A Bitcoin reserve bill from Republican Senator Cynthia Lummis continues to receive a groundswell of support, but at least one critic calls it a “disaster.” Plus, MicroStrategy files to raise $2 billion to buy more Bitcoin, and crypto-related startups continue to raise capital. Read on for more coverage.

Middle Eastern tension

• Throughout last week, the crypto market witnessed a downtrend. Bitcoin (BTC) dropped below $66,000 on July 31. The movement of $2 billion worth of BTC triggered investor angst.

• Following Israel’s assassination of a key Hamas leader in Tehran, reports from July 31 confirmed that Iranian authorities are considering a retaliation. 

• The Federal Reserve confirmed that benchmark interest rates remain unchanged in its latest meeting, but economic conditions point to a rate cut in September.

BTC reserve idea gains support

• During the Bitcoin 2024 conference, Republican Senator Cynthia Lummis proposed the “BITCOIN Act of 2024,” which calls for a cryptocurrency reserve. Up to 2,200 letters in support of the idea were sent to Congress.

• Attorney Moe Vela — a former White House senior executive — told crypto.news that Republicans are “blatantly pandering to a vital pool of voters.”

• “It demonstrates that the Senator and other bitcoin enthusiasts do not fully understand that Bitcoin is too risky, declining in market share, has no organizational infrastructure, and its anonymity literally means she is suggesting our nation co-invest with the possibilities of Kim Jong Un, Vladimir Putin, or other nefarious characters or organizations,” Vela said.

SEC backtracks on securities claims

• Meanwhile, the U.S. SEC dropped its securities allegations against multiple altcoins such as Cardano (ADA), Solana (SOL) and Polygon (MATIC) in the lawsuit against Binance. 

MicroStrategy augments BTC stash

• In an Aug. 1 post on X, MicroStrategy Chairman and Bitcoin proponent Michael Saylor confirmed that the software company purchased 169 more BTC with $11.4 million in July.

• Further, in its filing with the SEC, MicroStrategy revealed plans to raise $2 billion through sales of its Class A Shares for additional Bitcoin purchases. 

Spot crypto ETFs

• Spot Bitcoin and Ethereum (ETH) ETFs saw mixed flows last week. Interestingly, on Aug. 1, both classes of ETFs recorded joint net inflows for the first time since spot Ethereum ETFs launched. BTC ETFs saw $50.6 million in positive net flows, while ETH ETFs observed $26.7 million in net inflows.

• However, overall, both ETF classes recorded a bearish close to last week amid the market collapse. ETH ETFs witnessed a cumulative net outflow of $169.4 million, with BTC ETFs seeing about $80.7 million in negative net flows.

Crypto startups secure $107 million 

• Meanwhile, last week, 19 crypto-focused startups secured over $107 million from VC rounds. Crypto lending protocol Morpho witnessed the single largest funding round, totaling $50 million.

• Betting resource DuelNow raised $11 million, while defi project Daylight secured $9 million in a Series A funding round led by a16z. Also, AI infrastructure provider Hyperbolic Labs raised $7 million in a seed round.

Spot Bitcoin and Ethereum ETFs achieve milestone

• Spot Bitcoin and Ethereum exchange-traded funds in the U.S. recorded joint outflows for the first time on Aug. 2.
  
• The 11 spot Bitcoin ETFs in the U.S. experienced a net outflow of $237.4 million at the end of the trading day on Friday, Aug. 2. This is the largest outflow from these investment products since the beginning of May when they experienced $563.8 million in outflows.

• The nine U.S. spot Ethereum (ETH) ETFs also recorded a net outflow of $54.3 million on Aug. 2, led by Grayscale’s ETHE with $61.4 million in outflows.