7.2 AI Daily Report on the dynamics of the encryption asset market and new regulatory trends

1. Headlines

1. The Securities and Exchange Commission approved the Grayscale Digital Large Cap Fund to list ETFs on NYSE Arca.

The Securities and Exchange Commission approved the conversion of the Grayscale Digital Large Cap Fund into a spot ETF, allowing it to trade on NYSE Arca. This is the first approved cryptocurrency spot ETF in the United States, marking the formal entry of crypto asset investment tools into the mainstream financial market.

The ETF will track the performance of major cryptocurrencies such as Bitcoin, Ethereum, Solana, XRP, Cardano, and provide investors with a one-stop investment portfolio. The approval process took several years, reflecting the increasing importance and acceptance of crypto assets by regulators.

This move will provide more channels for institutional and retail investors to participate in the cryptocurrency market, which is expected to drive capital inflows and promote industry development. It also means that cryptocurrency assets will be subject to stricter regulation, requiring higher transparency and compliance standards. In the long run, this will facilitate the integration of cryptocurrency assets with the traditional financial system and enhance their status as an alternative investment tool.

2. The South Korean government and financial regulators are conducting a joint review of the issuance of the Korean won stablecoin.

The South Korean President's Policy Planning Committee recently held a meeting with financial regulatory agencies to discuss the issuance conditions and regulatory framework for stablecoins denominated in Korean won. This indicates that the South Korean government is accelerating the development of its national digital currency.

The meeting focused on key issues such as the capital requirements for issuers. Regulatory authorities emphasized the need to establish clearer issuance standards to restrict the entry of small cryptocurrency companies that lack sufficient funding, thereby maintaining market stability.

Once the Korean won stablecoin is issued, it will provide more convenient cross-border payment and settlement channels for Korean enterprises and consumers, helping to enhance the status of the Korean won in international trade. At the same time, it will intensify competition with other major economies in the field of digital currency, and who can seize the opportunity will determine future discourse power.

The South Korean government's move reflects its emphasis on the development prospects of digital currencies, but it also needs to balance innovation and risk, and formulate practical regulatory policies.

3. Bella Protocol launches on-chain AI interactive new game Token Yugijo

On July 1st, Bella Protocol launched its first on-chain AI interactive mini-game Token Yugijo on the Optimism network. The game provides verifiable random numbers through ARPA Randcast, ensuring that the results of each coin toss are fair and transparent.

Users do not need to hold ETH in their wallets to use USDC for deposits, withdrawals, and gaming operations through the EIP-712 signature mechanism, providing a truly gas-free blockchain gaming experience. Token Yugijo not only features simple gameplay but also introduces an AI interaction mechanism.

The in-game animation assistant Ms. Bunny Flipton will provide personalized suggestions and fun tips based on the user's historical performance and behavior patterns, adding a human touch to every flip. The innovative Bet Stash mechanism further ensures the safety of user assets.

The launch of Token Yugijo showcases the innovative application prospects of the combination of AI and blockchain technology. The gamified experience helps attract more users to the crypto world, while AI assistants inject intelligent elements into on-chain applications, opening up new development directions.

4. MyShell AI-generated videos have exceeded 210,000 views per single play, becoming a leader in the AI content entertainment sector.

According to data from Xiaohongshu, the AI content creator Flux girl used the AI content generation agent on the MyShell platform to create short videos themed around Labubu. Within a week of going live, a single video had over 210,000 views. The creator mentioned that there were thousands of inquiries about AI content creation tools, and many rushed to register and use MyShell.

Previously, MyShell integrated the latest video model Veo at the first opportunity, and community developers built several Labubu-themed multimodal AI agents based on this model, quickly dominating the Google global search rankings at number one, with a daily active user growth of over 30 times.

The rise of AI content generation technology has provided creators with new forms of expression and lowered the barriers to content production. MyShell, leveraging advanced AI models, has successfully attracted a large number of user关注, becoming a leader in the AI content entertainment space.

In the future, AI may become an important assistant for content creation, but it still requires the creativity and control of creators to maximize its effectiveness through the combination of human and machine. At the same time, it is also necessary to address legal issues such as copyright and review regarding AI-generated content.

