Geopolitical risks easing, prediction market is receiving follow

Recently, geopolitical risks have eased, and the ceasefire agreement between Israel and Iran has stabilized market sentiment. The COIN50 index rebounded in sync with U.S. stocks, and the Bitcoin options market also showed positive signals. In the short term, demand for put options has weakened, while long-term options indicate that investors are optimistic about Bitcoin.

Nevertheless, there is still uncertainty in the situation. Possible scenarios include maintaining the status quo or limited military escalation. However, the likelihood of extreme actions such as closing the Strait of Hormuz is low, as this would severely harm the Iranian economy. Currently, buying when geopolitical events trigger a decline may still be a viable strategy.

Regarding the issue of tariffs, despite the approaching deadline, the market has reacted mildly. The Federal Reserve Chairman stated that inflation may be affected by tariffs by the end of this summer. However, the impact of tariffs on core CPI is limited, and service prices are also declining. Tariffs may be more deflationary, which will encourage the Federal Reserve to cut interest rates in the second half of this year.

In terms of regulation, the stablecoin bill is under consideration in Congress. There is also a proposal to restrict senior officials from participating in digital assets. The Federal Reserve is no longer prioritizing reputational risk as a focus of bank regulation, which could be beneficial for the cryptocurrency industry.

The prediction market platform Polymarket seeks high valuation financing, highlighting the market's focus on consumer-facing applications. The platform has considerable trading volume, demonstrating the potential to attract non-crypto native users. Stablecoins, particularly USDC, have become invisible beneficiaries of the development of prediction markets.

The cryptocurrency market has been relatively stable this week, with Bitcoin hovering around $100,000. Spot ETFs continue to attract inflows of capital, and applications for ETFs of more asset types are also underway.

Traders maintain a positive attitude, the perpetual contract funding rate is at a medium to low level, and positions are relatively neutral, which may leave room for further market upside.