This week’s U.S. Senate Banking Committee hearing to consider edits to the Digital Asset Market Clarity Act has dozens of amendments to weigh, though it’s likely that almost all of them won’t survive the process of Thursday’s event.

Lawmakers have pushed forward a range of proposed changes for the market structure bill as it approaches the hearing known as a “markup,” from amendments that would establish government-ethics rules to others setting safe harbors for developers to one that would cut out a must-have protection for the decentralized finance (DeFi) sector, plus a number of other smaller, technical adjustments.

The list is particularly dominated by a few lawmakers’ names, including Democratic Senators Elizabeth Warren and Jack Reed. Their items are expected to be a rhetorical wish list as other members of the committee — mostly Republicans — seek to advance the bill without significant overhauls.

Each amendment will be discussed during the hearing and will eventually receive a vote, unless they’re withdrawn. A simple majority will be needed to adopt or reject an amendment. Eventually, the Banking Committee will vote to advance the bill itself.

Here are some highlights, according to a list of the proposals circulated ahead of the hearing:

• Senator Reed, a Rhode Island Democrat, wants to adopt some of the requests from bank lobbyists to further restrict stablecoin yields, according to one of his 18 amendments.
• He would also entirely scrap the section known as the Blockchain Regulatory Certainty Act, which shields software developers that don’t control people’s money from being regulated as money transmitters.
• On the same topic, Senator Catherine Cortez-Masto, a Nevada Democrat, wants to “protect software developers by creating a safe harbor from criminal liability for not registering as a money transmitter at the state or federal level.”
• Senator Chris Van Hollen, a Maryland Democrat, is pushing eight amendments, including one that would institute a major Democratic request: banning the president and other senior government officials from “owning, promoting or affiliating with” digital assets businesses.
• Senator Warren would more specifically “prohibit political corruption in banking applications and presidential bank ownership,” seeming to directly target the effort from World Liberty Financial — a company tied to President Donald Trump and his family — to obtain a U.S. banking charter.
• Warren, who is also seeking to cut out whole swaths of the current bill regarding the oversight of digital commodities, went farther afield with some amendments, trying to cap credit card interest rates and calling for bank supervisory records involving “Jeffrey Epstein and his co-conspirators.” (The bill itself does include some non-crypto provisions, including legislation targeted at housing championed by Senator John Kennedy, a Louisiana Republican.)
• Senator Mark Warner, a Virginia Democrat who has been at the center of illicit-finance negotiations involving DeFi, is proposing “a control test to determine when persons operating non-decentralized finance trading protocols are subject to” Bank Secrecy Act anti-money laundering obligations.
• On the Republican side of the committee, Senator Bill Hagerty from Tennessee is seeking a ban of central bank digital currencies (CBDCs) issued by the U.S. Federal Reserve. CBDC bans have already been pushed in various other bills by lawmakers, most recently in the House of Representatives’ bill to reauthorize the Foreign Intelligence Surveillance Act.

Thursday’s session to consider advancing the Clarity Act is likely already well planned for what the Republican majority will allow into the legislation. The last time the Clarity Act was on final approach to a markup in this same committee, it made it to this stage in which some 75 amendments were offered, though that hearing was postponed shortly after.

Previous wrinkles in the negotiation have since been ironed out over four months of talks, clearing a path for committee approval this week. Once that happens, this bill can be merged with the parallel effort that already cleared the Senate Agriculture Committee.

However, some significant changes are still expected after this week, including the effort to resolve the Democrats’ demand for a conflict-of-interest provision on cutting ties between government officials and the crypto sector, most notably seen with the president and his family. A meeting earlier this week on that ethics provision reportedly remained contentious, and Democrats including Senator Kirsten Gillibrand have said the Clarity Act will not get approved in the Senate without it.

Clarity’s advocates need to secure a number of Democratic supporters for the bill if it’s going to clear the 60-vote hurdle that’s standard in the Senate. Then the bill needs to get another approval from the U.S. House, which had already passed a similar bill last year.

In a Wednesday posting on social media site X, Coinbase CEO Brian Armstrong called the bill “strong” and said it “will benefit the American people by making the US financial system faster, cheaper and more accessible.”

“Mark it up,” he said.

Read More: Clarity Act, in the flesh, unveiled by U.S. Senate Banking Committee before hearing

Fidelity International, a global asset manager with about $1 trillion in client assets, has launched a tokenized liquidity fund assessed by Moody’s Ratings.

The new Fidelity USD Digital Liquidity Fund (FILQ) is issued on blockchain infrastructure linked to Chainlink and was launched through Sygnum Bank’s tokenization platform.

According to Sygnum, the fund received a AAA-mf assessment from Moody’s Ratings, a designation used for money market funds that signals strong credit quality and liquidity.