5. Musk praises Trump for resolving global conflicts, stating "praise where it’s due"

On July 2, Musk retweeted Trump's post about facilitating a ceasefire agreement in Israel, praising Trump for successfully resolving several serious conflicts around the world, saying, "Praise where praise is due."

Trump stated on social media that the US and Israel had long discussions on the situation in the Gaza Strip that day, and Israel agreed to the necessary conditions for a 60-day ceasefire agreement, with Qatar and Egypt submitting the final text of the agreement.

Musk's statement has sparked heated discussions. Supporters believe that Musk, as a business leader, should objectively evaluate the achievements of political figures; opponents criticize Musk for interfering in politics, which goes against his entrepreneurial philosophy.

Nevertheless, this interaction has once again put Musk at the center of public opinion. As the helmsman of Tesla and Twitter, every move Musk makes is under close scrutiny. Whether he will further involve himself in the political arena remains to be seen.

2. Industry News

1. Bitcoin breaks through the $107,000 mark, continuing the oscillating upward pattern.

Bitcoin has seen a mild rebound in the past 24 hours, reaching a high of $108,280, currently reported at $107,571, with an increase of about 0.6%. Overall, it shows a fluctuating upward trend, with a slight increase in trading volume.

Macroeconomic favorable factors support Bitcoin's upward momentum. U.S. Treasury yields have slightly retreated, the U.S. dollar index has weakened, and market expectations for a Federal Reserve rate cut in September have once again intensified. Geopolitical risks have eased, and risk aversion sentiment has significantly weakened, providing support for risk assets.

On the policy level, the US SEC is promoting the simplification of the cryptocurrency ETF filing process, and the stablecoin regulatory bill is accelerating the legislative process, bringing structural benefits to the market. Platforms like Coinbase benefit significantly, USDC gains policy trust, while Tether faces higher compliance pressure.

On-chain data shows that the BTC balance on exchanges continues to decline, while long-term investors are steadily accumulating. Analysts believe that the decrease in Bitcoin's volatility and its decoupling from U.S. stocks are increasing its appeal for institutional allocation as a new asset class. However, caution is still needed for the risk of a pullback in the short term.

2. Ethereum net inflow exceeds $1.6 billion, can ETH continue its upward momentum?

Ethereum has experienced a continuous net inflow of institutional funds over the past seven weeks, totaling $1.6 billion. This trend reflects a renewed confidence among investors in Ethereum, attracting large funds looking for investment opportunities without the need to manage private keys.

Driven by capital inflows, the price of ETH has risen from around $2200 to near $2500. Analysts believe that with the upcoming upgrades and improvements in scalability, Ethereum still has further growth potential.

However, yesterday the ETH ETF saw a net outflow of 14.1 million USD, reflecting a conservative short-term allocation of funds towards Ethereum in the market. Altcoins overall declined, lacking a collective narrative.

The Fear and Greed Index today reports a temporary score of 46, with market sentiment remaining in a neutral range. According to Mart X Insight, the current sentiment in the crypto market is extremely optimistic, with a 24-hour market sentiment index of +1.02; however, the market warning signals are extremely high, as the social anomalies and sentiment polarization of the top ten cryptocurrencies both reach 100%. Investors need to be cautious of the risk of increased volatility in the future.

3. Solana suffers a heavy setback, can the first SOL ETF reverse the decline?

Solana has suffered a sharp decline, dropping 7.84% in the last 24 hours, now priced at $145.08. This decline comes just before the U.S. plans to launch its first Solana spot ETF on July 2.

The ETF is named REX-Osprey SOL + Staking ETF, which not only provides direct exposure to Solana but also offers staking rewards. This development has sparked excitement and caution among investors.

Analysts point out that although the launch of new ETFs may bring short-term benefits, the long-term development of the Solana ecosystem still requires continuous innovation and user growth. Currently, Solana still faces challenges in terms of scalability and decentralization.

Investors need to closely monitor the development trends of the Solana ecosystem and carefully assess risks and opportunities. At the same time, the launch of new ETFs will further test the regulatory authorities' attitude towards cryptocurrency derivatives.

4. Shiba Inu coin burn rate drops to 0%, can DOGE regain its upward momentum?

Shiba Inu's chief developer Shytoshi Kusama hinted at an important announcement and AI-related plans to be released in July, pushing Shiba Inu into the next stage of development.

