Monthly Update July | Bitcoin breaking new records
In this month's update, we'll delve into the current Bitcoin price, developments concerning trading fees, the digital euro, and the rise of Ethereum.
The most dominant factor in the current Bitcoin rally is the continuous inflow in ETFs, bringing in billions of dollars in new capital. Two significant developments have contributed to this rise in recent days, primarily stemming from Trump's deals: a 'truce' has been agreed upon between the United States and China, with trade tariffs still under discussion, and a deal has been struck between the US and the EU.
Despite this, the final percentages are expected to settle somewhere between 15-20%. This figure is also the outcome of the trade deal between the US and the EU. Last Monday, Trump shook hands with Ursula von der Leyen: an official agreement between both parties has been concluded. This was, of course, "the best deal ever" according to the President, but for Von der Leyen, the main priority was to minimise harm to European citizens and businesses and provide certainty.
The trade deal spanned no less than three pages: page one outlines the 15% import duty that the US is imposing on most European import goods. Furthermore, the EU has promised to purchase $750 billion worth of energy from America over the next three years, specifically oil, liquefied natural gas, nuclear fuel, and technology. This was viewed as a positive outcome by several European Commissioners, as the alternative – a total trade war – had to be avoided at all costs.
The effect on the market was noticeable: Bitcoin immediately dropped back to $116,000. Most analysts remain unconcerned and believe that Bitcoin will recover from this; the coin is already showing signs of rising again.
The immediate goal is to enable payments through Distributed Ledger Technology (DLT), essentially a decentralised database like a blockchain. The ECB is collaborating with TARGET Services, a company established by the Eurosystem to ensure the smooth flow of cash and other financial products across Europe. The initial trial period for the Pontes phase is set to commence in the third quarter of 2026.
In the Pontes phase, transactions will be processed by TARGET via DLT platforms, utilising a central bank digital currency (CBDC), or 'digital euro'. This builds upon earlier tests conducted in 2024 and aims to demonstrate how those experiments can be scaled up for broader implementation.
The Appia phase focuses on developing a long-term solution. The emphasis here is on secure and efficient global transactions, involving collaboration with both public and private entities. Opportunities to contribute to this phase will be opened up soon.
The ECB has been exploring how to strengthen the existing monetary system with a digital euro for some time. With this new plan, the central bank aims to address bottlenecks within European payment traffic, such as fragmentation, complexity, and inefficiency. Currently, cross-border payments can be cumbersome and slow, while costs continue to rise. Whether blockchain will prove to be the ultimate solution for these challenges remains to be seen in the coming years.
A key factor behind this recent price increase appears to be the liquidation of short positions. Large investors are capitalising on the outstanding 'shorts', valued at approximately $1.2 billion, which are betting on a decline in Ethereum's price. By driving the price upwards, these short positions are liquidated, triggering a 'short squeeze'. This forces investors holding short positions to buy Ethereum to limit their losses, which in turn propels the price even higher.
Furthermore, there has been a noticeable decrease in the amount of Ethereum held on trading platforms, falling from around twenty million to less than nineteen million coins over the past month. This indicates a reduced intention to sell among investors, which is generally considered a bullish signal.
Should Ethereum succeed in breaking through the $4,000 barrier, new price targets will immediately come into play. Analysts are currently setting these targets around $4,175, $4,380, and ultimately the historical peak of $4,877, which was reached in November 2021. If this latter level is achieved, it would confirm a new all-time high – a significant milestone for Ethereum.
July ending positively once again
For Bitcoin, this month began spectacularly: multiple new all-time highs have been achieved, with the current record standing at $123,000. This rally has been ongoing for longer than usual and is driven by a combination of factors. Furthermore, the Bitcoin price reached an impressive milestone last week by recording its highest ever weekly close at $119,450. This surpasses the previous record of $119,100 set earlier this month.The most dominant factor in the current Bitcoin rally is the continuous inflow in ETFs, bringing in billions of dollars in new capital. Two significant developments have contributed to this rise in recent days, primarily stemming from Trump's deals: a 'truce' has been agreed upon between the United States and China, with trade tariffs still under discussion, and a deal has been struck between the US and the EU.
