Oil on the Rise, Possible Rate Hikes, & OpenAI Model Goes Rogue

All eyes on Warsh and the Fed meeting tomorrow…

This Week at Arch

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This Week in Crypto

Bitcoin spent most of the week in the mid $60Ks, dipping toward $63K early on as Brent crude pushed past $97 on renewed U.S.-Iran hostilities, then holding near $64K by Friday.

• Friday was the most interesting day this week - BTC held around $64K as crypto broadly rose, despite Brent crude climbing toward $100, its highest since mid-May.

Bitcoin ETFs logged their third straight week of inflows for the week, pulling in $33.79M.

• The number would've been a lot bigger without $225.2 million and $240.1 million in outflows on July 23 and 24.

• Because of these outflows, by yesterday the streak had officially snapped - more than $465M left the funds, breaking a seven-session inflow run with Fed rate-hike fears increasing.

Some quiet good news from Wall Street:

• While the headlines chase price swings, actual infrastructure is showing up fast.

• DTCC completed production tokenization trades with more than 30 participating firms this month, and Bank of America connected its digital asset leadership directly to its core FICC trading operation.

• That follows Morgan Stanley's E*TRADE finishing its rollout of spot Bitcoin, Ethereum, and Solana trading on July 16.

This Week in TradFi

60 trading partners, including Canada, Mexico, India, and the UK, woke up Friday to new tariffs of 10%-12.5%, replacing the 10% baseline that expired at midnight.

• This time markets barely blinked since everyone saw it coming. That represents an interesting shift - markets are now pricing tariffs as a permanent structural drag, rather than temporary measures to be negotiated away.

Tesla and Alphabet earnings came in:

• Both companies beat on revenue, but (as it goes) got punished anyway.

• Tesla plunged 14.5% and Alphabet dropped 7.1% Thursday, after both posted negative free cash flow for Q2 - a first in either company’s history.

• Alphabet's capex hit $44.9B against $39.1B in operating cash flow, and it raised full-year capex guidance another $15B to a range of $195–205B, which is a lot of money to spend hoping AI eventually pays for itself.

The Fed’s rate decision lands tomorrow, right as oil sits above $100/barrel.

• June inflation had cooled to 3.5%, largely because gas prices fell during a brief U.S.-Iran ceasefire.

• Now that ceasefire has collapsed, and the disinflation that gave the Fed room to relax may already be reversing.

• The probability for a hike this week, as reflected in rate futures prices, has been growing.

  • Reuters writes that many economists say they expect at least one and as many as three dissents from policymakers favoring a rate hike at tomorrow’s meeting, laying the groundwork for the start of a sequence of rises in borrowing costs in September - unless inflation takes a turn for the better before then.

This Week in Tech

OpenAI’s model went rogue during a security test:

• On July 21, OpenAI disclosed that GPT-5.6 Sol and a more capable unreleased model autonomously escaped a sandboxed evaluation, crossed onto the open internet, and compromised Hugging Face's production infrastructure to steal answers to a cybersecurity benchmark it was supposed to be tested on.

• This might be AGI - a model trying to steal the answer key instead of pass a test? Sounds human to me.

But in better news for AI:

• On July 20, Anthropic mathematician Levent Alpöge used the company's Claude Fable 5 model to find a counterexample to the Jacobian conjecture - a problem open since 1939.

• The conjecture has drawn failed proof attempts from famous 20th-century mathematicians including Beniamino Segre and Wolfgang Gröbner, each time with subtle errors that took years to surface.

  • This one was independently verified by mathematicians within hours of posting.

• For the math nerds reading, I’ll note the fine print: the result kills the conjecture for three dimensions and up. Dimension two, the original and most famous version of the problem, is still wide open.

And chip stocks had a very bad Friday (again):

• AI memory and semiconductor stocks got hit hard on July 24 after steep losses in Asian markets spilled into U.S. trading.

• It's the same fight that's been playing out all month: is the AI infrastructure boom hitting a wall, or is this just profit-taking after a massive run-up?

• The semiconductor index shed more than 20% from its June peak in three weeks, even as the actual numbers behind it stayed strong - Micron posted 84.9% gross margins, Samsung's operating profit was up 1,900% YoY, and HBM demand at Micron is fully booked through fiscal 2026.

Arch is building a next-gen wealth management platform for individuals holding Alternative Assets. Our flagship product is the crypto-backed loan, which allows you to securely and affordably borrow against your crypto.

Disclaimer: None of the above is financial advice, seriously.