#夏日创作营 Crypto prices are sluggish, and new remarks from the Fed chair say the crypto industry “must be self-reliant” — where does the crypto market go next?

On July 15, 2026, Fed Chair Kevin Warsh delivered a major bombshell to the crypto industry during a congressional hearing—there is no intention from the Fed to backstop crypto. If stablecoins “blow up,” don’t expect the central bank to step in to rescue. The backdrop to this statement is that Bitcoin has already been cut roughly in half, from the 12.6 hundred thousand USD peak in October 2025 down to around 6.4 hundred thousand USD. The Fear and Greed Index has stayed for a long time in the “Extreme Fear” range of 22, and US spot Bitcoin ETFs recorded their largest-ever month of net outflows in June.
Research suggests that Warsh’s remarks look like a bearish signal on the surface, but in reality they are a long-delayed “risk-clearing” signal. They puncture the long-standing illusion in the crypto market of an “implicit backstop” from regulators, forcing the industry to return to fundamentals. In the short term, market volatility will be dominated by the July 28 FOMC meeting and progress on the CLARITY bill. In the medium to long term, the interest-rate path, institutional capital flows, and the rollout of the stablecoin regulatory framework will collectively determine whether the crypto market can complete a new round of value repricing under the new normal of “self-reliance.” This article looks at the current crypto market’s real situation and future direction for ordinary investors across four dimensions: price conditions, Fed policy signals, stablecoin risks, and the legislative tug-of-war.

01 Bitcoin cut in half: the chill in the market behind the data
For crypto investors in 2026, it is a year full of tests. Bitcoin’s trading price in mid-July hovered around [1] 6.47 hundred thousand USD. Compared with the all-time high of 12.6 hundred thousand USD set in October 2025, the decline is already more than 48%. Ethereum is in the same boat: its price has fallen to around the $1,900 range, a sharp drop from last year’s peak. Even though Bitcoin briefly rebounded to above $60k in early July, market confidence remains fragile, with the Fear and Greed Index staying around 22-23 in the “Extreme Fear” range for an extended period.
More worrying is the continued bleeding of liquidity. In June 2026, US spot Bitcoin ETFs recorded $4.06 billion in net outflows, the largest monthly redemptions since the product launched in January 2024. The data shows that hedge funds and broker-dealers were the main forces behind this round of selling—hedge funds reduced holdings by about 31,400 BTC and broker-dealers cut about 18,800 BTC. Even Standard Chartered, often dubbed a “flagship” for Bitcoin bulls, cut its Bitcoin target for end-2026 from $150k to $100k earlier this year and warned that Bitcoin could fall to around $50k before it stabilizes.

02 Warsh’s “no rescue” signal: the crypto industry must be self-reliant
At the congressional hearing, Warsh was asked a pointed question by Representative Brad Sherman: if the crypto industry faces a run, will the Federal Reserve intervene the way it did in 2020 to rescue money market funds? Warsh’s reply was unequivocal—he said the Fed doesn’t want to rescue anyone, and the crypto market is no exception. But he also refused to promise it would “never” step in, leaving room for policy flexibility.
To understand the true meaning of this statement, it needs to be broken down. Warsh’s warning is not aimed at decentralized crypto assets themselves, such as Bitcoin and Ethereum. In fact, the Fed has no legal tools or policy channels to “save” those tokens. His real target is the stablecoin market, which has reached $310 billion in scale. As a bridge connecting traditional finance and the crypto world, stablecoin risks are highly transmissible. During the March 2023 collapse of Silicon Valley Bank, USDC briefly de-pegged to $0.88 because part of its reserves were stored at SVB, and the entire stablecoin ecosystem was shaken. Ultimately, FDIC’s “unexpected” rescue of depositors restored USDC’s peg. This is the only time so far that the crypto market has been indirectly “rescued,” but Warsh clearly does not want it to become precedent.
Warsh’s stance conveys a core message: the crypto industry can no longer count on the central bank to act as the lender of last resort in times of crisis. What does this mean for the market?
First, stablecoin issuers must build more robust reserve mechanisms;
Second, investors need to recognize clearly that the “zero-risk” scenario for crypto assets is real—and there is no backstop;
Finally, the improvement of the industry’s regulatory framework will accelerate—because regulators won’t tolerate a financial sector that is “too big to fail” yet goes unchecked continuing to expand.

