7.23 AI Daily Report: The political and economic situation in the United States takes a new turn; a breakthrough in Crypto Assets regulation.

1. Headlines

1. Trump will announce the "AI Action Plan," focusing on infrastructure, innovation, and global impact.

The Trump administration's artificial intelligence (AI) policy blueprint is about to be unveiled. According to insiders, Trump will release the long-awaited "AI Action Plan" at the "Winning the AI Race" event on the 23rd local time. This 20-page document will focus on three main pillars: infrastructure, innovation, and global impact, primarily implemented through directives to federal agencies and some funding projects.

According to reports, the plan "is mainly carrots rather than sticks," emphasizing the promotion of AI development through incentives rather than excessive regulation. This direction aligns with the Trump administration's consistent stance of "deregulation." Analysts believe that the "AI Action Plan" aims to consolidate the United States' global leadership position in the field of AI and lay the groundwork for a comprehensive national AI strategy for the future.

However, whether the plan can truly promote the development of the AI industry remains to be seen over time. Some critics are concerned that an over-reliance on incentive policies may not be able to timely address the ethical and safety challenges posed by the rapid development of AI. Overall, the "AI Action Plan" will serve as an important guideline for the Trump administration's AI policy, and its specific implementation and effects are worth ongoing attention.

2. Japanese Prime Minister Shigeru Ishiba may resign at the end of August, causing the yen to drop in the short term.

According to Japan's "Daily News," Japanese Prime Minister Shigeru Ishiba revealed to those close to him that he would announce his intention to resign at the latest by the end of August, based on the results of the Liberal Democratic Party's Senate elections. After suffering a crushing defeat in the Senate elections, Ishiba immediately expressed his intention to remain in office, but he is currently facing increasing calls for resignation and criticism within the party, and the final decision time may change.

As soon as the news broke, the Japanese yen fell nearly 0.5% against the US dollar, to around 124.5 yen per dollar. Analysts pointed out that Shigeru Ishiba's resignation will trigger a new round of turmoil in Japanese politics, increasing market uncertainty about the outlook for the Japanese economy.

Nikai Toshihiro, the Secretary-General of the Liberal Democratic Party, has hinted that the party will discuss the issue of Ishiba Shigeru's position. If Ishiba steps down, his successor is likely to implement stimulus policies to boost the weak economy. This could further increase Japan's fiscal deficit and ultimately lead to a depreciation of the yen.

On the other hand, political turmoil may also delay Japan's progress in advancing structural reforms, impacting the economic recovery process. Overall, Shigeru Ishiba's resignation will bring new uncertainties to Japan, and its effects on the yen, Japanese stocks, and the Japanese economy remain to be further observed.

3. The SEC suddenly paused the review after approving the conversion of the Wise crypto index fund to an ETF.

The U.S. Securities and Exchange Commission ( SEC ) suddenly suspended the review process after approving the conversion of the Wise 10 Cryptocurrency Index Fund to an ETF on the 22nd. Previously, the SEC had approved the fund's conversion to an ETF, but halted this decision before it officially took effect.

Wise Asset Management Company expressed disappointment at the SEC's suspension decision. The company stated that the SEC failed to explain the reasons for the suspension, which creates uncertainty for investors. Wise has been working hard to provide investors with a low-cost way to gain exposure to cryptocurrencies.

Analysts believe that the SEC's actions may be related to cryptocurrency regulatory issues. Currently, the SEC is still weighing whether to approve a spot Bitcoin ETF. Some believe that the SEC may want to make a decision on the spot ETF first before considering the conversion of index funds.

On the other hand, there are also views that the SEC may have concerns about the product structure and operational model of wise. In any case, the SEC's actions have once again delayed the timeline for the approval of cryptocurrency ETFs, which may bring a certain impact to the cryptocurrency market.

4. Yu Weiwen: Details of the "Stablecoin Issuer Licensing System" will be announced next week.

The Hong Kong Monetary Authority ('s Chief Executive, Eddie Yue, stated on the 22nd that in response to market concerns regarding the application process, the Monetary Authority plans to release a summary of the "Licensing Regime for Stablecoin Issuers" next week. This document will provide detailed explanations of the acceptance and handling arrangements for license applications.

