Bitcoin Is Absorbing Cash Coming to The Crypto

Cryptocurrency

Summary:

Bitcoin is absorbing most of the cash coming into the digital asset market. Its share in the cryptocurrency market structure increased by 10 percentage points to 65% in the first half of 2025. This is the highest it’s been since January 2021. In contrast the capitalisation of altcoins has fallen by $300 billion since the beginning of this year. Thanks to developed infrastructure, support from the White House and regulation, larger tokens are displacing smaller competitors.

The MarketVector Digital Assets 100 Small-Cap Index, which covers the bottom half of the 100 largest digital assets, initially doubled after Donald Trump’s election results in November. However, it then lost all its gains and fell by 50% in 2025. Bitcoin on the other hand, has risen by almost 14% since January and reached a new record high in May. Cryptocurrencies are benefiting from capital inflows into specialised exchange-traded funds and high global risk appetite.

The only competition for Bitcoin comes from stablecoins. The adoption by Congress of legislation regulating their circulation is increasing investor interest in this type of digital asset. In the first half of the year alone, the market capitalisation of stablecoins grew by $47 billion. Not only banks but also large companies such as Amazon are exploring opportunities for their implementation.

Bitcoin is showing little interest in restoring its correlation with US stock indices. The S&P 500 and Nasdaq Composite managed to update their record highs in June, but Bitcoin is in no hurry to do so. The link between the traditional markets and crypto was broken during the armed conflict in the Middle East. Currently the digital assets leader is cautiously watching the approach of the 9th of July, the expiry date of the White House’s 90-day tariff delay.

The escalation of trade wars will increase the risks of a pullback in US stock indices. According to Bank of America, the bubble in the US stock market continues to inflate. If it bursts, all risky assets will suffer. It is not surprising that Bitcoin is cautious. On the contrary, new records for the S&P 500 will allow bitcoin bulls to aim for a new all-time high.

Source: FxPro

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Michelle

Forex

Economic

Japanese Prime Minister Shigeru Ishiba said on Wednesday he was determined to protect his country's national interests as trade negotiations with the U.S. struggled and President Donald Trump threatened even higher tariff rates on the Asian ally.

"Japan is different from other countries as we are the largest investor in the United States, creating jobs," Ishiba said in a public debate with opposition party leaders.

"With our basic focus being on investment rather than tariffs, we'll continue to protect our national interest," he said.

Trump on Tuesday cast doubt on a possible deal with Japan, indicating that he could impose a tariff of 30% or 35% on imports from Japan - well above the 24% rate he announced on April 2 and then paused until July 9.

Japanese broadcaster TV Asahi reported on Wednesday that Japan's tariff negotiator Ryosei Akazawa was organising his eighth visit to the United States for trade talks as early as this weekend.

Source: Reuters

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Glendon

Economic

Commodity

Brent crude prices are expected to drop to the low- to mid-$60 per barrel range in the near term as traders eye an expected uptick in OPEC+ production and a seasonal slowdown in fuel demand, according to analysts at UBS.

In a note to clients, the brokerage predicted that oil markets will see a "larger surplus" after the key summer travel period, adding that prices are anticipated to move lower from current levels.

Crude prices were little moved Wednesday, as traders digested progress towards an Israel-Hamas ceasefire and a build in U.S. inventories ahead of an upcoming meeting of the Organization of the Petroleum Exporting Countries and its allies, a producer group known commonly as OPEC+.

At 03:32 ET, Brent futures inched up 0.1% to $67.16 a barrel and U.S. West Texas Intermediate crude futures were unchanged at $65.45 a barrel.

U.S. President Donald Trump on Tuesday evening said Israel had agreed to the conditions needed to finalize a 60-day ceasefire with Hamas, while also urging the Palestinian group to accept the deal.

Meanwhile, data from the American Petroleum Institute showed that U.S. oil inventories grew 0.68 million barrels in the week to June 27, a build that followed five weeks of deep, outsized draws in U.S. oil stockpiles, and raised some questions over demand during the summer.

For the nascent third quarter, the UBS analysts marginally raised their Brent price target by $3 to $65 a barrel, reflecting a "slightly higher risk premium in the very near term." A risk premium refers to the extra return investors want for holding oil investments.

However, with recent ructions in oil markets cooling following a ceasefire between Israel and Iran last month, the UBS strategists said that they expect traders’ focus will "shift back to funamentals."

"While oil demand has remained more resilient than feared and U.S. onshore activity response to lower prices has been quick, we still see the oil market moving into larger surpluses over the next three quarters," the analysts said.

They noted that this outlook was primarily linked to potential "OPEC+ production increases," predicting that all eight of its members will lift output in August. The jump in production is likely to have a greater impact on prices after the summer "as oil demand comes off seasonally, especially in the Middle East," they said.

