Trading Desk Insights
The Federal Reserve held its benchmark interest rate steady at 4.25% to 4.50% for a fifth consecutive meeting. While expected, the decision featured two dissents in favor of a rate cut, the first such occurrence since 1993. Policymakers noted that economic activity appears to have moderated in the first half of the year, a shift from prior assessments of solid growth. Inflation remains somewhat elevated, the unemployment rate is low, and uncertainty surrounding the outlook continues. The Fed reaffirmed its commitment to a data-dependent policy path, citing the need to monitor evolving risks and incoming economic information.
Chair Powell emphasized that recent CPI data has weakened in quality and acknowledged it is too early to determine whether the data will be clearer by the next meeting. He reiterated that recent fiscal measures are not expected to deliver meaningful economic stimulus and noted that tariff-related price pressures are beginning to emerge, though still in early stages. No forward guidance was provided, and Powell maintained a cautious tone, stating that many uncertainties remain unresolved.
Bitcoin rebounded strongly following the FOMC decision, retesting the 119,000 level after briefly dipping on hawkish commentary. The rally came as market sentiment shifted toward renewed optimism about the potential for a US strategic Bitcoin reserve. A White House digital asset advisor reaffirmed plans to move forward with the initiative, adding to the bullish tone.
At the same time, corporate treasuries added nearly 28,000 Bitcoin over two days. Data from Capriole Investments showed institutional net buying accounted for 97% of transactions during that span, the highest level since August 2020.
Institutional interest is also accelerating in Ethereum. Corporate crypto treasury holdings have surpassed 100 billion dollars, with Ether holdings now exceeding 4 billion. Treasury firms and US spot ETH ETFs have driven sustained buying activity, and some analysts project that these institutions may eventually hold up to 10% of all Ether supply. The shift marks a growing recognition of Ethereum as a core treasury asset alongside Bitcoin.
Data from recent economic releases showed mixed signals. The Core PCE Price Index rose 0.3% month over month, matching expectations and indicating persistent but controlled inflation. The Employment Cost Index increased 0.9% quarter over quarter, reflecting continued wage growth. Unemployment claims came in at 218,000, which analysts point to as evidence of a still-resilient labor market.
The News Room
Trump’s Crypto Task Force Pushes for Clear Trading Rules Amid Rising Adoption
Trump’s digital asset task force is calling on U.S. regulators to clarify crypto trading rules and remove delays that slow financial innovation. The group urges the SEC and CFTC to define custody, registration, and oversight frameworks for digital assets. The push follows the passage of the GENIUS Act, with two additional bills heading to the Senate. This marks a broader government effort to modernize financial regulation as blockchain adoption expands.
JPMorgan and Coinbase to Enable Crypto Payments and USDC Rewards
JPMorgan Chase is partnering with Coinbase to allow credit card holders to buy crypto directly on the exchange starting this fall. The collaboration also enables customers to redeem Chase Ultimate Rewards Points for USDC by 2026, marking a first for major reward programs. Users will gain direct integration between Chase accounts and Coinbase to simplify access to digital assets. The initiative reflects a broader shift as banks adopt crypto-linked services and explore token-based finance.
Hong Kong Launches Transition Period for New Stablecoin Licensing Framework
Hong Kong will begin enforcing new stablecoin rules with a six-month transition period starting Friday, allowing issuers to apply for temporary licenses. Issuers must meet requirements such as full reserve backing, one-day redemptions, and a local presence. Non-compliant firms may be forced to shut down within months. The HKMA will limit license approvals initially and withhold applicant names. The new regime also includes strict KYC, transaction monitoring, and enforcement authority to ensure market integrity.
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Disclaimer
This research is for informational use only. This is not investment advice. Other than disclosures relating to Secure Digital Markets this research is based on current public information that we consider reliable, but we do not represent it is accurate or complete, and it should not be relied on as such. The information, opinions, estimates, and forecasts contained herein are as of the date hereof and are subject to change without prior notification. We seek to update our research as appropriate.
Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation. The price of crypto assets may rise or fall because of changes in the broad market or changes in a company's financial condition, sometimes rapidly or unpredictably. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur. Fluctuations in exchange rates could have adverse effects on the value or price of, or income derived from, certain investments. We and our affiliates, officers, directors, and employees, excluding equity and credit analysts, will from time to time have long or short positions in, act as principal in, and buy or sell, the securities or derivatives, if any, referred to in this research.
The information on which the analysis is based has been obtained from sources believed to be reliable such as, for example, the company’s financial statements filed with a regulator, company website, company white paper, pitchbook and any other sources. While Secure Digital Markets has obtained data, statistics, and information from sources it believes to be reliable, it does not perform an audit or seek independent verification of any of the data, statistics, and information it receives.
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