Yu Weiwen pointed out that the Monetary Authority has solicited opinions on the draft "Stablecoin Regulation" and it is expected that the final version will not have significant adjustments compared to the draft. However, given the common international regulatory concerns, stricter requirements will be established in terms of anti-money laundering, aiming to ensure the orderly and healthy development of the stablecoin market in Hong Kong.

Analysts believe that disclosing application details will help alleviate market concerns about regulatory uncertainty. Some potential issuers have doubts about the application process, and a transparent system will provide them with guidance.

However, some are concerned that overly strict anti-money laundering requirements may increase compliance costs for issuers, which could in turn affect the development of stablecoins in Hong Kong. Overall, the regulation of stablecoins in Hong Kong is gradually being implemented, and the future development situation still needs to be monitored continuously.

) 5. Multiple ETF issuers have joined forces to amend applications, requesting physical redemption of cryptocurrency ETFs.

According to reports, six ETF issuers including 21Shares, Fidelity, Franklin Templeton, Galaxy, VanEck, and WisdomTree submitted revised proposals to the U.S. SEC on the 22nd, requesting to allow their spot Bitcoin and Ethereum ETFs to adopt a physical creation and redemption mechanism.

Analysts believe that this move shows the SEC's attitude towards the approval of cryptocurrency ETFs is turning positive. Bloomberg ETF analyst James Seyffart stated: "More positive signals indicate that the U.S. SEC is showing a positive trend and is likely making adjustments to the details."

The physical redemption mechanism is only applicable to authorized participants, and ordinary investors cannot directly exchange ETF shares for cryptocurrency spot assets. However, this mechanism can enhance the operational efficiency of ETFs and help investors avoid capital gains tax.

Some believe that the joint action of issuers may prompt the SEC to expedite the approval process. However, there are also views that the SEC may still need more time to assess the risks and details of the physical redemption mechanism. Overall, the revised applications from issuers convey a positive signal, and the prospects for the approval of cryptocurrency ETFs are worth looking forward to.

2. Industry News

1. Bitcoin breaks through the $120,000 mark, with bullish momentum continuing to strengthen.

The price of Bitcoin broke through the $120,000 mark during the Asian morning session on July 23, setting a new high for the year. This important milestone reflects the continued strengthening of bullish sentiment for Bitcoin.

The strong performance of Bitcoin is mainly attributed to the continuous buying by institutional investors. According to data, the inflow of funds into Bitcoin ETFs reached a record high of 440 million USD last week. This indicates a growing demand for Bitcoin among institutional investors. Meanwhile, the outflow of Bitcoin from exchanges is also continuing to increase, reflecting investors' willingness to hold long-term.

Analysts believe that after Bitcoin breaks the $120,000 mark, the next significant resistance level is around $130,000. If it can surpass this key position, Bitcoin is expected to further probe historical highs. However, some analysts also warn that the rapid rise of Bitcoin may trigger a profit-taking event, and investors need to remain cautious.

Overall, Bitcoin's strong performance reflects the recovery trend in the cryptocurrency market. With the continued influx of institutional investors, Bitcoin's price is expected to rise further. However, potential correction risks should also be taken into account.

2. Ethereum ETF fund inflows hit a new high, institutional demand continues to grow.

Ethereum's price slightly rose to $3720 during the Asian early trading session on July 23. Meanwhile, the inflow of funds into Ethereum ETFs hit a new record, reflecting the continued growing demand from institutional investors for Ethereum.

According to the data, the inflow of funds into Ethereum ETFs reached $151 million last week, setting a historical high. This figure indicates a continued increase in demand for Ethereum from institutional investors, primarily due to Ethereum's leading position in decentralized finance and tokenized assets.

Analysts believe that the record inflow of funds into Ethereum ETFs reflects institutional investors' optimism about Ethereum's long-term prospects. As the Ethereum ecosystem continues to develop and application scenarios expand, the demand for Ethereum from institutional investors is expected to further increase.

However, some analysts warn that the rapid rise in Ethereum prices could trigger a profit-taking sell-off. In addition, the ETH withdrawal queue on the Ethereum network is also continuously growing, which could bring some selling pressure.