However, the burn rate of Shiba Inu Coin has currently dropped to 0%, raising concerns in the community about its future development. Analysts believe that Shiba Inu Coin needs continuous innovation and expansion of use cases to regain momentum.

Previously, Shiba Inu Coin experienced a surge due to social media influence and NFT integration. However, as the initial hype subsided, Shiba Inu Coin faces the challenge of proving its long-term value.

Investors need to closely monitor the movements of the Shiba Inu team, assessing whether their development strategy can attract new user groups and promote ecosystem construction. At the same time, they should also be wary of the speculative risks associated with popular altcoins like Dogecoin.

5. The XRP community calls for a 1000% price increase, with the lawsuit outcome potentially being key.

As the lawsuit between Ripple and the SEC nears its end, the XRP community has been calling for a 1000% increase in the price of XRP. This comes after Ripple CEO Brad Garlinghouse symbolically reaffirmed his support for XRP.

Analysts believe that if the lawsuit outcome is favorable for Ripple, it could indeed trigger a significant increase in XRP's price. After all, this would provide regulatory clarity for XRP and expand its application prospects in the institutional sector.

However, some analysts are cautiously optimistic about the excessive optimism. They believe that even if the lawsuit results are favorable, it will still take time to test whether the XRP price can achieve a 1000% increase.

Regardless, the future trend of XRP will be greatly influenced by regulatory policies. Investors need to closely monitor the latest developments in the lawsuit and carefully assess risks and opportunities.

3. Project Highlights

1. Sui Network launched the SuiPlay gaming platform to accelerate the development of the Move ecosystem.

Sui Network is an emerging Layer 1 blockchain project developed by Mysten Labs, utilizing the Move programming language. Recently, Sui launched the SuiPlay gaming platform, aimed at bringing more innovative applications to the Move ecosystem.

SuiPlay is a platform for game developers that provides a range of tools and resources to help developers build gaming applications on the Sui network. The platform supports various game types, including NFT games, DeFi games, and more. Developers can leverage Sui's high performance and low-cost advantages to create outstanding gaming experiences.

This initiative reflects Sui Network's emphasis on the development of the Move ecosystem. Move is a resource-oriented programming language initially developed by Meta and has now emerged as a new programming language in the blockchain field. Sui Network hopes to attract more developers to join the Move camp through SuiPlay and promote the prosperity of the Move ecosystem.

Industry insiders believe that the launch of SuiPlay will further enhance the competitiveness of the Sui Network. As an emerging project, Sui needs to continuously introduce innovative applications to attract developers and users. Gaming is an important application scenario in the blockchain field, and SuiPlay can help the Sui Network gain a foothold in this area.

At the same time, SuiPlay injects new momentum into the development of the Move programming language. The Move language has advantages such as high security and fine resource control, but its ecosystem is currently relatively weak. The launch of SuiPlay will attract more developers to learn and use the Move language, which is beneficial for the growth of the Move ecosystem.

2. Aptos launched the Aptos Incentivized Testnet to encourage community participation in testing.

Aptos is an emerging Layer 1 blockchain project created by former employees of Meta. Recently, Aptos launched the Aptos Incentivized Testnet(AIT), aimed at encouraging community participation in testing to enhance the network's security and stability.

AIT is an incentivized testing network where participants can earn token rewards by performing various tasks. These tasks include running nodes, sending transactions, discovering vulnerabilities, etc. Aptos hopes to attract more community members to participate in testing and to identify and fix potential issues through this approach.

This initiative reflects Aptos's emphasis on community building. As an emerging project, Aptos needs broad community support and participation to sustain its development. Through AIT, Aptos can not only improve network quality but also enhance community cohesion, laying a foundation for future development.

Industry insiders believe that AIT is an innovative approach that can effectively incentivize community participation in testing. Compared to traditional bug bounty programs, AIT offers a more diverse range of tasks with broader coverage. At the same time, the token rewards are also more attractive, which is beneficial for attracting more participants.

However, some analysts have raised concerns. They worry that excessive reliance on token incentives may lead to a speculative mentality among community participants, affecting the quality and effectiveness of the testing. Therefore, Aptos needs to seek a balance between token incentives and community autonomy to ensure the fairness and validity of the testing.

3. Gensyn launches AI-driven smart contract development platform

Gensyn is a startup focused on artificial intelligence and blockchain technology. Recently, the company launched an AI-driven smart contract development platform aimed at simplifying the smart contract development process.

