This week's Federal Reserve rate decision will maintain the benchmark interest rate at 4.25%-4.50%. Powell stated that the current uncertainty requires the Fed to continue to wait; the economy is in a robust state, uncertainty is very high, and the Fed can act quickly at its discretion as events unfold. Trump has publicly criticized the Fed over 12 times this year, demanding an immediate rate cut. Trump stated that conversations with Fed Chair Powell are like 'talking to a wall'; he knows nothing and is always too late.
Back to the point:
The US Senate voted 48 to 49 against the (Stablecoin Innovation and Security Act) (GENIUS Act). This bill aimed to establish the first regulatory framework for the issuance of stablecoins (digital tokens pegged to fiat currencies like the US dollar) in the US. US Treasury Secretary Yellen harshly criticized the Senate's decision to block the progress of the (GENIUS Act), stating that the Senate failed to advance the (GENIUS Act), missing the opportunity to provide leadership in this area. For stablecoins and other digital assets to thrive globally, the US needs leadership; senators blocking US innovation must either step up to lead global competitiveness or watch digital asset innovation flow overseas. Establishing a complete market structure becomes an industry model; the demand for digital assets in US Treasury bonds could reach $2 trillion. The Office of the Comptroller of the Currency (OCC) issued Interpretation Letter 1184, confirming that national banks and federal savings associations can buy and sell custodial assets according to customer instructions and are allowed to outsource bank-permitted crypto asset activities (including custody and execution services) to third parties, provided they comply with appropriate third-party risk management standards. (The Wall Street Journal) reported that a Cb executive stated they would acquire the options platform Deribit for $2.9 billion.
CryptoQuant founder Ki Young Ju stated that his judgment two months ago about the end of the BTC bull market was incorrect, as institutional funds such as ETFs are flowing in massively, changing the market structure. With the participation of ETFs, MicroStrategy, institutions, and US government entities, it is essential to focus on the inflow of incremental institutional funds. Analyst Eugene Ng Ah Sio noted that the market may have entered the second phase yesterday, and it is time to reposition. The ETH mainnet has activated the Pectra upgrade, which is another significant upgrade following the 2022 Merge and 2024 Dencun upgrade, enhancing scalability, security, efficiency, and user experience. Standard Chartered's head of digital assets, Geoffrey Kendrick, stated on Thursday that the goal of BTC reaching $120,000 in the second quarter might be too low, due to the reallocation of strategic assets from US assets and accumulation by major holders like whales. These support factors are expected to push BTC to reach around $120,000 in the second quarter, with the upward trend continuing throughout the summer, bringing BTC closer to the year-low forecast of $200,000. BitMEX co-founder Arthur Hayes warned that the real focus is on the US Treasury; ignore the Federal Reserve, as it is not important. The real monetary policy manipulation occurs in the hands of Treasury Secretary Yellen, who is quietly reshaping global liquidity through repurchase and auction strategies to manage the US's ever-expanding debt burden. This liquidity flood, combined with the US's inability to control spending, is why BTC could reach $1 million by 2028.
MicroStrategy CEO Michael Saylor reiterated his call for Microsoft to adjust its capital allocation strategy to adopt BTC, create more shareholder value, and reduce corporate risk. Over the past five years, BTC's average annual increase has been 53%, while Microsoft's average annual return is about 6%. On May 8, the Federal Reserve's rate decision showed a 12-0 vote to maintain the benchmark interest rate at 4.25%-4.50%, marking the third consecutive time of holding steady. Powell stated at the press conference that the current uncertainty requires the Fed to continue to wait; in some cases, a rate cut this year is appropriate, while in others it is not. As events unfold, the Fed can act quickly at its discretion. Short-term inflation expectations have risen, while long-term inflation expectations remain aligned with the target. The economy is in a robust state, uncertainty is very high, and the risk of economic downturn has increased. Following the Fed's rate decision announcement, the market continues to believe that the Fed will cut rates before July, still expecting three rate cuts this year. Trump stated that everyone is cutting rates except the Fed, and conversations with Fed Chair Powell are like 'talking to a wall.' Powell is always too late; too late, Mr. Powell is a fool who understands nothing. Almost all cost prices have fallen, and there is almost no inflation; the rate cut is too late. Trump has publicly criticized the Fed over 12 times this year, demanding an immediate rate cut.
On May 8, the Bank of England lowered interest rates by 25 basis points, reducing the benchmark rate from 4.5% to 4.25%, marking the fourth rate cut in this round of easing. The UK and the US reached an agreement on the terms of the tariff trade agreement. The UK agreed to make concessions on imports of US food and agricultural products in exchange for the US reducing tariffs on UK agricultural products. Fox Business reporter Charles Gasparino stated that the White House is preparing agreements with India, Japan, South Korea, and Australia, expected to be similar to the one with the UK. BTC climbed back to $104,000 after 98 days, an increase of about 40% since early April. ETH saw a daily increase of nearly 25%, approaching the strength seen during the early 2021 bull market. The HB 2749 bill in Arizona has been signed into law, officially creating Arizona's first crypto reserve. The Strategic BTC Reserve Bill (SB 21) in Texas has completed all committee review procedures, and the final outcome of the bill is expected to be announced in the next three weeks. K33 Research stated that the summer crypto market in 2025 may differ from previous years, primarily driven by Trump's establishment of strategic BTC and digital asset reserves, laying a foundation for BTC's relative strength in the coming months.
Powell mentioned the word 'wait' 22 times at the press conference. The Fed's policy statement first referred to 'considering a wide range of economic data rather than a single indicator,' which the market interpreted as a potential shift toward easing when clear signs of economic slowdown emerge. Powell hinted that the Fed would only cut rates when there is substantial evidence of a significant slowdown in economic growth, and it could be a rapid rate cut. Former Fed Vice Chair Clarida stated that the market has pegged the probability of a US economic recession between 40% and 50%. Current pricing reflects expectations of three rate cuts of 25 basis points each in July, September, and December. The correlation between the crypto market and traditional financial markets continues to strengthen, and macro policy changes are becoming a key variable influencing digital asset prices. It seems as if overnight, BTC is nearing a new high, with ETH climbing the rankings. Many people this year have criticized the traditional cycles of the crypto market for being chaotic and often failing. So returning to the narrative of the Fed's rate cuts, this main line is very likely to remain valid; the difference between a rate cut in June and July is not significant, both can stimulate the market's gains. Another short-term main line is Trump; this week he reached an agreement with the UK, which may be the primary factor driving BTC close to a new high. Fox media reporters stated that the White House is preparing agreements with India, Japan, South Korea, and Australia, expected to be similar to that with the UK. The earlier sharp decline was due to concerns over the Fed pausing rate cuts and Trump's arbitrary tax increases. In the latter stages, the scenario of Trump wanting to reach agreements and the Fed resuming rate cuts is gradually normalizing, awaiting the return of a positive atmosphere for rate cuts. In simple terms, the first half of the year saw significant declines due to uncertainties from Trump and the Fed; whether these two factors can shift in the second half or recently will be crucial to determining how much increase can be expected. I hope for a market rebound.