Crypto Stocks Gain as Bitcoin Trades Near Its All-Time High

Key Points

• Inflation Update: Core inflation, excluding food and energy, rose 0.3% month-over-month in July, the largest increase in six months, with annual core prices up 3.1% from 2.9% in June.**
• Headline CPI: The Consumer Price Index increased 2.7% annually in July, matching June's rate but below the expected 2.8%, with a month-over-month rise of 0.2%.**
• Tariff Impact: Evidence of tariff-related price increases emerged, notably in footwear (up 1.4%), though not yet at alarming levels, amid a US effective tariff rate of 18.6%, the highest since 1933.**
• Federal Reserve Outlook: Despite sticky inflation, the report supports a potential Fed rate cut in September, with a 90% probability of a 0.25% cut, though future cuts may face complications from tariff-induced inflation.**
• Market Reaction: Stocks rose post-report, and the 10-year Treasury yield stayed below 4.3%, reflecting market optimism for Fed rate cuts.**

Summary

Inflation remained persistent in July, with core inflation (excluding food and energy) rising 0.3% month-over-month, the highest in six months, and 3.1% year-over-year, up from 2.9% in June, per the Bureau of Labor Statistics. Headline CPI held steady at a 2.7% annual increase, below the expected 2.8%, with a 0.2% monthly rise driven by lower gasoline and softer food prices. Specific categories like footwear (up 1.4%), furniture, and airline fares saw notable increases, hinting at tariff-related cost pass-through as the US effective tariff rate hits 18.6%, the highest since 1933. Despite sticky inflation, experts like Seema Shah from Principal Asset Management believe the data won't deter the Federal Reserve from a potential rate cut in September, with investors now estimating a 90% chance of a 0.25% cut. However, future inflationary pressures from tariffs could complicate later rate decisions. Markets reacted positively, with stocks rising and the 10-year Treasury yield below 4.3%, reflecting optimism for monetary easing. The report underscores ongoing trade policy impacts and raises questions about the Fed's balancing act between inflation control and economic growth.

Key Points

• Circle Internet Group (NYSE: CRCL) announced the launch of Arc, a new open layer-1, stablecoin-centric blockchain, on August 12, 2025.
• Arc, an Ethereum Virtual Machine (EVM)-compatible network, uses USDC as its native gas token and is designed for stablecoin payments and capital markets applications.
• Circle reported a 53% year-over-year revenue surge in Q2 2025, totaling $658 million, alongside a 52% increase in adjusted EBITDA to $126 million.
• Despite a net loss of $482 million due to non-cash charges related to its IPO, Circle's stock rose 6.5% in pre-market trading, reaching $172.01.
• The public testnet for Arc is expected to launch this fall, with full integration across Circle’s platform and interoperability with partner blockchains.

Summary

Circle Internet Group (NYSE: CRCL), the company behind the USDC stablecoin, unveiled Arc, a new layer-1 blockchain focused on stablecoin applications, on August 12, 2025. Arc, compatible with the Ethereum Virtual Machine, uses USDC as its native gas token and aims to support enterprise-grade stablecoin payments and capital markets solutions. A public testnet is slated for this fall, with full integration into Circle’s platform and interoperability with numerous partner blockchains. Alongside this launch, Circle reported impressive Q2 2025 earnings, with a 53% year-over-year revenue increase to $658 million and a 52% rise in adjusted EBITDA to $126 million. However, a net loss of $482 million was recorded due to non-cash charges tied to its recent IPO. Following its public debut on the NYSE in June 2025, Circle’s stock surged 6.5% in pre-market trading to $172.01. CEO Jeremy Allaire highlighted the company’s sustained growth and adoption across diverse use cases. With a market cap of $65 billion, Circle holds a significant 24% share of the stablecoin market since its founding in 2013.

Key Points

• Do Kwon, co-founder of Terraform Labs, plans to plead guilty to two charges of conspiracy to defraud and wire fraud in a U.S. court.
• Kwon is accused of misleading investors about TerraUSD, a stablecoin, by falsely claiming a computer algorithm restored its value in 2021, when he allegedly manipulated its price.
• The collapse of TerraUSD and Luna in 2022 resulted in an estimated loss of $40 billion for investors.
• Kwon agreed to a $4.55 billion settlement with the SEC in 2024, including an $80 million civil fine and a ban from crypto transactions.
• He has been detained since his extradition from Montenegro and is among several crypto moguls facing federal charges after the 2022 digital token slump.

Summary

Do Kwon, the South Korean cryptocurrency entrepreneur behind Terraform Labs, is set to plead guilty to charges of conspiracy to defraud and wire fraud in a U.S. court. Kwon, who developed the TerraUSD stablecoin and Luna token, is accused of misleading investors by falsely claiming a computer algorithm stabilized TerraUSD’s value in 2021, when he allegedly orchestrated secret purchases to prop up its price. This deception contributed to the $40 billion collapse of both currencies in 2022, impacting retail and institutional investors. Initially pleading not guilty to a nine-count indictment, Kwon now faces sentencing following his plea. In 2024, he settled with the SEC for $4.55 billion, including an $80 million fine and a crypto transaction ban. Detained since his extradition from Montenegro, Kwon is among several crypto figures charged amid the 2022 digital token market crash.