The platform employs advanced artificial intelligence technology, allowing users to simply describe the desired functionality in natural language, and the system can automatically generate the corresponding smart contract code. This greatly lowers the threshold for smart contract development, eliminating the need to master complex programming languages and blockchain knowledge.

In addition to code generation, the platform also offers a range of auxiliary tools, including security audits, testing, deployment, and more. Developers can manage the entire lifecycle of smart contracts on the platform, improving development efficiency.

This innovative solution is expected to drive the large-scale application of smart contracts. Currently, there are still many obstacles to the development and application of smart contracts, such as high development costs and numerous security risks. Gensyn's AI platform specifically addresses these pain points by providing a brand new solution.

Industry insiders have welcomed the platform. They believe that the introduction of AI technology will greatly lower the barriers to smart contract development, attracting more developers to join the blockchain field. At the same time, some analysts have expressed concerns about the safety and reliability of AI-generated code, suggesting that further improvement and testing are needed.

Overall, Gensyn's AI platform brings new possibilities for smart contract development. If the platform can withstand the test of practice, it is expected to become an important force in promoting the development of blockchain technology.

4. Hyperliquid launches a decentralized exchange aggregator

Hyperliquid is a company focused on decentralized finance ( DeFi ) infrastructure development. Recently, the company launched a decentralized exchange ( DEX ) aggregator, aimed at improving trading efficiency and user experience.

The aggregator can consolidate the liquidity pools of multiple DEXs, providing users with better exchange rates and higher liquidity. Users can obtain the best trading conditions without switching between different DEXs.

In addition to aggregating liquidity, this product also offers a smart routing feature. The system automatically analyzes the conditions of various DEXs and selects the optimal path to execute trades, thereby further reducing trading costs.

The launch of this product fills an important gap in the DeFi ecosystem. Currently, DEXs face issues such as fragmented liquidity and poor user experience, making it difficult to compete with centralized exchanges. Hyperliquid's aggregator specifically addresses these pain points, providing an innovative solution.

Industry insiders have welcomed the product. They believe that aggregators help enhance the competitiveness of DEXs, attracting more users to join the DeFi ecosystem. At the same time, some analysts are concerned that aggregators may intensify competition among DEXs, leading to further fragmentation of the ecosystem.

Overall, the Hyperliquid aggregator injects new vitality into the DeFi ecosystem. If this product can achieve widespread adoption, it will help promote the development and maturation of the DeFi ecosystem.

5. Pi Network launches no-code AI application studio

Pi Network is a decentralized cryptocurrency and data network project. Recently, the project launched a no-code AI application studio aimed at lowering the threshold for developing decentralized applications (dApp).

The studio has adopted advanced artificial intelligence technology, allowing users to simply describe the desired functionality in natural language, and the system can automatically generate the corresponding dApp code. This not only simplifies the development process but also helps attract more non-technical individuals to participate in dApp development.

In addition to code generation, the studio also offers a range of auxiliary tools, including testing, deployment, monitoring, and more. Developers can complete the full lifecycle management of dApps within the studio, improving development efficiency.

This initiative reflects Pi Network's emphasis on ecological construction. As a decentralized network, Pi requires a large number of high-quality dApps to meet user demands and promote ecological development. Through a no-code studio, Pi hopes to attract more developers to join and enrich ecological applications.

Industry insiders have welcomed the studio. They believe that no-code development helps lower the barriers to dApp development, attracting more creativity and talent to the blockchain field. At the same time, some analysts have expressed concerns about the security and reliability of AI-generated code, suggesting that further improvements and testing are needed.

Overall, the no-code studio of Pi Network brings new possibilities for dApp development. If this studio can gain widespread adoption, it will help promote the prosperous development of the Pi ecosystem.

4. Economic Dynamics

1. Federal Reserve Chairman Powell reiterates the "wait-and-see" stance.

The current economic environment is overall improving, with the US GDP growth remaining robust, inflation rates close to the target level of 2%, and the job market continuing to improve. However, the tariff policies of the Trump administration have caused inflationary pressures, potentially raising inflation by about 1 percentage point.

