1440: Your Weekly Business Cheat Sheet
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Middle East Tensions Escalate Following Israeli Strikes on Iran
Israel launched preemptive strikes on Iran's nuclear and military sites, including the Natanz enrichment facility, killing top military commanders such as Gen. Hossein Salami and Gen. Mohammad Bagheri. This action, described by Israeli leaders as vital for national survival, marks the most significant strike Iran has faced since its 1980s war with Iraq. The International Atomic Energy Agency (IAEA) confirmed the targeting of Natanz.
In response, Iran's Supreme Leader Ayatollah Ali Khamenei vowed "severe punishment," leading to the launch of over 100 drones and missiles. These projectiles were largely intercepted by Israel and neighboring countries like Iraq and Jordan. The U.S. denied involvement in the Israeli strikes, with Secretary of State Marco Rubio confirming Israel's unilateral action, though the Trump administration had previously cautioned Israel and taken steps like pulling diplomats from Iraq.
The escalating tensions have significantly impacted global markets. Crude oil prices surged by nearly 8%, reaching levels not seen since early February, driven by concerns over potential disruptions to Middle East crude oil shipments, particularly through the Strait of Hormuz. Concurrently, stock market futures, including the S&P 500 and Nasdaq, experienced declines, reflecting heightened investor uncertainty. Regional airspace closures in Israel, Iraq, Iran, and Jordan underscored the widespread impact of the conflict.
Geopolitical Tensions Drive Oil Price Shock
Global oil prices have experienced a significant surge following Israel's recent attack on Iran. This sharp increase is now deemed a "bad shock" for the global economy, arriving at a particularly sensitive time. The immediate consequence is a heightened risk of a 'stagflationary shock', combining economic stagnation with inflation.
The direct impact on consumers is considerable, manifesting as increased income uncertainty and notably higher petrol prices. Households worldwide will likely face greater financial strain as energy costs escalate. This development underscores the volatility of global markets in response to geopolitical instability.
Economists project a negative outlook both in the short and long term. In the UK, specifically, there is an anticipated higher risk of additional taxation by October, further burdening consumers. This oil surge highlights the interconnectedness of international events and domestic economic stability.
Cathie Wood's firm repurchased Tesla shares, citing the EV giant's significant AI potential.
A House-passed bill is projected to cut the poorest Americans' income by $1,600 annually while boosting the wealthiest by $12,000, with low-income families facing losses from Medicaid cuts and work requirements.
Larry Ellison, Oracle's co-founder, has become the world's second-richest person, surpassing Jeff Bezos and Mark Zuckerberg.
The European Commission is considering a side declaration and farmer compensation fund to address French concerns and finalize the long-delayed Mercosur trade deal.
Donald Trump criticized Fed Chair Jerome Powell over high interest rates, despite a Supreme Court ruling upholding the Fed's independence from presidential removal.
Bitcoin Price Volatility Amid Geopolitical Tensions
Bitcoin's value experienced a significant downturn, plummeting over 3% to $103,556, following Israeli airstrikes on Iran. This military action, part of "Operation Rising Lion" targeting nuclear and military sites, triggered a widespread retreat from risk assets across global financial markets. The immediate consequence was a massive crypto liquidation cascade, wiping out over $1.16 billion in leveraged positions within a 24-hour period, marking Bitcoin's worst single-day performance since June.
The intensified Middle East tensions led to an indiscriminate selloff across the cryptocurrency market. Major digital assets, including Ethereum (ETH), XRP, Solana (SOL), and Dogecoin, also recorded sharp losses as investors abandoned high-risk holdings. The U.S. response, including the evacuation of diplomats and military families from Iraq, further underscored the escalating regional instability, contributing to sustained market uncertainty.
Despite the recent crash, technical analysis offers a nuanced perspective. On-chain data indicates that Bitcoin's funding rate briefly dipped into negative territory before reversing, a pattern historically associated with price rebounds. This suggests that the derivatives market is not yet overheated, and the unwinding of overly bearish leveraged positions could potentially act as a short-term catalyst for a price recovery.
SEC and Ripple Near Resolution
The US Securities and Exchange Commission (SEC) and Ripple have jointly filed a request with the Manhattan District Court, aiming to conclude their five-year legal dispute. This filing seeks the dissolution of an injunction against Ripple and the release of a $125 million civil penalty held in escrow. The proposed distribution allocates $50 million to the SEC and $75 million to Ripple.
The protracted legal battle began in 2020 when the SEC accused Ripple of raising $1.3 billion through an unregistered security sale. While Judge Analisa Torres previously ruled that some XRP sales did not violate securities laws, direct sales to institutional investors were deemed securities. A prior attempt to settle for a reduced $50 million penalty was rejected, with the judge requiring "exceptional circumstances" to vacate the final judgment, which the new filing aims to demonstrate.
If approved, this settlement would remove remaining operational limitations on Ripple and formally establish XRP's legal status in the US, potentially fostering broader institutional adoption. This development aligns with a recent trend where the SEC, under acting Chair Mark Uyeda, has retreated from aggressive enforcement actions against other crypto firms like Coinbase and Kraken.
Circle's USDC has officially launched on the XRP Ledger, enabling cross-chain transfers via XRP's auto-bridging feature and connecting traditional finance with crypto.
NFT trading volumes have significantly declined, leading to major marketplace shutdowns like Bybit and X2Y2, with Bybit's closure following a $1.5 billion security breach.
Crypto influencer Anthony Pompliano is reportedly planning a $750 million Bitcoin-buying fund, ProCapBTC, through a merger with a blank-cheque company amidst renewed market optimism.
Technical analysis suggests Ethereum (ETH) is poised for a breakout to $4,200, supported by a broadening wedge pattern and strong institutional interest, with ETH ETFs attracting more inflows than Bitcoin.
The Tron network set a new record in May, processing over $694 billion in USDT transaction volume, with a significant portion attributed to whale activity.