Trumps Tariffs
The tariffs that Trump intended to impose on China have now been delayed by another three months; both countries will re-enter discussions about new tariffs. Currently, Trump levies tariffs of up to 51% on China, while the US faces 'only' 32.6% in additional charges. What's more, if no new deal is reached by 12th August, the tariff on Chinese goods could be increased to as much as 145%. This is, naturally, something the Chinese are keen to avoid.Despite this, the final percentages are expected to settle somewhere between 15-20%. This figure is also the outcome of the trade deal between the US and the EU. Last Monday, Trump shook hands with Ursula von der Leyen: an official agreement between both parties has been concluded. This was, of course, "the best deal ever" according to the President, but for Von der Leyen, the main priority was to minimise harm to European citizens and businesses and provide certainty.
The trade deal spanned no less than three pages: page one outlines the 15% import duty that the US is imposing on most European import goods. Furthermore, the EU has promised to purchase $750 billion worth of energy from America over the next three years, specifically oil, liquefied natural gas, nuclear fuel, and technology. This was viewed as a positive outcome by several European Commissioners, as the alternative – a total trade war – had to be avoided at all costs.
Big sale Galaxy Digital
Despite these positive developments, there was also a minor setback for Bitcoin. A single entity executed a gigantic sale of Bitcoin. Galaxy Digital, an asset management fund, had initially bought an additional 80,000 BTC this month, and then last week, moved a staggering $1.5 billion worth of Bitcoin to exchanges for sale. Many are questioning the reason behind this move; it appears that the proceeds are being used to buy back Ethereum. CEO Mike Novogratz had previously indicated that he foresaw a strong period for ETH.The effect on the market was noticeable: Bitcoin immediately dropped back to $116,000. Most analysts remain unconcerned and believe that Bitcoin will recover from this; the coin is already showing signs of rising again.
The Digital Euro is taking shape
The European Central Bank (ECB) made a significant announcement last month, outlining its plan to integrate blockchain technology into money processing. This ambitious initiative is divided into two distinct phases: the short-term 'Pontes' and the long-term 'Appia'.The immediate goal is to enable payments through Distributed Ledger Technology (DLT), essentially a decentralised database like a blockchain. The ECB is collaborating with TARGET Services, a company established by the Eurosystem to ensure the smooth flow of cash and other financial products across Europe. The initial trial period for the Pontes phase is set to commence in the third quarter of 2026.
In the Pontes phase, transactions will be processed by TARGET via DLT platforms, utilising a central bank digital currency (CBDC), or 'digital euro'. This builds upon earlier tests conducted in 2024 and aims to demonstrate how those experiments can be scaled up for broader implementation.
The Appia phase focuses on developing a long-term solution. The emphasis here is on secure and efficient global transactions, involving collaboration with both public and private entities. Opportunities to contribute to this phase will be opened up soon.
The ECB has been exploring how to strengthen the existing monetary system with a digital euro for some time. With this new plan, the central bank aims to address bottlenecks within European payment traffic, such as fragmentation, complexity, and inefficiency. Currently, cross-border payments can be cumbersome and slow, while costs continue to rise. Whether blockchain will prove to be the ultimate solution for these challenges remains to be seen in the coming years.
Ethereum's remarkable surge
Over the past month, the price of Ethereum (ETH) has seen remarkable growth, with a surge of over 55%. This impressive performance brings the cryptocurrency increasingly closer to the psychologically significant $4,000 threshold. Currently, the price hovers around $3,800, and despite a slight dip in the last 24 hours, the overall trend remains distinctly positive.A key factor behind this recent price increase appears to be the liquidation of short positions. Large investors are capitalising on the outstanding 'shorts', valued at approximately $1.2 billion, which are betting on a decline in Ethereum's price. By driving the price upwards, these short positions are liquidated, triggering a 'short squeeze'. This forces investors holding short positions to buy Ethereum to limit their losses, which in turn propels the price even higher.
Furthermore, there has been a noticeable decrease in the amount of Ethereum held on trading platforms, falling from around twenty million to less than nineteen million coins over the past month. This indicates a reduced intention to sell among investors, which is generally considered a bullish signal.
Should Ethereum succeed in breaking through the $4,000 barrier, new price targets will immediately come into play. Analysts are currently setting these targets around $4,175, $4,380, and ultimately the historical peak of $4,877, which was reached in November 2021. If this latter level is achieved, it would confirm a new all-time high – a significant milestone for Ethereum.