#夏日创作营 Crypto prices are sluggish, and the new remarks from the Fed chairman say the crypto industry “must rely on itself”—where does the next phase of the crypto market go?

On July 15, 2026, Federal Reserve Chairman Kevin Warsh dropped a major bombshell for the crypto industry during a congressional hearing—he said the Fed has no intention of backstopping the crypto market. If stablecoins blow up, don’t expect the central bank to step in to provide assistance. Against this backdrop: Bitcoin has already been cut in half, falling from the $126k peak in October 2025 to around $640,000. The Fear and Greed Index has long stayed in the “Extreme Fear” zone around 22. And in June, US spot Bitcoin ETFs recorded the largest monthly net outflow in history.
Research suggests Warsh’s remarks may look like a bearish shock on the surface, but in reality it is a long-delayed “risk-clearing” signal. It punctures the crypto market’s long-held illusion of an implicit regulatory backstop and forces the industry back to fundamentals. In the short term, volatility in the market will be dominated by the July 28 FOMC meeting and the legislative progress of the CLARITY Act; in the medium to long term, the interest-rate path, institutional capital flows, and the implementation of stablecoin regulatory frameworks together will determine whether the crypto market can complete a new cycle of value re-pricing under the new normal of “relying on itself.” This article, from four dimensions—current coin prices, Fed policy signals, stablecoin risks, and legislative standoff—maps out the real situation and future direction of the crypto market for ordinary investors.
01 A price “halving”: the chill beneath the data
For crypto investors in 2026, it is a year full of tests. In mid-July, Bitcoin’s trading price hovered around $64.7 thousand [1]. Compared with the $1260 thousand record high set in October 2025, the drop is already more than 48%. Ethereum is facing similarly grim conditions: the price has fallen to roughly the $1,900 range, a sharp retreat from last year’s high. Even though Bitcoin briefly rebounded to above $60k in early July, market confidence remains fragile, with the Fear and Greed Index long lingering in the “Extreme Fear” zone of 22-23.
More worrying, however, is the continued bleeding of liquidity. In June 2026, US spot Bitcoin ETFs recorded $4.06 billion in net outflows, the largest monthly redemption since the product was launched in January 2024. The data shows that hedge funds and broker-dealers are the main forces behind this round of selling—hedge funds reduced holdings by about 31,400 BTC, while broker-dealers cut about 18,800 BTC. Even Standard Chartered, the “flag-bearer for Bitcoin bulls,” earlier this year dramatically lowered its Bitcoin target price for end-2026 from $150k to $100k and warned that Bitcoin could fall to around $50k before stabilizing.
02 Warsh’s “no rescue” signal: the crypto world must rely on itself
At the congressional hearing, Warsh was asked a pointed question by Representative Brad Sherman: if the crypto industry faces a bank-run or redemption squeeze, would the Fed intervene the way it rescued money market funds in 2020? Warsh’s answer was clear and forceful—he said the Fed does not want to rescue anyone, and the crypto market is no exception. But he also refused to promise to “never” step in, leaving room for policy maneuver.
To understand the true meaning of that statement, it needs to be broken down. Warsh’s warning is not targeted at decentralized crypto assets themselves like Bitcoin or Ethereum. In fact, the Fed has no legal tools or policy channels to “stabilize” these tokens. His real focus is the stablecoin market, which has grown to a size of $310 billion. As a bridge connecting traditional finance and the crypto world, stablecoins carry risks with very strong transmission effects. In the March 2023 collapse of Silicon Valley Bank, USDC briefly decoupled to $0.88 because part of its reserves were held at SVB, and the entire stablecoin ecosystem was thrown into turmoil. Ultimately, it was the FDIC’s “unexpected” rescue of depositors that restored USDC’s peg. This is the only time in crypto history that a stablecoin ecosystem has been indirectly “saved,” but Warsh clearly doesn’t want it to become a precedent.
Warsh’s remarks convey a core message: the crypto industry can no longer count on the central bank acting as the lender of last resort during crises. What does that mean for the market?
First, stablecoin issuers must build more robust reserve mechanisms;
Second, investors must recognize that the “risk of going to zero” for crypto assets is real and there is no backstop;
Finally, the improvement of the industry regulatory framework will accelerate—because regulators will not tolerate a financial sector that is “too big to fail” but remains unregulated from continuing to expand unchecked.
