Bitcoin traded near the $66,000 mark on Wednesday, recovering from earlier intraday losses as equity markets bounced back from a sharp morning decline. The digital asset briefly slipped below $65,700 in the afternoon before rebounding alongside a broader risk-on move. The day was packed with major developments: strong earnings from Alphabet, steady bitcoin holdings from Tesla, surging oil prices on geopolitical risks, and shifting odds around the Clarity Act in the U.S. Senate. Here is a comprehensive look at what moved markets.
Bitcoin and Crypto Markets Find Support
After dipping to $65,660, bitcoin climbed back above $66,000 as stocks reversed early losses. The Nasdaq 100, which had been down more than 1% pre-market, returned to flat by mid-session, while the S&P 500 and Dow Jones Industrial Average turned modestly positive. This recovery buoyed crypto sentiment, with ether, XRP, and solana showing small gains. Analysts pointed to $63,000 as a key support level; holding above it suggested the correction was stabilizing. A decisive break below could trigger further profit-taking, while a move above $65,000–$66,000 would improve momentum, according to Capital.com's Daniela Hathorn.
U.S. spot bitcoin ETFs extended their winning streak to six consecutive days, adding $203 million on Tuesday. This marked the longest run of inflows since April, though the $930 million accumulated over the streak was less than half the $2.5 billion that exited during an eight-day outflow at the end of June. Total assets under management in these funds stood just shy of $81 billion, the highest since mid-June. Ether ETFs also saw inflows of $37.5 million.
Google Earnings Beat as Cloud Revenue Surges 82%
Alphabet (GOOGL) delivered a strong second-quarter report, surpassing Wall Street expectations. Revenue came in at $119.8 billion, ahead of the $116.93 billion estimate. Google Cloud revenue climbed 82% year-over-year to $24.8 billion, easily beating analysts' forecast of $22.4 billion. Operating income rose 30%, with margins expanding to 34%. Capital expenditure surged to $44.9 billion, doubling from the prior year. CEO Sundar Pichai credited AI investments for driving growth, highlighting demand for Google Cloud Platform's AI infrastructure and enterprise solutions. Shares rose 0.4% in after-hours trading following the report.
The earnings came at a critical juncture for the AI trade. Investors had been questioning whether heavy spending by Big Tech on AI would generate sufficient returns, especially after chipmakers experienced whipsaw moves. Google's results provided some reassurance, but the market's focus remained on the sustainability of capital outlays. The report also offered context for bitcoin's correlation with AI-related equities, as many bitcoin miners have pivoted to AI data-center operations.
Tesla Keeps Bitcoin Holdings Unchanged
Tesla (TSLA) disclosed in its latest earnings release that it neither bought nor sold any bitcoin during the second quarter, maintaining its holdings at 11,509 BTC. The position was valued at roughly $825 million at quarter-end. The company recorded a $112 million after-tax impairment loss on its bitcoin under accounting rules requiring digital assets to be measured at fair value, with changes recognized in net income each period. Tesla remains the 12th largest publicly traded corporate bitcoin holder, while Elon Musk's other company, SpaceX, ranks eighth with 18,712 BTC on its balance sheet.
The news came as Tesla itself faces a unique dynamic: while investors want other tech giants to prove AI spending is paying off, they actually want Tesla to spend more on AI. The stock is down 16% this year, and a higher capital expenditure outlook for AI would likely lift shares rather than weigh on them.
Oil Surges to Six-Week High, Stoking Inflation Fears
President Donald Trump's renewed threats against Iran pushed West Texas Intermediate crude oil up 3.2% to $87.38 per barrel, the highest since early June. The escalation followed Trump's vow to retaliate for any Iranian attacks on ships in the Strait of Hormuz, promising to bomb bridges or power plants in Tehran. The surge in oil prices has reignited inflation concerns, sending bond yields higher. The 10-year and 2-year U.S. Treasury yields hit fresh cycle highs, and the odds of a Federal Reserve rate hike at next week's policy meeting jumped to nearly 30%, up from less than 10% a week earlier.
Expert rate watcher Jim Bianco noted that new Fed Chairman Kevin Warsh is not a fan of forward guidance, meaning the market should not expect official signals. Instead, Warsh may rely on market signals — if traders appear to "want" a rate hike, they might get one. This uncertainty weighed on risk assets, though equities and crypto managed to recover later in the session.
Clarity Act Draft Circulates but Odds of Passage Fall Below 40%
A new working draft of the Digital Asset Market Clarity Act circulated in the U.S. Senate, offering the most detailed look yet at legislation intended to regulate digital assets. The latest text includes a provision barring the president and other senior government officials from holding direct crypto interests, though the restriction would expire in 2029 and leave the Department of Justice responsible for enforcement. This ethics language has been a major sticking point in negotiations.
Despite progress, prediction market participants are skeptical the bill will become law this year. Polymarket traders currently assign only a 33%–39% chance of passage, down from nearly 50% earlier in the week. The Senate reportedly put consideration of the Clarity Act on hold due to limited bandwidth, further dampening sentiment. The pullback in bitcoin and crypto stocks in the afternoon was partly attributed to the lack of positive momentum from the new draft.
Regulatory and Market Moves
SEC Commissioner Hester Peirce warned that some crypto vaults and onchain lending strategies could fall under U.S. securities laws, cautioning that moving activities onto blockchain rails does not take them outside the scope of existing regulations. The statement shook the sector, with the native token of Morpho declining 5% after the remarks. Peirce said whether a vault falls under securities laws depends on its design, particularly if managers exercise discretion over investment decisions.
In other corporate news, digital bank Revolut is now valued at $115 billion following a secondary share sale, according to the Wall Street Journal. That represents a 50% increase from its $75 billion valuation late last year, surpassing the $95 billion market cap of Barclays, the U.K.'s largest bank. Neocloud stocks also outperformed, with IREN, Hut 8, RIOT, and Keel Infrastructure all rising about 4% after OpenAI reportedly increased its projected data center spending to $750 billion by 2030. Benchmark raised its price target on Hut 8 to $195, implying nearly 80% upside.
OpenAI's updated spending plan underscores the insatiable demand for computing power to run AI models. The company announced a $20 billion campus in Georgia named "Project Camellia" and is scaling its capital expenditure expectations from $600 billion to $750 billion by the end of the decade. This fueled continued interest in bitcoin miners-turned-AI infrastructure providers, though crypto stocks like Coinbase, Circle, BitGo, and Bullish fell after the Clarity Act disappointment.
On the prediction market front, Kalshi and Polymarket secured a temporary legal win against Minnesota's ban on prediction markets, while the U.S. Senate delayed further action on crypto legislation. The overall tone for digital assets remained cautious, with traders watching macro factors: geopolitical tensions, Fed policy, and the earnings season's impact on risk appetite. Bitcoin's floor around $63,000 remains a critical level to defend.
Source:Coindesk News