Overall, the record inflows into Ethereum ETFs reflect institutional investors' continued optimism towards Ethereum. However, it is also necessary to be cautious of potential pullback risks and selling pressure.

3. Solana price breaks through the $200 mark, ecological development continues to heat up

The price of Solana broke through the $200 mark during the Asian morning session on July 23, reporting at $201. This important milestone reflects the ongoing warming of the Solana ecosystem.

The rise in Solana's price is mainly driven by ecosystem development. Recently, new projects and applications such as USELESS have emerged continuously in the Solana ecosystem, further boosting Solana's popularity. At the same time, Solana's trading volume and the number of active addresses are also continuously increasing, reflecting a rise in user activity.

Analysts believe that after Solana's price breaks the $200 mark, the next significant resistance level is around $250. If it can break through this key position, Solana is expected to further reach new highs. However, some analysts also warn that Solana's rapid rise may trigger profit-taking, and investors need to remain cautious.

Overall, the strong performance of Solana's price reflects the ongoing warming of its ecosystem. With more projects and applications emerging, Solana's price is expected to rise further. However, potential pullback risks should also be monitored.

4. XRP price is nearing historical highs, market sentiment is mixed.

The price of XRP rose slightly in the Asian morning session on July 23, reaching $3.48, close to its historical high. However, there is a divergence in market sentiment, with investors having different expectations for the future trend of XRP.

The rise in XRP prices is mainly driven by the improvement in the regulatory environment and the buying by institutional investors. Recently, U.S. regulators have softened their stance on cryptocurrencies, which has brought favorable conditions for the development of XRP. At the same time, the demand for XRP from institutional investors continues to grow.

Analysts believe that if XRP can break through its historical high, the next significant resistance level is around $6. However, some analysts warn that XRP's rapid rise may trigger a profit-taking wave, and investors need to remain cautious.

Overall, the strong performance of XRP's price reflects the market's optimistic expectations for its future development. However, it is also necessary to be vigilant about potential pullback risks and regulatory uncertainties.

5. The season index for altcoins continues to rise, and FOMO sentiment may heat up.

The altcoin season index on CoinMarketCap continued to rise on July 23, reflecting the ongoing warming of the altcoin market. This could trigger investors' FOMO### fear of missing out( sentiment.

The altcoin season index is a metric that measures the performance of altcoins relative to Bitcoin. An increase in this index indicates that the gains of altcoins have surpassed those of Bitcoin, reflecting investors' preference for altcoins.

Analysts believe that the rise of the altcoin season index may trigger FOMO among investors, further driving up the prices of altcoins. However, it is also important to be wary of the high risks in the altcoin market, and investors should invest cautiously.

Overall, the rise of the altcoin season index reflects the ongoing warming of the cryptocurrency market. However, potential risks also need to be monitored, and investors should remain cautious.

3. Project News

) 1. Poseidon: a16z Crypto led a $15 million seed round to build decentralized AI data infrastructure.

Poseidon is a decentralized AI data infrastructure project incubated by the on-chain IP protocol Story. The project aims to provide AI developers with secure, legally compliant access to training data through Story's programmable intellectual property layer and immutable registry.

Recently, Poseidon announced the completion of a $15 million seed round financing, led by the well-known venture capital firm a16z Crypto. This funding will be used to accelerate Poseon's technology development and product implementation. As an innovative attempt in the field of AI training data, Poseidon is expected to address the compliance and security challenges of current AI data acquisition, injecting new momentum into AI development.

The emergence of Poseidon has attracted widespread attention from industry insiders. Analysts believe that with the continuous development of AI technology, the construction of data infrastructure will become a key factor restricting the implementation of AI. The decentralized data layer constructed by Poseidon through blockchain technology can ensure the traceability of data and copyright protection, providing a reliable data source for AI training.

However, Poseidon, as an emerging project, is still in its early stages, and its business model and technical roadmap need further improvement. Industry insiders indicate that Poseidon needs to continuously innovate and collaborate deeply with AI developers and data providers to truly realize its value. Overall, Poseidon provides a new approach to the development of AI data infrastructure, which is worth the industry's ongoing attention.