Other factors that could impact oil prices include uncertainty around the OPEC+ production plans, the trajectory of sweeping U.S. tariffs, and the risk of a flare up in Israel-Iran tensions denting supply flows, the analysts said.

Against this backdrop, they marginally raised their annual Brent price forecast by $1 to $67 per barrel.

Source: Investing

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Michelle

Economic

Forex

The eurozone’s unemployment rate increased to 6.3% in May from 6.2% in April, according to data released by the European Union’s statistics agency Eurostat on Wednesday.

This small increase was contrary to economists’ expectations, as a consensus poll had predicted the rate would remain steady at 6.2%.

Despite the rise, the unemployment rate in the 20-nation currency area remains close to historically low levels. The April figure of 6.2% had matched the eurozone’s record-low unemployment rate.

Eurostat had previously revised March’s unemployment rate higher to 6.4%.

The slight uptick in May comes as European companies face economic uncertainty related to tariffs and geopolitical tensions.

Source: Investing

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Gerik

Economic

Mega Deals Reignite M&A Market with Focus on Private Companies

The global mergers and acquisitions (M&A) landscape is showing renewed vigor in the first half of 2025, driven by several large-scale deals targeting private firms. According to Bloomberg data, global M&A activity surged to $1.8 trillion by mid-year, representing a 20% rise compared to the same period in 2024. Over half of the year’s 10 largest deals to date involved unlisted companies, indicating a shift toward unlocking value trapped within the private sector.

Major deals include Alphabet’s $32 billion acquisition of cybersecurity startup Wiz, the merger between U.S. telecom giants Charter Communications and Cox Communications, and Constellation Energy’s takeover of Calpine. All were valued at over $30 billion, including debt. Meta Platforms also injected over $14 billion into Scale AI, a private data-labeling startup, underscoring growing investor appetite for AI and data infrastructure plays.

Deal Sizes Expand Even as Volume Slips

Data from Dealogic shows that 17,528 M&A transactions were signed globally in the first half of 2025, compared to 20,583 during the same period last year. Despite the decline in deal count, overall value increased, driven by a 62% surge in deals exceeding $10 billion. As of June 27, total M&A activity reached $2.14 trillion — a 26% increase year-on-year — with Asia contributing nearly $584 billion after doubling its regional M&A volume.

The uptrend suggests a decisive move toward fewer but more strategic acquisitions, as companies prioritize transformational growth and capital deployment over smaller, incremental transactions. Haidee Lee, global head of M&A financing at Goldman Sachs, remarked that the uptick reflects efforts to unlock massive pools of capital held in private portfolios, many of which are overdue for liquidity events.

Stability Returns as Policy Clarity Improves Under Trump’s Second Term

Much of the M&A slowdown at the start of the year was attributed to unpredictable policy moves during the early months of President Donald Trump’s second term. Market sentiment deteriorated further in April when Trump announced retaliatory global tariffs, triggering a temporary collapse in investor confidence.

However, equity markets gradually recovered as the White House softened some trade requirements, providing a more stable macroeconomic backdrop. This return of policy clarity has allowed corporate leaders and dealmakers to resume long-term growth planning. Eric Rutkoske of Guggenheim Securities noted that financial markets are responding positively now that the administration’s trade and tax strategies are more clearly defined.

Sectoral Hotspots: Software, Health Tech, and Data Infrastructure

Dealmakers are particularly active in sectors less vulnerable to geopolitical shocks and economic volatility. According to David Kamo of Evercore, areas such as enterprise software, digital healthcare, and data center infrastructure are seeing increased M&A activity. These segments offer resilient growth potential and align with long-term investment themes such as digital transformation, AI adoption, and decentralized computing.

Buyers are also seeking diversification, with cross-border and cross-sector deals on the rise. The strategic rationale for recent transactions points not only to revenue expansion but also to acquiring technical capabilities, intellectual property, and access to specialized talent.

Cautious Optimism for M&A Through Late 2025

The sharp rebound in M&A activity during Q2 2025 has improved market confidence, with many expecting continued strength into the second half of the year. As inflation remains moderate and financial conditions favorable, the M&A outlook appears constructive, provided geopolitical and macroeconomic uncertainties remain contained.

While challenges remain—particularly related to regulatory oversight and cross-border deal risks—the appetite for strategic expansion is clearly returning. If current trends persist, 2025 may close as one of the strongest M&A years since the pandemic era, powered by high-value deals and a growing alignment between capital supply and long-term innovation demand.

