Bitcoin is fluctuating at a high level, stablecoin supply is rising, and regulation is accelerating asset tokenization.

A. Market Overview

Macroeconomic Liquidity

Recently, the liquidity of the currency has shown an improving trend. The target range for the federal funds rate remains between 4.25% and 4.50%. Authorities have not provided clear guidance on a rate cut in September, emphasizing that inflation risks still exist, and stating that the employment situation is stable, which has suppressed expectations for a rate cut this year. The US dollar index has risen to a two-month high, and US stocks continue to reach new highs. The cryptocurrency market has performed relatively weak.

Market Trends

This week, Bitcoin is oscillating at a high level, while altcoins are generally weakening, and cryptocurrency stocks are collectively plunging. The market mainly revolves around the Ethereum ecosystem. The top five tokens by growth are LOKA (300%), ZORA (60%), ZBCN (50%), KTA (40%), and REKT (40%). The top five tokens by decline are TKX (60%), FARTCOIN (30%), M (30%), VIRTUAL (20%), and GRASS (20%).

ZORA is a socialfi project that collaborates with Base chain applications. Supported by a certain foundation, it surged 10 times from the bottom. The old stablecoin USDE and the new stablecoin USDTB of the ENA project continue to be profitable and have established a U.S. stock version for continuous buying. ENA has partnered with a certain lending platform to release stablecoin USDE for circular lending. CFX is a compliant public chain in China, and Hong Kong plans to issue stablecoin licenses in September.

On-chain data

Bitcoin liquidity is facing challenges. An early large holder sold off more than 80,000 bitcoins in over-the-counter transactions, with a trading volume of nearly $10 billion. However, the market effectively absorbed the selling pressure, and 97% of the circulating supply remains profitable.

The supply of stablecoins continues to grow by 1%. Institutional funds have seen a continuous net inflow, driven by Ethereum, with this year's inflow already surpassing last year's total.

The long-term trend indicator MVRV-Z Score reflects the overall profitability of the market. The current indicator is 2.6, close to the middle range. An indicator greater than 6 indicates a top range, while less than 2 indicates a bottom range. If MVRV falls below the critical level of 1, holders are generally in a state of loss.

Futures Market

This week's funding rate remains at a normal level of 0.01%. A rate between 0.05% and 0.1% indicates that there is more long leverage, which may suggest a short-term top; a rate between -0.1% and 0% indicates that there is more short leverage, which may suggest a short-term bottom.

The Bitcoin futures open interest has started to decline. The futures long-short ratio is 1.1, reflecting a neutral market sentiment. This indicator below 0.7 indicates fear, while above 2.0 indicates greed, but it has been quite volatile recently, making its reference value limited.

Spot Market

This week, Bitcoin has declined, while the Ethereum to Bitcoin exchange rate remains strong, with a few altcoins related to stablecoin concepts leading the charge. The market is rotating from Bitcoin to Ethereum and altcoins, and it is expected that risks will gradually accumulate in the later stages.

B. Stablecoins and Tokenization of Physical Assets

Development of Stablecoins

A financial regulatory agency has stated that the first stablecoin issuance license may be issued in early next year, and initial compliant stablecoin holders will need to be verified. The regulatory agency has an open attitude towards fiat currency types, and stablecoin issuers can apply for stablecoin licenses linked to a single or a basket of fiat currencies.

A blockchain company under a certain e-commerce giant has registered the names "JCOIN" and "JOYCOIN", possibly as its stablecoin brand. The company is participating in a regulatory sandbox program and is actively testing stablecoin trading scenarios based on the Hong Kong dollar.

A major payment giant has announced the launch of a new feature in the US market, allowing small merchants to accept payments in over 100 cryptocurrencies, including mainstream coins. This move aims to lower the barrier for merchants to use crypto assets and promote the application of cryptocurrencies in everyday scenarios.

An institution has made a strategic investment of $10 million in a synthetic US dollar stablecoin project. The project supports multiple assets as collateral, including mainstream stablecoins, cryptocurrencies, and tokenized government bonds.

Tokenization of physical assets

The U.S. government working group released a report on cryptocurrency policy, proposing several recommendations: requiring regulators to clarify rules for crypto assets; promoting relevant legislation; supporting blockchain tokenized securities, and opposing the issuance of central bank digital currencies.

The Hong Kong government has released a new digital asset policy statement, confirming its commitment to building a global digital asset innovation center. Regulatory agencies have established a sandbox mechanism to encourage the testing of innovative technologies such as blockchain, AI, and asset tokenization. Hong Kong is actively promoting the implementation of tokenized bonds, funds, and other products.

A major bank in Japan has acquired a high-rise office building in Osaka for approximately $680 million, planning to tokenize the asset using blockchain technology and issue digital securities. Institutional investors can participate through private REITs, while retail investors can purchase tokenized shares on specific platforms. This initiative lowers the investment threshold and enhances asset liquidity and market transparency.