2. Stellar###XLM( price prediction: Analysts rarely set a $20 target, the real bull market has yet to start.

Stellar is an open-source distributed payment network designed to facilitate cross-asset transfers. Its native cryptocurrency XLM has seen remarkable growth recently, with a monthly increase exceeding 100%.

Crypto analyst C-Zar boldly pointed out in his latest prediction that the current price of XLM, at approximately 0.47 USD, is severely undervalued and is on the verge of a breakout after a long consolidation. He believes XLM is expected to initiate the first wave of a major rally in the short term, aiming for a target range of 2.20-2.46 USD before the end of August. Over a longer period, C-Zar predicts that XLM will reach a high of 20-40 USD by the end of the first quarter of 2026.

The bullish logic of C-Zar is mainly based on the following points:

1. XLM is in the breakout stage of a long-term triangular consolidation and is expected to start a new round of upward cycle.

2. The technical advantages and low-cost characteristics of the Stellar network will drive its broader application in the fields of payments and cross-border transfers.

3. The rise of Ripple )XRP( may attract more attention to alternative coins like XLM.

4. Institutional investors and retail funds are expected to continue flowing in, injecting new momentum into XLM.

However, some analysts have expressed skepticism about the $20 prediction for C-Zar. They believe that for XLM to achieve such a significant increase, the Stellar network needs to make breakthrough innovations on its existing foundation and gain large-scale commercial applications.

Overall, XLM has indeed shown a strong upward momentum recently, but it will take time to observe the development of its fundamentals to achieve the long-term targets set by analysts. Investors need to remain rational and closely monitor the latest developments in the Stellar network.

) 3. The Sui ecosystem continues to make progress, the direction of Aptos is yet to be clarified, and Move-based projects are still worth looking forward to.

The Move ecosystem blockchain projects have recently continued to attract attention. Among them, the Sui ecosystem is the most active in development, while Aptos faces uncertainty in its development direction. As the only Move ecosystem project that has not yet issued tokens, Movement is also worth ongoing attention.

The Sui ecosystem has continuously launched innovative projects and popular applications over the past year, leading the development of the Move system. Although there are fewer tradable assets, Sui is nurturing new star projects through incubation programs and conducting large-scale promotions in places like South Korea. Additionally, the inclusion of Grayscale Trust and Native USDC on Sui will further promote the development of the Sui ecosystem.

At the same time, the development direction of the Aptos ecosystem remains to be clarified. Although Aptos has launched its mainnet after issuing tokens, there are differences within the community regarding the direction of its foundation's efforts, which brings a certain degree of uncertainty to the ecosystem's development.

As the only project in the Move ecosystem that has not yet issued tokens, Movement's future development is also receiving much attention. Analysts believe that Movement needs to quickly launch a flagship project in order to secure a share of the Move ecosystem.

Overall, Move-based blockchain projects still have considerable growth potential. The Sui ecosystem has the highest level of activity, Aptos needs to define its development path clearly, while Movement is a promising new star for the future. Whether Move-based projects can ultimately break through still requires time to test.

( 4. DogeOS Proposal: Achieve native verification of Dogecoin network ZKP through new opcodes.

DogeOS is the application development layer of the Dogecoin ecosystem. Recently, DogeOS officially submitted a technical proposal to Dogecoin Core, intending to implement native verification functionality for zero-knowledge proof (ZKP) by adding the operation code )OP_CHECKZKP###.

This proposal aims to support off-chain applications such as Rollup and smart contracts, while maintaining the lightweight and high-speed characteristics of the Dogecoin main chain. The proposal adopts a modular design, with the first version supporting Groth16 proof verification, and older version nodes can be compatible. To avoid performance risks, the initial setting allows each script to use only one ZKP, and each block can use only five ZKPs.

If the proposal is passed, the Dogecoin network will natively support ZKP verification, thereby enhancing its capabilities in advanced applications and enabling interoperability with functional networks such as Ethereum. This will further improve the practicality of Dogecoin and lay the foundation for its applications in areas such as crypto payments and DeFi.

Analysts believe that the DogeOS proposal reflects the Dogecoin community's desire for network upgrades and technological innovation. By introducing advanced technologies such as ZKP, Dogecoin is expected to achieve functional compatibility with other crypto networks while maintaining simplicity.

