Bitcoin traded around $64,000 on Thursday, holding narrow gains as Wall Street embraced a revival in the artificial intelligence trade following Microsoft's stronger-than-expected quarterly results. The largest cryptocurrency briefly topped $65,000 during the U.S. session, up 0.8% on the day, while the Nasdaq climbed more than 2%. Microsoft, a $3 trillion company, was on track for its biggest one-day advance since the pandemic-era rally, surging 15% after reporting robust cloud growth and disciplined capital spending.
That was the exact reassurances markets needed after Alphabet's results last week spooked investors. Microsoft showed its AI investments are producing returns without requiring an even bigger bill. Its cloud unit expanded at the fastest pace in four years, easing concerns that the enormous spending on data centers and AI infrastructure would swallow profits. The ripple effect was immediate: chipmakers and AI infrastructure names reversed multi-day losses, with Micron, SanDisk, Applied Materials, AMD, and Intel all gaining double digits in early trading.
Bitcoin Tracks Risk Sentiment
Bitcoin has increasingly traded like a risk asset, moving with the chip and AI complex rather than in response to crypto-specific headlines. Thursday's price action was a clear example. As stocks rallied, bitcoin pushed upward, but did not participate with the same intensity as high-beta tech shares. The modest move suggests hot money is still concentrated in AI equities and has yet to rotate aggressively back into digital assets.
Crypto markets also had to digest a continued rise in long-term Treasury yields. The real, or inflation-adjusted, yield on the 30-year U.S. Treasury bond climbed to nearly 3% for the first time since 2008. That is a powerful headwind for zero-yielding assets like gold and bitcoin, because investors can lock in a guaranteed return above inflation for three decades. If real yields keep climbing, bitcoin could face pressure despite the encouraging stock market tone.
Apple's Earnings Beat Leaves Shares Lower
Apple reported fiscal third-quarter earnings that topped Wall Street forecasts, but shares fell 2.5% in after-hours trading. The company posted EPS of $2.02 versus the $1.89 expected, and revenue of $109.4 billion against forecasts for $108.7 billion. Gross margins came in at 50.1%, well above company guidance of around 48%. Part of the beat was attributed to tariff refunds, which raised the quality of the earnings slightly.
The muted reaction likely reflects how far Apple has already run in recent weeks. The stock rose about 15% month-over-month and traded near a record high, making the post-earnings selloff a classic sell-the-news response despite the beat.
Strategy Books $8.2 Billion Loss on Bitcoin
Strategy, the world's largest corporate bitcoin holder, reported an $8.2 billion second-quarter net loss, driven almost entirely by an $8.32 billion unrealized markdown on its bitcoin holdings under fair-value accounting. The company held 843,775 bitcoin as of July 26, up 25% from the start of the year. At current prices, the stash is worth roughly $54.8 billion, compared with an acquisition cost of $63.7 billion.
Investors barely reacted to the loss because it had already been priced in. The report comes amid growing scrutiny over Strategy's complex capital structure, which includes multiple classes of preferred stock, common equity, and convertible debt. The company raised $17.06 billion through at-the-market stock offerings this year, repurchased $1.5 billion of convertible notes at an 8% discount, and expanded its U.S. dollar reserve to $3.75 billion. CFO Andrew Kang said that reserve covers preferred dividend payments and interest obligations for more than 2.1 years.
Perhaps more notably, Strategy sold about $218.4 million worth of bitcoin under its new BTC Monetization Program to shore up cash and help fund preferred stock dividends, departing from its long-standing strategy of accumulating bitcoin without selling. Executive Chairman Michael Saylor said the company remains focused on expanding its Digital Credit business despite weaker bitcoin prices. Strategy also established a $1 billion share repurchase program for its common stock and separately repurchased about $25 million of its STRC preferred shares at a discount below par.
Coinbase Disappoints With Lower Revenue
Coinbase shares fell roughly 5% in after-hours trading after the crypto exchange reported second-quarter revenue of $1.22 billion, below the $1.29 billion consensus. Transaction revenue was $599 million versus the $628 million expected, while subscription and services revenue totaled $555 million against estimates of $599 million. The shortfall reflects a tough quarter for crypto markets: bitcoin fell about 14% during Q2, ether lost roughly 25%, and industry spot trading volumes declined more than 20%.
CEO Brian Armstrong pointed to areas of strength, noting that Coinbase reached a record 10.3% share of global crypto trading volume during the quarter. He highlighted stablecoins, Base, and prediction markets as growing businesses beyond spot trading. CFO Alesia Haas was more cautious, saying total revenue declined 14% quarter-over-quarter as the crypto market capitalization fell by double digits. Wall Street had been trimming estimates ahead of the print, but the actual results still came in light. Investors are watching whether Coinbase can reduce its reliance on transaction fees through subscription revenue from USDC interest income, staking, custody, and institutional services.