“This marks an important milestone in the evolution of capital markets, demonstrating how tokenized liquidity products can bring high-quality, yield-bearing liquidity on-chain in a regulated and scalable way,” said Fatmire Bekiri, Sygnum’s head of tokenization.

Cointelegraph approached Fidelity International for comment regarding the news but did not receive a response at the time of publication. Bermuda-based Fidelity International and US-based Fidelity Investments are separate companies that operate in different jurisdictions through their subsidiaries and affiliates.

Chainlink expands role in real-world assets

Fidelity International’s FILQ adds to Chainlink’s growing presence in the tokenized real-world asset (RWA) sector, as the platform is focused on connecting blockchain applications with external real-world data that cannot be accessed natively onchain.

As part of the collaboration, Chainlink will provide onchain net asset value (NAV) and distribution data for the fund, allowing international investors to track fund value and payouts in near real time.

Source: Chainlink

“By adopting Chainlink’s industry-standard platform to deliver verifiable, real-time NAV and distribution metrics, FILQ utilizes the tamper-proof transparency required to securely bridge traditional finance with the onchain economy,” said Fernando Vazquez, president of capital markets at Chainlink Labs.

JPMorgan will provide approved daily NAV data for the fund, Chainlink mentioned.

Related: DTCC to use Chainlink to power 24/7 collateral management network

Chainlink previously collaborated with both Sygnum Bank and Fidelity International for onchain NAV data integration in 2024, marking an earlier production use case for tokenized assets tied to the latter’s Institutional Liquidity Fund.

Tokenized funds expand across markets

The launch comes as large asset managers continue moving traditional cash and treasury products onto blockchain networks. Firms from BlackRock to Franklin Templeton have already debuted tokenized money market funds aimed at bringing short-term yield products onchain.

On Tuesday, JPMorgan filed with the US securities regulator to launch a tokenized money market fund on Ethereum, allowing stablecoin issuers to hold reserves backing their stablecoins.

Boston, Massachusetts-based Fidelity Investments also previously issued the Fidelity Digital Interest Token (FDIT), a tokenized money market fund in which Ondo Finance’s OUSG fund serves as the primary anchor investor and accounts for the vast majority of its assets.

Magazine: eToro founder timed Bitcoin top perfectly due to belief in 4 year cycles

Monthly trading volume on the Polymarket prediction market fell by about 8.9% in April, the first decline in month-to-month activity since August as rivals like Kalshi increased their market share.

Polymarket and its US-based trading application collectively generated more than $10.2 billion in volume in April, compared to more than $11.2 billion in March, according to data from Dune Analytics.

However, rival Kalshi’s April trading volume surged by about 13%, climbing to about $14.8 billion, Dune data shows. 

The total monthly trading volume for prediction markets also increased to about $29.8 billion in April from about $26.5 billion in March, an increase of about 12.4%.

Monthly volume figures for prediction markets. Source: Dune

Polymarket’s volume drop came as the company attempts to fully integrate US markets again, amid increased legal and regulatory scrutiny of prediction markets by US lawmakers after the sector experienced a meteoric growth during the 2024 elections.

To be sure, prediction markets are proving to be attractive to a slew of new competitors.

Prophet, an AI-native prediction market platform, last week launched its first live trading tranche, introducing a system where an AI model acts as the counterparty using real capital. Earlier this week, financial technology company MoonPay debuted an AI technology tool for trading strategies on prediction markets.

Related: Dutch users still access prediction markets despite Polymarket ban

Polymarket eyes US expansion as prediction markets come under fire

Polymarket is seeking to expand its presence in the US after exiting in 2022 as part of a settlement with the US Commodity Futures Trading Commission (CFTC), which barred the platform from allowing US residents on its main, global exchange.

In a bid to regain a foothold, the company launched a dedicated app for US customers in December 2025, albeit a platform that is siloed off from the Polymarket’s global platform and its liquidity.

Several US lawmakers and regulatory officials have raised concerns about insider trading on prediction markets, particularly in markets related to war, energy prices, and other geopolitically sensitive issues.

A letter from Senator Elizabeth Warren and other US lawmakers asks the CFTC to crack down on insider trading. Source: Senator Elizabeth Warren

In March, Senator Elizabeth Warren and more than 40 Congressional representatives wrote to the CFTC demanding a ban on government insiders using prediction market platforms to profit while in office or serving in an official capacity. 

“The CFTC maintains that event contracts are a type of swap subject to its jurisdiction, and, therefore, it should ensure that federal employees understand existing restrictions on prediction market insider trading,” the lawmakers said.

Wisconsin Attorney General Josh Kaul also filed lawsuits against Kalshi, Polymarket, and other prediction markets in April, accusing the platforms of violating state sports betting laws.

Magazine: Should users be allowed to bet on war and death in prediction markets?