03 Interest-rate clouds: the July FOMC meeting is the real “price driver”
Compared with Warsh’s “no rescue” rhetoric, the tool he holds that truly affects the crypto market is interest-rate policy. He officially took office as Fed chairman on May 22, 2026. The June FOMC meeting was his first policy meeting since taking office, keeping rates unchanged at 3.50%-3.75% [7]. However, the dot plot shows that out of 18 Fed officials, as many as 9 expect to raise rates at least once between 2026 and beyond, and no one expects a rate cut within the year. Even Danske Bank predicted that the Fed would raise rates once each in December 2026 and 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 does not pay interest; holding it means foregoing the risk-free returns of dollar deposits or Treasury bills. In an environment where rates are above 3.5%, that trade-off is not attractive for institutional capital. In addition, since Warsh took office, he has signaled a move to reduce forward guidance and give policy more discretion. That implies lower certainty around market expectations of Fed actions, which could also push volatility higher.
The FOMC meeting on July 28-29 is therefore the most critical market event this month. In congressional testimony, Warsh refused to label the latest weak inflation data as a “victory,” suggesting that the Fed’s fight against inflation is not over. If the meeting releases a more hawkish signal, the crypto market could face fresh downside pressure; conversely, any signs of a softer stance could become a catalyst for a short-term rebound.
04 Legislative deadlock: the CLARITY Act and the fight 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 reserves made up of 100% high-quality liquid assets, monthly audits, and bans paying yields to retail users. The act sets a rulemaking deadline of July 18, 2026, and the FDIC and OCC are already accelerating the drafting of the relevant details.
However, the more critical CLARITY Act is stuck in deadlock in the Senate. The bill aims to clarify how jurisdiction is split between the SEC and the CFTC—fully decentralized tokens would fall under CFTC oversight, while tokens with securities characteristics would continue to be overseen by the SEC. The biggest controversy preventing the bill from passing is the issue of stablecoin yields: traditional banking groups push for a total ban on stablecoin yield payments, arguing that such yields are essentially unregistered securities and carry run risk; while crypto-native platforms (such as Tether and Circle) and DeFi protocols argue that banning yields would force innovation offshore and would weaken the United States’ competitiveness.
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 investors will be greatly reduced. If Congress ultimately allows yield products at the institutional/qualified investor level, it could open new growth space for compliant stablecoins. Polymarket’s prediction market shows the probability of the CLARITY Act passing within 2026 has fallen from 80% to roughly 55%-70%. Uncertainty about the legislative outlook itself is the blade hanging over the market.
05 How investors should respond: how to navigate in the era of “relying on yourself”
In the face of Warsh’s “no rescue” declaration and continued market weakness, ordinary investors need to adjust expectations and calibrate their strategies.
First, reduce leverage and control position sizes.
In an environment where interest rates remain high and ETF fund flows keep seeing outflows, the market lacks fuel for sustained gains. Bitcoin has formed key support in the $58,000-$60,000 range. If that support breaks, the next move could be a drop toward $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 relatively 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 money flows back in, rebounds often come quickly and violently. Rather than trying to guess the bottom price, it is better to continuously track ETF daily net inflow data—this is the most direct indicator of whether institutional sentiment is turning.
Third, stablecoin risk is worth treating as a separate red flag.
Before the fine rules of the GENIUS Act are finalized, investors should review which stablecoin types they hold. Prefer issuers with higher reserve transparency and faster compliance progress (such as USDC), and stay cautious about products where reserve details are opaque.
Finally, stay patient and extend the time horizon.
Standard Chartered keeps its Bitcoin end-of-year target price at $100k, unchanged; Bernstein even gave a more optimistic prediction of $150k. These forecasts may not be accurate, but they reflect a shared view: the current bear market looks more like a moderate institutional adjustment than a systemic collapse like 2018 or 2022. Bitcoin’s next halving is expected to arrive in April 2028, and historically, halving events are often accompanied by a new bull-cycle wave. For long-term investors, the current price level may offer a window to build positions in batches—provided you can withstand the risk of further near-term declines.
06 Conclusion
Warsh’s “relying on yourself” speech, in essence, draws a clear policy boundary for the crypto market: the Fed will not underwrite losses on your investments. This is not suppression; it is a necessary lesson in the risk-deleveraging process. For an industry that has experienced the 2022 FTX collapse and the 2023 Silicon Valley Bank turmoil, regulatory clarification is, in the long run, actually positive—because it drives out bad actors, reduces systemic risk, and creates a more level competitive environment for compliant participants.
In the short term, the FOMC meeting on July 28 and the legislative progress of the CLARITY Act will be the two key variables that determine market sentiment. In the medium term, when rates peak, when institutional capital returns, and how the stablecoin regulatory framework will be implemented will jointly shape the next configuration of the crypto market. For investors standing at rock bottom, what they may most need is not panic selling, but a clear realization: the risk of crypto assets has never disappeared, but the logic behind their long-term value has not changed. In this new era with no backstop, doing your own risk management is the only “lifebuoy.”