Bitcoin Reaches $64,000 and Kimi K3 AI Launch

Bitcoin climbed to $64,000 this week amid various market developments, including calls for anti-corruption measures in the CLARITY Act and the launch of the Kimi K3 AI model.

Bitcoin rose to $64,000 this week, Democratic senators called for anti-corruption measures to be added to the CLARITY Act, miners ignored BIP-110, and the new AI model Moonshot AI crashed the semiconductor market, among other events of the week.

Neutral Sentiments

Bitcoin started the week with a decline. A correction due to the renewed conflict between the U.S. and Iran, along with overall macroeconomic uncertainty, pushed the leading cryptocurrency down to $61,000.

However, on July 14, following the release of the CPI in the U.S., the crypto market began to recover. The core inflation rate, excluding food and energy, was reported at 2.6% year-over-year, compared to the expected 2.8%—indicating a stronger-than-expected slowdown in inflation.

Positive remarks from Federal Reserve Chair Kevin Warsh during his testimony before Congress also contributed to this recovery.

Bitcoin reached a local peak of $65,500 on the evening of July 15, after which it began to consolidate.

On Friday, July 17, digital assets fell alongside traditional markets due to the semiconductor crisis, but over the weekend, the leading cryptocurrency managed to recover some of its losses.

As of this writing, Bitcoin is trading at $64,500, having gained about 1% over the week.

Hourly chart of BTC/USDT on Binance. Data: TradingView.

Assets in the top 10 by market capitalization showed mixed dynamics. Ethereum rose by 4% to $1,850, while HYPE lost about 8%.

Source: CoinMarketCap.

Amid easing inflation expectations in the U.S., investors continued to return to exchange-traded funds (ETFs). From July 13 to 17, spot Bitcoin ETFs attracted a net $75.5 million—marking the second consecutive "green" week.

Source: SoSoValue.

Ethereum funds mirrored the performance of Bitcoin-based instruments, with net inflows of $105.5 million.

The crypto fear and greed index rose to 28 points but remains in the "fear" zone.

Source: Alternative.me.

The total market capitalization stands at $2.27 trillion. Bitcoin's dominance is at 57%, while Ethereum's share is 9.9%.

Anti-Corruption Measures for the CLARITY Act

Democratic Senators Chris Murphy, Jeff Merkley, and Chris Van Hollen opposed the current version of the CLARITY Act, citing the absence of anti-corruption measures.

They argue that the bill establishes a regulatory framework for digital assets but fails to eliminate conflicts of interest related to President Donald Trump's cryptocurrency business and that of his family.

They proposed including provisions from the MEME Act or the End Crypto Corruption Act, which would prohibit the president, vice president, cabinet members, senior federal officials, congress members, and their immediate relatives from owning cryptocurrency businesses, promoting digital assets, or profiting from them.

The CLARITY Act aims to delineate the powers of the SEC and CFTC and establish a federal regulatory framework for the digital asset market.

"It's not enough to prepare an amendment or a separate anti-corruption law. It needs to be truly stopped," Merkley stated.

According to Americans for Financial Reform, consideration of the proposal is expected to begin on July 20. A procedural hurdle of 60 votes will be required to overcome.

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Unwanted BIP-110

Over a two-week period, no major mining pool signaled support for BIP-110. The acceptance rate remained around 1%, well below the required 55%.

This initiative aims to limit non-payment data in Bitcoin transactions, including OP_RETURN and certain scripts.

The voluntary activation threshold will expire at block height #961,632 in early August. If support is insufficient, new rules could only be adopted by nodes that choose to implement them in September.

Due to minimal support, the initiative has faced criticism from Strategy founder Michael Saylor and Blockstream co-founder Adam Back. Back directly addressed BIP-110 supporters, acknowledging their desire to protect the network from spam but disagreeing with the proposed method.

Meanwhile, Runestone founder Leonidas introduced the DOG Mode client. Unlike BIP-110, this solution requires only one miner's approval—no majority vote is needed.

This solution increases the transaction limit from 400,000 to 3.9 million WU and reduces the "dust limit" from 294-546 satoshis to 1 satoshi, simplifying the sending of Ordinals and Runes. The developer estimates around $25 million in "excess" satoshis.

"Bitcoin Core and Bitcoin Knots have imposed rules for years that consensus does not support. The DOG army no longer waits for permission—it's time to remove excessive restrictions," Leonidas wrote.

EthSystems Privacy Service

The Ethereum Foundation's privacy team has spun off into a commercial company called EthSystems.

The startup aims to provide blockchain solutions for institutional clients and tools based on zero-knowledge proofs, enabling banks and asset managers to conduct large transactions in Ethereum while concealing position details and client data.

The project is backed by Ethereum co-founder Joseph Lubin, as well as companies BitMine and SharpLink. EthSystems co-founders are former Ethereum Foundation employees Mo Jalil, Oscar Toren, and Aryaman Challani.

The company's business model is based on paid consulting and custom system development. EthSystems representatives explained that large businesses require a commercial counterparty for collaboration, rather than a non-profit foundation. However, the startup will continue to publish protocol specifications publicly.

Also on ForkLog:

Meta employees accused the company of using AI in layoffs.
Japan recognized crypto assets as financial instruments.
Visa launched a stablecoin platform for banks.
Developers proposed protecting Bitcoin rights after a quantum hack.

Formidable Kimi K3

Chinese Moonshot AI unveiled the largest open model, Kimi K3, featuring 2.8 trillion parameters, native vision, and a context of 1 million tokens.

The solution is built on Kimi Delta Attention and Attention Residuals. Its sparsity is managed by Stable LatentMoE, where 16 out of 896 experts work simultaneously—resulting in a 2.5 times increase in efficiency compared to K2.

Source: Kimi blog.

Developers claim that in overall benchmark scores, Kimi K3 ranked just below proprietary models Claude Fable 5 and GPT 5.6 Sol.

The model can conduct lengthy engineering sessions with minimal human involvement, navigate large repositories, and manage terminal tools. As a demonstration, the system independently designed a chip for a neural network based on its own architecture.

The launch of Kimi K3 triggered a sell-off in chip manufacturers' stocks. On July 17, shares of chipmakers and AI companies fell globally on Friday. Asian firms were hit hardest: the Taiwanese index dropped over 6%, while Japan closed down 4%. In the U.S., the sell-off continued, with Nasdaq declining by 1.5%, marking the worst session of the week.

Shares of Chinese neural network developer Z.ai plummeted nearly 30% in Hong Kong. Nvidia temporarily lost its title as the world's most valuable company to Apple.

Investors likened the situation to the "DeepSeek effect." In January 2025, the AI startup released model R1, causing Nvidia to lose around $590 billion in market capitalization in a single session.

Weekly Recap: Bitcoin at $64,000 and New AI Model Kimi K3