However, the implementation of the proposal will still take time. The Dogecoin community needs to reach a consensus on the details of the proposal and evaluate the impact of the upgrade on network performance and security. Overall, the DogeOS proposal injects new vitality into the long-term development of Dogecoin and is worth continuous attention.

5. Multiple ETF issuers have joined forces to amend their applications, promoting the physical issuance and redemption of Bitcoin/Ethereum spot ETFs.

Recently, five major Bitcoin/Ethereum ETF issuers, including Ark 21Shares, VanEck, Invesco, WisdomTree, and Fidelity, have submitted revised applications to the U.S. Securities and Exchange Commission ( SEC ), requesting to add a physical subscription and redemption feature for their spot ETFs.

The physical redemption mechanism can enhance the operational efficiency of ETFs and help investors avoid capital gains taxes, but it is only applicable to authorized participants, and retail trading is unaffected. This move, along with institutions like BlackRock applying for staking functions, constitutes a wave of ETF upgrades.

Bloomberg ETF analyst James Seyffart views this as a "positive signal" of a shift in the SEC's stance, with regulatory approval potentially on the horizon. Analysts believe that the introduction of a physical redemption feature will further enhance the attractiveness of cryptocurrency ETFs, benefiting the influx of institutional capital.

At the same time, the SEC's attitude towards cryptocurrency regulation is also changing. The latest proposal from the Senate suggests exempting certain tokens from securities law registration requirements, allowing traditional institutions to participate in cryptocurrency trading. This creates favorable conditions for the approval of cryptocurrency ETFs.

However, whether the crypto ETF can ultimately be approved remains uncertain. SEC Chairman Gary Gensler previously stated that there are still some issues to be resolved regarding the applications for cryptocurrency spot ETFs. Investors need to continue to closely monitor regulatory developments.

Overall, the efforts of ETF issuers and the improvement of the regulatory environment have added new hope for the approval of crypto ETFs. Once approved, crypto ETFs will become an important channel for institutional funds to enter the market, having a profound impact on the development of the industry.

4. Economic Dynamics

( 1. The conflict between the Trump administration and the Federal Reserve has intensified, raising concerns in the market.

The overall U.S. economy is currently maintaining a moderate growth trend, with the annualized quarter-on-quarter GDP initial value for the second quarter at 2.4%, slightly below the market expectation of 2.5%. The inflation rate hovers around 2%, in line with the Federal Reserve's target level. The unemployment rate remains low at 3.6%, and the job market is still strong. However, tensions between the Trump administration and Federal Reserve Chairman Powell have intensified, raising market concerns about the economic outlook.

The Trump administration has recently continued to publicly criticize the Federal Reserve's monetary policy, believing that the pace of interest rate hikes is too fast and will hinder economic growth. They are calling for the Federal Reserve to lower interest rates to stimulate the economy. Meanwhile, the Trump administration has also threatened to fire Powell and pushed the concept of a "shadow Federal Reserve chairman." This approach openly interferes with the independence of the Federal Reserve, drawing widespread attention.

The Federal Reserve insists on maintaining the current neutral interest rate level and hints that it may continue to raise interest rates in the future. The latest released minutes from the July FOMC meeting show that committee members remain optimistic about the economic outlook, believing that the inflation rate will stay around 2% in the medium term. They believe that if economic performance continues to be strong, further interest rate hikes will be needed to achieve the inflation target.

The market has reacted strongly to the conflict between the Trump administration and the Federal Reserve. Investors are worried that if the Trump administration continues to pressure the Federal Reserve, it may lead to a tightening of monetary policy, which in turn could suppress economic growth. The bond market has already reflected this concern, with a distorted yield curve signaling the risk of an economic slowdown.

David Mericle, Chief Economist at Goldman Sachs, warned that the Trump administration intends to raise the base tariff rate from 10% to 15%, with tariffs on copper and key minerals reaching as high as 50%. This approach could exacerbate inflationary pressures and suppress economic growth. The International Monetary Fund also released a report indicating that increased tariffs in the U.S. will reduce global demand, lead to higher import prices, and could trigger retaliatory measures from trade partners, further intensifying global economic uncertainty.