Source: Reuters

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FxPro

Technical Analysis

The US dollar is retreating on all fronts, showing a daily decline since last Monday, when the military conflict between Israel and Iran came out of its hot phase and the tax bill in the US returned to the forefront.

Resuming its decline, interrupted by the bombing between Israel and Iran, the dollar index has been updating its more than three-year lows on a daily basis since the second half of last week. With total losses of over 12%, the first half of the year was the worst for the US currency since 1973, i.e. in the entire history of the free forex market.

A more neutral geopolitical background removed the ‘war premium’ from the dollar’s price and brought back the focus on Trump’s pressure on Powell and the discussion of Trump’s bill. This ‘One Big and Beautiful Bill’ promises to create a 7% budget deficit. The situation is not as serious as it was in September 2022 in Britain, but it is moving in the same direction.

However, we still see more influence in the changing mood of market participants, where expectations of a rate cut are growing. Markets are pricing in a 65% chance that there will be at least three cuts by the end of the year, almost double the figure a month ago.

On weekly timeframes, the RSI index has been updating its lows since early 2018, indicating an aggressive decline over the past seven years. This has dashed hopes for a bottoming out and rebound earlier this year.

The technical picture indicates the potential for the dollar to decline by another 7-8% to the 88-90 range on the DXY from the current 96.6. However, this is a rare case where the situation is in the hands of politicians. We turn our attention to representatives of the US Treasury and the Fed with comments on maintaining a strong dollar policy. Strong macroeconomic employment data this week may halt the dollar sell-off, but this is unlikely during a period of economic slowdown.

Source: FxPro

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Gerik

Economic

Escalating Tariff Risks Could Backfire on the U.S. Economy

A recent report from the Bank of Korea (BoK)’s New York office warns that the United States stands to bear the greatest economic cost should current tariff negotiations with major trading partners fail. The analysis, published under the title "U.S. Economic Outlook and Key Issues for H2 2025," points to the country's growing trade dependence as a critical vulnerability.

Contrary to its historical posture as a less trade-dependent economy, the U.S. now exhibits twice the level of trade reliance compared to the 1930s Smoot-Hawley tariff era. The report cautions that retaliatory tariffs from trading partners could disproportionately harm the U.S. economy, especially in the event of a 25% average tariff increase proposed by the Trump administration.

Quantifying the Asymmetry in Economic Exposure

In 2023, U.S. exports accounted for approximately 7% of its GDP. By contrast, the proportion of GDP dependent on exports to the U.S. was only 3.1% for the European Union and 2.9% for China. These figures suggest that if a wave of retaliatory tariffs were enacted, the damage to the U.S. economy could be more severe than the impact on its trading partners.

Using this ratio-based comparison, the BoK notes that nearly 7% of U.S. economic output could be exposed to foreign countermeasures, while the reciprocal exposure for the EU and China remains notably smaller. This economic imbalance underscores why the U.S. might find itself more economically vulnerable than its trading counterparts in a tit-for-tat tariff war.

Policy Uncertainty as a Drag on Growth and Investment

The warning from BoK comes amid a 90-day suspension of tariff enforcement announced on April 2, with the temporary halt set to expire on July 8. The U.S. administration is currently engaged in bilateral negotiations to avoid a full-scale trade escalation, but the report signals growing concern that the final tariff rates may still remain high.

Market analysts expect that any eventual tariff implementation could be less aggressive than President Trump’s initial proposal. However, the risk remains that if talks fail, markets could face a dual shock—first from weakened global demand, and second from a sharp repricing of financial assets, particularly in sectors sensitive to trade and inflation.

Asset Markets at Risk Amid Recession and Inflation Scenarios

The BoK report goes further to warn that failure in trade negotiations—combined with the onset of recessionary pressures or a rise in inflation—could result in swift downward adjustments in asset prices. This warning implies that financial markets are likely underestimating the potential spillover effects of a deteriorating trade environment.

The twin threats of slower economic growth and higher inflation, catalyzed by tariff hikes, could lead to tighter financial conditions, reduced consumer confidence, and heightened volatility in equity and bond markets. Investors are being advised to monitor the July 8 outcome closely, as it may determine the trajectory of U.S. asset pricing in the second half of the year.

A High-Stakes Test for U.S. Trade Strategy

While the U.S. seeks to pressure its trading partners into more favorable terms, the economic calculus presented by the Bank of Korea suggests that Washington may face the steepest costs if talks collapse. With its high export-to-GDP ratio and sensitivity to retaliatory tariffs, the U.S. could find its financial markets and broader economy disproportionately affected.

As the deadline approaches, the ability of policymakers to reach negotiated outcomes will be crucial not only to global trade stability but also to domestic financial resilience. The path forward demands strategic compromise, as the margin for unilateral escalation grows increasingly narrow.