03 Clouds of rate risk: the real “price driver” is the July FOMC meeting
Compared with the talk of “no rescue,” the tool Warsh holds that truly affects the crypto market is interest-rate policy. He officially took office as Fed chair on May 22, 2026, and the June FOMC meeting was the first policy meeting during his tenure, keeping rates unchanged at 3.50%-3.75% [7]. However, the dot plot shows that among 18 Fed officials, as many as 9 expect at least one rate hike in 2026, and no one expects rate cuts within the year. Even Danske Bank predicts that the Fed will hike once in December 2026 and once again in March 2027, pushing the federal funds rate to 4.00%-4.25%.
The suppressive effect of a high-rate environment on crypto assets is obvious. Bitcoin doesn’t pay interest. The opportunity cost of holding it is the risk-free yield from dollar deposits or Treasury bonds. In an environment where rates are above 3.5%, that calculation is not attractive for institutional capital. In addition, after Warsh took office, signals were released that the Fed would reduce forward guidance and grant policy more discretionary freedom. That means markets will have lower certainty about Fed actions, and volatility could rise further.
Therefore, the July 28-29 FOMC meeting becomes the most critical market event this month. Warsh refused to call the latest weak inflation data a “victory” at the congressional hearing, suggesting that the Fed’s fight against inflation is not over. If the meeting releases a more hawkish signal, the crypto market could face renewed downward pressure. Conversely, any signs of a softer stance could become a catalyst for a short-term rebound.

04 Legislative stalemate: the CLARITY bill and the battle over stablecoin yields

On the regulatory legislation front, the market is at a delicate crossroads. The GENIUS Act was signed into law in July 2025, establishing a federal-level regulatory framework for stablecoins. It requires 100% high-quality liquid asset reserves, monthly audits, and prohibits paying yields to retail users. The bill set a rulemaking deadline of July 18, 2026, and currently the FDIC and OCC are accelerating the related details.
However, the more critical CLARITY bill is stuck in a stalemate in the Senate. The bill is intended to clarify the division of jurisdiction between the SEC and the CFTC—fully decentralized tokens would fall under CFTC oversight, while security-type tokens would remain under SEC oversight. The biggest dispute blocking passage is the issue of stablecoin yields: the traditional banking camp wants a complete ban on paying stablecoin yields, arguing that it is essentially an unregistered security and carries run risk. Meanwhile, crypto-native platforms (such as Tether and Circle) and DeFi protocols argue that banning yields would push innovation overseas, weakening U.S. competitiveness instead.
The outcome of this standoff will deeply affect the competitive landscape of the crypto market. If the yield channel is blocked, stablecoins’ appeal to retail users would be greatly reduced. If Congress ultimately allows yield products at the institutional/qualified investor level, it could open a new growth space for compliant stablecoins. Market predictions from Polymarket show that the probability of the CLARITY bill passing in 2026 has fallen from 80% to about 55%-70%. Uncertainty about the legislative outlook itself is a sword hanging over the market.

05 Investor response: how to navigate in the era of “self-reliance”?
With Warsh’s “no rescue” message and ongoing market weakness, ordinary investors need to adjust expectations and calibrate strategies.
First, reduce leverage and control position sizes.
In an environment where rates remain high and ETF flows keep turning negative, the market lacks fuel for sustained upside. Bitcoin has formed key support in the $58,000-$60,000 range. If that support breaks, the next move could be a drop to $55,000 or even lower. For investors with limited risk tolerance, keeping the allocation to crypto assets within 5%-10% of total assets is a more prudent approach.
Second, focus on ETF fund flows rather than price fluctuations.
In 2026, there have already been three cycles of “outflow-rebound”: January to February, April, and the just-ended May to June. Historical patterns show that when institutional capital flows back in, rebounds often come quickly and violently. Rather than guessing the bottom price, it’s better to continuously track ETF daily net inflow data—this is the most direct indicator of institutional sentiment turning.
Third, stablecoin risks deserve separate caution.
Before the GENIUS Act’s rule details are finalized, investors should review the stablecoins they hold and prioritize issuers with higher reserve transparency and faster compliance progress (such as USDC). Be wary of products whose reserve status is unclear.
Finally, stay patient and extend your time horizon.
Standard Chartered keeps its year-end Bitcoin target price at $100k, and Bernstein even offers a more optimistic $150k forecast. These predictions may not be accurate, but they reflect a consensus: the current bear market looks more like a mild institutional-level adjustment than a system-wide collapse like in 2018 or 2022. Bitcoin’s next halving is expected in April 2028. Historically, after halving events, a new bull-cycle often follows. For long-term investors, current price levels may provide a window to build positions in batches—assuming you can withstand the risk of further declines in the near term.

06 Conclusion
Warsh’s “self-reliance” speech, in essence, sets a clear policy boundary for the crypto market: the Fed will not pay for your investment losses. This is not suppression—it is a necessary lesson in the process of risk de-risking. For an industry that has experienced the 2022 FTX collapse and the 2023 Silicon Valley Bank turmoil, regulatory clarification is ultimately a net positive in the long run. It drives out bad actors, reduces systemic risk, and creates a fairer competitive environment for compliant participants.
In the short term, the two key variables determining market sentiment will be the July 28 FOMC meeting and the legislative progress of the CLARITY bill. In the medium term, when rates peak, when institutional capital returns, and how the stablecoin regulatory framework is implemented will jointly shape the next phase of the crypto market. For investors standing at the trough, what they most need may not be panic selling, but a sober understanding: the risks of crypto assets have never disappeared, but the logic behind their long-term value has not changed either. In this new era with no backstop, doing your own risk management is the only “lifebuoy.”