Pacific Investment Management Company ) PIMCO ### economist Tiffany Wilding analyzes that although Trump is unlikely to directly replace Powell in the short term, he will influence Federal Reserve decisions through upcoming appointments, including the term of Governor Quigley expiring in January and Powell's chair position expiring in May. This personnel change will reshape the decision-making landscape of the Federal Reserve.

Overall, the conflict between the Trump administration and the Federal Reserve has intensified market uncertainty, shaking investors' confidence in the economic outlook. If the two sides cannot reach a consensus, future monetary and fiscal policies may diverge, further exacerbating volatility in the financial markets.

5. Regulation & Policy

( 1. South Korean regulators limit ETF expansion in holdings of stocks in crypto companies.

The Financial Supervisory Service of South Korea recently issued verbal guidance to domestic asset management companies, urging them not to increase the proportion of stocks of cryptocurrency companies such as Coinbase and Strategy in their ETFs.

Background: In 2017, the Financial Services Commission of South Korea issued the "Emergency Measures Related to Virtual Currency," which explicitly prohibits formal financial institutions from holding or purchasing virtual assets, obtaining related collateral, and making equity investments. This guidance aims to control the risk exposure of traditional financial products to virtual assets.

Policy Content: Regulatory authorities reaffirm that the administrative guidance from 2017 is still valid, requiring asset management companies to comply with relevant regulations. Data shows that several products related to virtual assets in the current South Korean listed ETFs have holdings exceeding 10%.

Market reaction: The directive has prompted complaints from domestic financial participants, who believe it has created an unfair competitive environment, as retail investors can purchase US ETFs through investments in cryptocurrency companies.

Expert Opinion: Analysts point out that the regulators' move aims to prevent traditional financial products from being overly exposed to the risks of crypto assets and to maintain the stability of the financial system. However, there are also views that excessive restrictions may affect the competitiveness of the South Korean capital market.

) 2. The Hong Kong Monetary Authority will announce details of the licensing system for stablecoin issuers.

The President of the Hong Kong Monetary Authority, Eddie Yue, stated that a summary of the "licensing regime for stablecoin issuers" will be announced next week, elaborating on the arrangements for accepting and processing license applications.

Background: The Hong Kong SAR government passed the "Stablecoin Ordinance" in December 2022, aiming to establish an effective regulatory framework for stablecoin issuers. The Monetary Authority, as the regulatory body, is responsible for formulating relevant rules.

Policy content: Yu Weiwen revealed that the Monetary Authority is adjusting the regulatory guidelines based on market feedback, aiming to announce them by the end of July. The new regulations will clarify the licensing application and approval process for stablecoin issuers.

Market Reaction: There are many rumors in the market regarding the application process, and publishing details will help clarify doubts. However, there are also concerns that overly strict regulations may affect Hong Kong's attractiveness as a digital asset hub.

Expert Opinion: The report from Ping An Securities points out that Hong Kong may form a "dual-track regulatory framework of 'USD stablecoin connecting to the international market + HKD stablecoin linking to the mainland'", providing a "testbed" for the internationalization of the RMB.

3. The U.S. Securities and Exchange Commission may relax the physical redemption limits for crypto ETFs.

According to Bloomberg ETF analysts, several fund companies have submitted amended applications to the U.S. Securities and Exchange Commission, requesting to add physical subscription and redemption functions for Bitcoin and Ethereum spot ETFs.

Background: Currently, U.S. cryptocurrency ETFs cannot achieve physical creation and redemption, and can only be traded on the secondary market, which affects the efficiency of ETF operations. The physical creation and redemption mechanism can improve liquidity and help investors avoid capital gains tax.

Policy Content: Analysts believe that the fund company's revision application shows that the regulatory authority is actively communicating with the industry, which may pave the way for a physical subscription and redemption mechanism. This mechanism is only applicable to authorized participants, and retail transactions are unaffected.

Market reaction: The market reacted positively to this news, interpreting it as a positive signal of a shift in regulatory attitude. Physical creation and redemption are expected to enhance the operational efficiency of ETFs and attract more institutional funds to enter.

Expert Opinion: Renowned analyst James Seyffart stated that this move could pave the way for the SEC to approve crypto ETFs. However, there are also views suggesting that regulatory agencies may still maintain a cautious attitude towards crypto assets.