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Hong Kong has recently approved retail trading of Solana on a licensed exchange, marking a pivotal regulatory advancement for the cryptocurrency. This move could open doors for increased capital inflows and wider adoption of digital assets, as Hong Kong continues to position itself as a crypto-friendly hub.

Will this pave the way for other cryptocurrencies to gain similar approvals in Hong Kong? Or, will this move by Hong Kong truly impact Solana’s price?

In today’s financial recap:

Hong Kong greenlights Solana trading
Microsoft and Alphabet lead AI charge with revenue growth
Ethereum surges near $5,000
Rate cut in September still unclear

Hong Kong Greenlights Solana Trading, Unlocking New Crypto Demand

The TradeWatch: Hong Kong’s Securities and Futures Commission approved retail trading of Solana on a licensed exchange, which signals a significant regulatory development that could drive increased capital inflows and broader crypto adoption.

Unpacked:

OSL, a licensed crypto exchange in Hong Kong, gained regulatory approval from the SFC to offer Solana (CRYPTO: SOL) to retail investors.
This decision aligns with Hong Kong’s broader initiative to license venues and allow retail investors to buy select crypto tokens, demonstrating a trajectory of easing restrictions on crypto assets.
With Hong Kong’s asset and wealth management industry reporting $4.5 trillion in assets under management (AUM) at the end of 2024, Solana has been designated as an acceptable place for potential inflows if policymakers continue to approve new tokens and investment options.

Bottom line: This move by Hong Kong signifies a continued acceptance of cryptocurrency and may lead to further regulatory easing. The potential for increased capital flows into Solana highlights the importance of monitoring policy developments and market participation over the coming years.

Microsoft and Alphabet Lead AI Charge with Broad Revenue Growth

The TradeWatch: Major tech giants Microsoft and Alphabet showcase how AI transforms cloud, search, ads, and SaaS, fueling double-digit revenue growth and expanding addressable markets.

Unpacked:

Microsoft’s revenue rose 18% to $76.4 billion, with its cloud-based product revenue reaching $46.7 billion, marking a significant impact from AI workloads.
Alphabet’s second-quarter revenue grew 14% to $96.4 billion, driven by double-digit gains in Search, YouTube ads, subscriptions, and a 32% increase in Google Cloud revenue, showing how they are monetizing AI across platforms.
Investors can read about why Microsoft and Alphabet are 2 No-Brainer AI Stocks to Buy Right Now to better understand how AI interest translates to real revenue.

Bottom line: Microsoft and Alphabet’s strategic AI investments demonstrate durable advantages often missed by smaller AI plays. This validated AI exposure offers an AI flywheel that pulls in data, security, and developer services, then monetizes users directly through products and services.

Ethereum Surges Near $5,000

The TradeWatch: Ethereum briefly reached a new all-time high, nearing $5,000, fueled by ETF inflows and regulatory developments that signaled the growing institutional adoption of the asset after breaking past its all-time high mark set in 2021 which is correlated to the Ethereum price.

Unpacked:

U.S. spot Ethereum ETFs experienced unprecedented demand with inflows surpassing $1 billion in a single day, outperforming Bitcoin ETFs.
Corporate accumulation by Ethereum treasury companies has been a major factor, as BitMine Immersion, for example, holds over $7 billion in ETH.
Recent boom in Ethereum’s price was triggered by Federal Reserve Chair Jerome Powell’s comments hinting at potential interest rate cuts, while the GENIUS Act’s passage established a regulatory framework for stablecoins which predominantly operate on the Ethereum blockchain.

Bottom line: Ethereum’s rise reflects increasing mainstream acceptance and significant capital inflows from both institutional and corporate entities. These developments signal a maturing digital asset market with strengthened regulatory clarity.

September Rate Cut Still Unclear

The TradeWatch: St. Louis Fed President Alberto Musalem emphasized the need for more economic data before committing to a rate cut in September, noting that inflation remains above the Fed’s 2% target, according to a Reuters report.

Unpacked:

Musalem stated that current inflation running closer to 3% than 2% presents a potential persistence that needs to be further evaluated.
He highlighted the balance between leaning against inflation and the unrealized risk of potential labor market deterioration requiring policy adjustments.
Musalem said he will update his outlook continuously until days before the meeting to decide on his support for a rate cut, emphasizing the need for more data.

Bottom line: Musalem’s cautious remarks inject uncertainty into market expectations for a September rate cut. Traders should closely monitor upcoming economic data releases for signals regarding the Fed’s next move.

The Shortlist

Realty is a dividend champion demonstrating market resilience despite real estate sector pressures.
Nasdaq reached a valuation level not seen since the dot-com era, prompting caution amid tech stock concentration.
Bitcoin sinks after PPI comes in higher than expected while Treasury Secretary says ‘We’re not going to be buying that, but we are going to use confiscated assets and continue to build that up.’