Dallas President “does not appear to be headed sustainably back all the way to 2 percent.”
• Logan reiterated that claim stating later in her speech that, “If inflation is not heading all the way to 2 percent on its own, then at least some policy restriction is needed to help get it there."
• Speaking on what has now become a very topical subject among Fed officials, Logan provided her outlook on the implications of AI for the US economy.
• While "AI and other new technologies may eventually generate a surge in productivity and allow the economy to supply more goods and services", the “potential size and timing of those gains are uncertain.”
• For now, what is clear is that “the demand effects are here already. And when demand outstrips supply, the result is higher prices."
• Her New York counterpart, John Williams, recently cautioned that if AI-driven demand was sustained, the Fed wouldn't be able to "look through" its results.
• Kansas City Fed President Jeff Schmidt also warned that inflation is his biggest worry for the US economy right now too.
• Schmid, who is not a voter this year on the FOMC, said "I am uncomfortable ever assuming that a burst of inflation is likely to be temporary. Inflation shocks are not intrinsically transitory."
• He also slightly dismissed the recent softer-than-expected June CPI print, stating that "it would be premature to put too much weight on a single data point relative to recent trends… With the price of oil once again rising, it is uncertain how persistent any relief on energy will be."
• On the topic of forward guidance, Schmid appeared to offer a slightly contrasting view to Chair Warsh, "Independence demands accountability. And we can only be accountable if we are transparent on how we arrive at the decisions we make… If we don’t explain our decisions, the public is left to speculate… Transparency allows the public to help policymakers identify and avoid blind spots."

DeFi / Web3 / Altcoins / Crypto

• Ondo Finance, a tokenized real-world asset platform, and SBI Group, one of Japan's largest financial services groups, have formed a strategic partnership to bring Japanese equities onchain and distribute Ondo's tokenized assets across SBI's ecosystem.
• The companies also plan to use SBI's JPYSC, a yen-backed stablecoin, for onchain settlement and collateral, while Ondo Global Markets (BVI) Limited will issue the tokenized Japanese equity products.
• U.S. lawmakers are working to advance the CLARITY Act, a bill that would establish a federal regulatory framework for digital assets, but negotiations remain stalled over ethics rules related to President Donald Trump's crypto interests.
• On Thursday, Trump met with Republican senators and senior White House officials to discuss the remaining conflict-of-interest provisions in an effort to break the deadlock and move the legislation toward updated Senate text.
• The meeting is significant because the ethics dispute has become the final major obstacle to securing the bipartisan support needed for the bill to advance before Congress' upcoming recess.
• Gabriel Perez, President Trump's longtime teleprompter operator, is reportedly in settlement talks with the CFTC, the U.S. derivatives regulator, over allegations he used advance knowledge of Trump's speeches to make more than $100K betting on Kalshi, a federally regulated prediction market platform, according to ABC News.
• Kalshi said it flagged the suspicious trading activity and referred it to the CFTC, with Head of Enforcement Bobby DeNault stating, “Our surveillance team promptly flagged and referred these trades to the CFTC, and we are cooperating and assisting regulators.”
• The White House said Perez has been placed on unpaid administrative leave, while the CFTC has not publicly commented on the reported investigation.
• Global asset manager T. Rowe Price has launched TKNZ, an actively managed spot crypto ETF that holds multiple tokens and began trading on NYSE Arca with roughly $15M in assets.
• The fund’s managers can adjust holdings based on the firm’s research and market outlook, while the ETF carries a 0.75% management fee and does not currently stake any assets.
• Initial allocations are 40.75% BTC, 18.42% ETH, 11.01% BNB, 9.44% SOL, 9.37% XRP, 6.45% HYPE, 3% XLM, 1.28% DOGE, 0.16% USDC and 0.11% cash.
• Citadel Securities invested $400M in Crypto.com, a digital asset exchange, at a $20B valuation in what the companies described as the exchange’s first institutional funding round.
• Crypto.com plans to use the capital to expand its tokenized securities and derivatives businesses as it pushes further into institutional financial markets.
• The deal follows Citadel Securities’ $200M investment in Kraken at the same $20B valuation and adds to its broader exposure to crypto firms including Ripple, Digital Asset and Alpaca.
• Multicoin Capital has made its first investment in the Hyperliquid ecosystem, backing Trasia Labs with a $1.75M seed round.
• Founded by former Multicoin partner Mable Jiang and Edison Chen, Trasia is building a mobile-first perpetual futures trading platform tailored for Asian users.
• The platform will initially offer Hyperliquid's native perpetual markets before rolling out its own HIP-3-powered markets later this year, with a focus on Asian equity perpetuals.
• Trasia says over $35M in HYPE and USDC has already been committed to support the launch of its HIP-3 markets. Rather than competing for Hyperliquid's existing traders, the startup is targeting a new wave of users through localized products, regional partnerships and a simplified onchain trading experience.
• The investment comes just weeks after Multicoin revealed HYPE as one of the largest holdings in its liquid fund, reinforcing the firm's growing conviction in the Hyperliquid ecosystem.
• MegaETH, an Ethereum scaling network, is ending its Mega Mafia accelerator after two cohorts, saying the program supported about 20 teams that raised more than $80M but delivered limited long-term value back to the protocol.
• Core team member Shuyao Kong said most of the accelerator’s successful projects are no longer building on MegaETH, while the network took no equity, governance rights or other ownership stakes in the startups it backed.
• MegaETH will continue supporting existing participants but will not launch a third cohort, instead redirecting funding and engineering resources toward first-party consumer apps and projects that depend specifically on its wallet, stablecoin and high-performance infrastructure.

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