Amazon Books Massive Anthropic Gain
Amazon delivered a blowout second quarter, reporting EPS of $5.75 against expectations of just $1.81. The number included a $53.4 billion gain on its investments in AI company Anthropic. Revenue of $200.6 billion beat the $195.6 billion forecast, and third-quarter guidance also came in ahead of consensus. Shares rose 6% in after-hours trading as investors celebrated both the AI windfall and the strength in Amazon's core retail and cloud businesses.
Washington and Regulatory News
Treasury Secretary Bessent took to X to urge the Senate to pass the Clarity Act, accusing Senate Democrats of choosing politics on the cusp of a major victory for American leadership. He dismissed claims that the legislation lacks consumer safeguards or fails to address illicit finance, saying nothing could be further from the truth. He closed with a stark warning: America will lead or America won't. The crypto industry is closely watching the bill, which could provide the regulatory clarity many companies have been seeking.
Separately, Intercontinental Exchange CEO Jeffrey Sprecher said during the company's second-quarter earnings call that significant entities could move on-chain by late 2026 or early 2027 as the NYSE parent works with the SEC to tokenize listed securities. Sprecher noted that blockchain cannot replace the NYSE's matching engine, but could enable round-the-clock settlement, collateral transfers, and lending. ICE made a strategic investment and partnered with OKX in March to distribute tokenized NYSE products.
AI Fund Blowup and Data Center Rebound
The AI trade continues to experience violent swings. Leopold Aschenbrenner's Situational Awareness fund, once a symbol of the AI bull market, has reportedly sold all of its public investments in one enormous block trade, according to a report citing people familiar with the matter. Both its long and short positions were sold to another single fund. The fund had suffered large losses on longs such as SK Hynix, SanDisk, Micron, and CoreWeave, while also losing on short positions in software companies like Adobe.
Ken Griffin's Citadel purchased a large portion of Situational Awareness' public stock portfolio, according to people familiar with the matter. The AI-focused investment firm had been seeking buyers while attempting to raise fresh capital after suffering steep losses on AI investments once valued at about $20 billion. Despite the sale, Situational Awareness continues to hold its private company investments, including its stake in Anthropic.
The unwind gave a green light to investors to re-enter popular AI names. Former bitcoin miners turned AI data center players such as IREN, Hut 8, Cipher Mining, and Keel Infrastructure jumped 18%-28% after suffering crushing declines earlier in the week. Other crypto mining and AI infrastructure names, including MARA Holdings, Riot Platforms, CleanSpark, and Bitdeer, were also up about 20%. Galaxy Digital, which has major data-center investments, gained 15.5%.
Macro Data and Central Banks
Economic data on Thursday offered a cautiously positive picture. The core Personal Consumption Expenditures Price Index rose just 0.1% in June, better than the 0.2% forecast and down from 0.3% in May. Year-over-year core PCE inflation was 3.3%, in line with expectations and down from 3.4%. However, macro strategists noted that the supercore measure, stripping out food, energy, housing, and utilities, remained close to 4% year-over-year. That could keep the Federal Reserve on track for a September rate hike, with CME FedWatch showing roughly 60% odds of a 25-basis-point hike.
The preliminary estimate for annualized second-quarter GDP growth was just 1.5%, well below the 2.1% forecast. Initial jobless claims rose to 197,000 from 188,000, still a very low level. Bond yields moved modestly higher as investors digested the Fed's decision to hold rates and Chairman Kevin Warsh's post-meeting comments.
The Bank of England kept its benchmark rate at 3.75%, with a 6-3 vote. The three dissenters wanted an increase to 4%. The bank cited faster-than-expected inflation cooling to 2.6%, but forecast inflation will rise later in the year due to high energy prices tied to Middle East conflict.
Meanwhile, the dollar index slid to 100.67, extending Wednesday's 0.6% drop to the lowest level in years. That weaker dollar supports bitcoin's bullish case, though higher long-term yields remain a caution. The yen also surged suddenly against the dollar, suggesting possible intervention by Japanese authorities. A sharp yen move can trigger an unwind of carry trades, which historically has caused unsettling selloffs in popular assets like bitcoin, as seen in August 2024.
DeFi and Derivatives Updates
In decentralized finance, Aave is considering leaving six blockchains — Sonic, Scroll, zkSync, Metis, Soneium, and Aptos — after revenue from those deployments fell below support costs. The governance proposal covers $98.1 million of supplied assets and $15.6 million of debt across Aave, with the six proposed closures accounting for $12.8 million and $4.1 million, respectively. Deposits on Sonic fell 74% over six months to $7.6 million, and Scroll deposits dropped 86% to $2.2 million. Aave would freeze new activity, reduce supply and borrowing caps, and raise interest rates to encourage users to exit the networks, each of which generates less than $5,000 in protocol revenue.
DRW founder Don Wilson continued his campaign for regulating perpetual futures like futures rather than swaps. Wilson traced the issue back to the aftermath of the Enron collapse and the Dodd-Frank Act, arguing regulators have long confused legal labels with actual market risk. He cited examples of exchanges reclassifying centrally cleared swaps as futures without changing how the products worked. His point: regulation should follow economic substance and risk, not terminology.
Source: Coindesk News