Important Event: At the European Central Bank forum held in Portugal, Federal Reserve Chairman Powell reiterated a "wait-and-see" stance. He stated that as long as the U.S. economy remains robust, the Federal Reserve will act cautiously, gather more information, and observe the impacts, and will not raise interest rates for now. Powell's remarks have drawn market attention, with investors divided on the Fed's next policy direction.

Market reaction: Powell's speech has sparked divergence in the market regarding the Federal Reserve's policy outlook. Some analysts believe that Powell's "wait and see" stance suggests that the Federal Reserve is unlikely to adjust interest rates in the short term. However, other analysts are concerned that the Trump administration's tariff policies could drive up inflation, thereby forcing the Federal Reserve to accelerate the pace of interest rate hikes. Overall, uncertainty among investors regarding the direction of Federal Reserve policy has increased.

Expert Opinion: Goldman Sachs Chief Economist Jan Hatzius stated that Powell's speech conveyed a clear message that the Federal Reserve will remain patient and carefully assess economic data before taking the next step. He believes that unless there are significant changes, it is unlikely that the Federal Reserve will adjust interest rates for the remainder of this year.

Morgan Stanley's chief economist, Chetan Ahya, holds a different view. He points out that the Trump administration's tariff policy could significantly raise inflationary pressures, thereby forcing the Federal Reserve to accelerate its rate hike pace. He expects that the Federal Reserve may raise interest rates again before the end of 2025.

2. ECB President Lagarde calls for stronger coordination among global central banks.

The current global economic growth is slowing down, trade protectionism is rising, and geopolitical risks are increasing. The economic growth in the Eurozone is only 0.4% in the first quarter of 2025, lower than expected. The inflation rate continues to be below the target level of 2%, and the improvement in the job market is weak.

Important Event: At the European Central Bank forum held in Portugal, ECB President Lagarde called for greater coordination among global central banks to jointly address current economic challenges. She emphasized that in the era of globalization, the policy decisions of central banks will have spillover effects, impacting the economic performance of other countries. Therefore, central banks must strengthen communication and coordination to achieve the best policy mix beneficial to the global economy.

Market Reaction: Investors had a lukewarm response to Lagarde's speech. On one hand, strengthening central bank coordination is beneficial for the consistency and effectiveness of policies, thereby reducing uncertainty and fostering market confidence. On the other hand, it is difficult for central banks in different countries to fully reach consensus in reality, and policy divergences may still exist, bringing new uncertainties to the market.

Expert opinion: David Folkerts-Landau, Chief European Economist at Deutsche Bank, believes that Lagarde's call for strengthened central bank coordination is reasonable. He points out that the current global economy is facing increasing downward pressure, and better coordination of policies among central banks would help boost the economy and maintain financial stability.

Goldman Sachs European economist Sven Jari Stehn takes a cautious stance. He stated that while enhancing coordination is the right direction, it is difficult for central banks to reach complete consensus in reality. Different countries face different economic situations, and the policy orientations of central banks may vary, which could limit the depth of coordination.

3. The Trump administration criticizes the Federal Reserve again, calling for interest rate cuts to stimulate the economy.

The U.S. economy grew by 3.1% in the first quarter of 2025, a slowdown compared to the same period last year. The inflation rate is around 2%, and the job market remains strong. However, signs such as a slowdown in manufacturing, weak business investment, and an expanding trade deficit indicate that the economy may be losing momentum.

Important events: The Trump administration has recently publicly criticized the Federal Reserve again, calling for it to cut interest rates to stimulate economic growth. White House economic advisor Kudlow stated that the Federal Reserve should "wake up" to the risks of a slowing economy and take appropriate action. Treasury Secretary Mnuchin bluntly stated that if the Federal Reserve were "a bit smarter," it should cut interest rates immediately.

Market Reaction: The criticism from the Trump administration has intensified the market's divergence and uncertainty regarding the direction of Federal Reserve policies. Some investors believe that, in the context of an economic slowdown, the Fed should indeed consider lowering interest rates. However, there are also investors who are concerned that a rate cut could trigger negative effects such as rising inflation. Overall, there is a divergence in market expectations regarding the Fed's next move.

Expert Opinion: Goldman Sachs economists stated that although there are signs of an economic slowdown, the job market remains strong and inflation is within the target range. Therefore, the Federal Reserve currently has no reason or pressure to cut interest rates. They expect the Federal Reserve to keep interest rates unchanged throughout 2025.

