$118K BTC, Tariffs are Back, Grok Misalignment

Another week, another all time high.

This Week in Crypto

I mean, not really much I can say that this point. The number is up. Higher.

ETF complex posted a >$1B inflow. The pace of growth here is unprecedented:

A picture tells a thousand words, so I’ll defer to some charts, which are all rather good looking…

BTC/USD ripped to ATHs but the real fun starts when it hits ATHs vs Gold, and the Magnificent Seven:

MSTR is lagging BTC, which is unusual. It’s still firmly below ATHs. Many will be expecting this to play catchup. Saylor is not hammering the ATM here on $MSTR and is instead utilizing instruments such as $STRD to buy more $BTC without dilution. A $4.2B raise has been announced.

Coinbase is also coming up to ATHs, with it’s highest weekly close in history…

Elsewhere, the other thing to watch for is the PUMP.fun ICO starting tomorrow (July 12th). It’s currently trading at $5B on the Hyperliquid premarket. Pump has been key to Solana adoption, being the most popular application on the chain by far. They're also doing an airdrop - so check your wallets if you’ve been in the Solana trenches!

This Week in TradFi

Tariffs dominated the headlines in the U.S. this week (again):

• President Trump issued a letter late yesterday that said a 35% tariff rate on all imports from Canada would apply from August 1. 

  • The European Union is set to receive a letter sometime today.

• Trump also floated a global tariff rate of 15-20% on other countries, a notable step up from the current baseline 10% rate. 

• He also hit Brazil, who has a trade surplus with the U.S. with a 50% tariff rate - particularly focused on copper, pharmaceuticals, and semiconductor chips. 

• The dollar rose in relation to other currencies as a result.

  • The euro was 0.1% lower, and the Canadian dollar was down 0.2% in relation to the U.S. dollar. 

• Market reaction has been calmer in comparison to the mass sell-offs we saw after April 2 or “Liberation Day”, but investors are still on edge over the future of global trade - and whether the August 1 deadline is real.

On the international front:

• The UK’s economy contracted unexpectedly for a second month in a row. GDP shrank 0.1% this month after a 0.3% drop in April. 

  • The UK’s exports to the U.S., its largest export destination, surged early this year when U.S. importers tried to beat the imposition of Trump’s tariffs. However, they fell sharply in April and have not recovered - export levels are still down where they were three years ago.

  • As a result, sterling slipped today and was trading close to a more than two-week low. Expectations are higher that the Bank of England will lower borrowing costs next month.

• Germany’s debt is expected to increase to 74% of GDP by 2030, up from 62.5% last year, due to the country’s increase in spending on defense and infrastructure. 

  • The country’s parliament approved plans for a huge spending surge in March - a significant shift from decades of fiscal conservatism. 

• China’s economy is expected to have slowed down in Q2 as trade tensions with the U.S. have added to deflationary pressures - reinforcing hopes that Beijing will roll out more stimulus.

  • GDP this quarter is forecasted at 5.1% YoY, down from 5.4% in Q1.

• Gold prices increased 1% to a one-week high today as investors rushed towards safe-haven assets after Trump announced new tariffs this week.

  • Spot gold was up 1% as of this morning, its highest price since July 3, and U.S. gold futures are up 1.3%. 

This Week in Tech

AI news galore this week - some good, some bad.

Let’s start with Grok.

• Elon Musk announced last weekend that his team at xAI had made improvements to their AI chatbot Grok.

• Days later, Grok went off the rails - xAI issued a statement, blaming an “unauthorized modification” to the bot’s prompt on X.

• Maybe or maybe not related, but Linda Yaccarino, CEO of X, stepped down from her role on Wednesday after two years at the company. 

  • Yaccarino was initially brought in to maintain relationships with advertisers, but clearly it has not been an easy role. 

  • Musk simply replied on X with “Thank you for your contributions”.

Musk has also announced that Grok is coming to Tesla vehicles “very soon”. Hopefully it’s the not terrible version?

In stabler news, Perplexity launched Comet, an AI-powered web browser. 

• Comet will be available first to subscribers of Perplexity’s $200/month Max plan, as well as a small group of invitees who had signed up to the waitlist. 

• Users can also access Comet Assistant, an AI agent that lives in the web browser and aims to automate routine tasks. 

  • The company says the agent can summarize emails and calendar events, manage tabs, and navigate web pages on behalf of the user. 

As usual, below are some fundraising announcements, M&A, and tech personnel changes that caught our eye:

• LLM infrastructure startup ZeroEntropy has raised $4.2M in seed funding, led by Initialized Capital. 

• Replit announced a strategic partnership deal with Microsoft: Replit will become available through Microsoft’s enterprise cloud app store. 

• French AI startup Mistral is reportedly in talks to raise up to $1B in equity funding. 

• Midwest-based VC firm Drive Capital has returned $500M to investors in a single week, distributing almost $140M of Root Insurance shares after cashing out.

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