Economists at Citigroup, however, hold a different view. They believe that signs of weakness in manufacturing and a decline in business investment indicate that the economy is indeed facing downward pressure. If this trend continues, the Federal Reserve may cut interest rates later this year to boost economic growth.

5. Regulation & Policy

1. The U.S. Securities and Exchange Commission has released new guidelines for the disclosure of cryptocurrency exchange-traded products.

The U.S. Securities and Exchange Commission (SEC) Division of Corporation Finance released new guidance on July 1 regarding disclosure requirements for exchange-traded products (ETPs) related to crypto assets. This move aims to provide greater clarity on the application of federal securities laws to crypto assets.

This guidance outlines in detail the specific content that issuers of cryptocurrency ETPs need to disclose in their offering and registration documents. Cryptocurrency ETPs are defined as investment products listed and traded on national securities exchanges, typically structured as trusts that hold spot cryptocurrencies or derivative instruments referencing cryptocurrencies. According to the guidance, issuers of these ETPs must register their offerings and classes of securities under the Securities Act of 1933 and the Securities Exchange Act of 1934, respectively. Additionally, issuers of cryptocurrency ETPs are also subject to the anti-fraud provisions of federal securities laws.

The release of this guideline aims to provide clearer regulatory guidance for the issuance and trading of crypto asset ETPs, enhancing regulatory transparency and investor protection. This makes broader access to cryptocurrencies such as Bitcoin and Ethereum possible, strengthening regulatory compliance and investor protection.

Industry insiders generally believe that the SEC's move reflects a further openness and inclusive attitude towards the regulation of crypto assets. Faryar Shirzad, Chief Policy Officer of the cryptocurrency exchange Coinbase, stated that the guidance provides greater certainty and clarity for the issuance and trading of crypto asset ETPs, helping to advance the mainstreaming of crypto assets.

2. The South Korean government has launched a joint review of the conditions for the issuance of the Korean won stablecoin.

The South Korean President's Policy Planning Committee recently held a meeting with financial regulatory agencies to discuss the issuance conditions and regulatory framework for stablecoins denominated in Korean Won. The virtual asset task force under the committee also heard supplementary reports from the regulatory agencies, focusing on key issues such as the capital requirements for issuers.

It is reported that regulatory authorities emphasize the need to establish clearer issuance standards to limit the entry of small cryptocurrency companies that lack sufficient funding. This reflects the South Korean government's aim to promote the development of stablecoins while also strengthening regulations to ensure market stability and investor protection.

Stablecoins, as crypto assets pegged to fiat currencies, have broad application prospects in areas such as payments and settlements. The Korean government's move aims to establish a regulatory framework for the issuance and use of Korean won-denominated stablecoins, promoting a balance between financial innovation and regulation.

Industry insiders believe that the South Korean government's cautious attitude reflects its emphasis on the risks associated with stablecoins. Financial technology expert Park Si-yeon stated that the capital strength of stablecoin issuers is key to ensuring their solvency, and overly lenient entry standards could bring systemic risks. He suggested that the government should establish stablecoin regulatory standards that align with the country's conditions, based on international experience.

3. The Attorney General of New York calls for stronger regulation of stablecoins.

New York Attorney General Letitia James warned Congress that the "2025 American Stablecoin National Innovation Guidance and Establishment Act" (GENIUS Act) passed by the U.S. Senate "lacks the necessary safeguards to protect the American public."

James urged Congress to slow down the stablecoin legislation process in an eight-page letter, stating to "take time to draft a bill that can promote innovation while protecting our globally envied banking system." In his latest letter, James proposed a comprehensive revision of the bill, first regulating stablecoin issuers as banks and disqualifying non-bank issuers.

As the top legal regulator in New York, the financial center, James's concerns about the stablecoin regulation bill have drawn market attention. Some analysts believe that overly lenient regulation could encourage the use of stablecoins for illegal activities and pose a threat to the traditional financial system.

However, some industry insiders believe that James's concerns are overstated. Faryar Shirzad, the policy chief at the cryptocurrency exchange Coinbase, stated that the GENIUS Act already includes sufficient consumer protection measures and equating stablecoin issuers with banks would stifle innovation. He urged Congress to seek a balance between promoting innovation and risk management.