KDDI, one of Japan’s largest telecom companies, is set to hold a 14.9% stake in local crypto exchange operator Coincheck Group (CNCK) after agreeing to a $65 million deal.

The telecom giant will subscribe for 28.5 million newly issued Coincheck Group shares at $2.28 each, Coincheck said on Wednesday. The deal is expected to close in June.

Coincheck and KDDI also signed what both firms called a business alliance covering customer referrals, revenue sharing and referral fees. The companies said the partnership is aimed at expanding crypto access in Japan through KDDI’s consumer channels and Coincheck’s trading, custody, staking and asset-management services.

KDDI has been building around crypto and Web3 since at least 2023, when it launched αU, a metaverse and Web3 service with a non-fungible token (NFT) marketplace and crypto wallet.

The company deepened that push through a capital and business alliance with HashPort, a Japanese Web3 wallet developer. The deal was tied to plans allowing users to convert Ponta loyalty points into stablecoins and crypto, and convert those assets into au PAY gift cards.

KDDI will receive registration rights for the shares and the right to nominate one non-executive director to Coincheck Group’s board at its next annual general meeting, expected in September.

Coincheck’s Dutch parent listed on Nasdaq in late 2024 under the ticker CNCK, after a delayed plan to go public through a SPAC deal. The company has since pushed into institutional crypto services, including through its acquisition of digital asset prime broker Aplo.

KDDI, as of December 2025, had over 72 million mobile subscriptions. J.P. Morgan advised Coincheck Group on the deal. De Brauw Blackstone Westbroek and Simpson Thacher & Bartlett acted as legal counsel.

Etoro reported a robust first quarter, with net income of $82 million, up 37% from the same period last year, as gains in commodities trading helped offset softer activity in crypto. The earnings beat was driven by a higher trading contribution and an improved profitability profile, even as the crypto segment faced headwinds that echoed broader industry softness.

The company announced adjusted EBITDA of $109 million, up 35% year over year, while net contribution rose 19% to $258 million. On the revenue side, funded accounts climbed 12% to 4.02 million, and assets under administration rose 15% to $17 billion. Etoro also held $1.3 billion in cash, cash equivalents and short-term investments as of March 31. In a related trend, Etoro said that assets under administration reached $18.7 billion in April, up 19% year over year, with total money transfers for the month totaling $1.4 billion, up 53% from a year earlier.

Commodities trading was the standout driver in the quarter, accounting for roughly 60% of trading commissions, with volumes up nearly fourfold versus a year earlier. The shift helped the firm diversify revenue streams even as crypto volumes and on-chain activity faced a softer backdrop. In addition to expansion in traditional markets, Etoro expanded its equities footprint, adding Japanese stocks to bring its exchange coverage to 26. The broker also activated its BitLicense to enable crypto trading in New York, a milestone that aligns with its strategy to bridge traditional finance with on-chain infrastructure. Separately, Etoro completed the acquisition of Zengo, a self-custodial wallet provider, on April 30, a move CEO Yoni Assia described as advancing the firm’s bridging objectives between fiat and crypto rails.

Crypto trading volumes retreat even as product innovation advances

Despite the resilience of its commodities business, Etoro’s crypto trading volumes deteriorated in April. The company disclosed that crypto trade volumes fell 32% year over year to two million trades, with the average invested amount per trade dropping 22% to $207. The softness in crypto activity comes amid a broader crypto market backdrop that has challenged exchanges and brokers to translate on-chain interest into sustainable revenue growth.

On the product side, Etoro has been moving to diversify its crypto offerings and improve user onboarding. The firm rolled out an AI-powered Agent Portfolios feature and deepened its collaboration with xAI, embedding Grok 4.2-powered market sentiment into Tori, its AI investing assistant. These enhancements aim to give users sharper market signals and a more interactive experience, even as overall trading volumes remain volatile.

Market observers noted that Etoro’s results sit within a broader pattern seen in listed crypto platforms. For instance, Coinbase reported a net loss of $394.1 million in the first quarter, its second consecutive quarterly loss, with revenue of $1.41 billion, reflecting a 40% drop in transaction revenue and a 13.5% decline in subscription and services revenue. The quarter also saw overall crypto market cap and trading volume retreat by more than 20% quarter over quarter. The juxtaposition highlights how firms with diversified revenue mixes—combining conventional asset classes with crypto—are navigating contrasting dynamics in traditional markets and digital assets.

Growth in users and on-ramp activity amid regulatory and strategic moves

Etoro’s top-line resilience rests not only on trading activity but also on user growth and capital deployment. The jump in funded accounts and the expansion of assets under administration suggest a broadening audience, supported by stronger cash reserves and liquidity. The company’s strategic push into New York crypto trading, backed by BitLicense authorization, signals a continued commitment to regulatory compliance as a pathway to broader market access. The Zengo acquisition further reinforces this trend by enabling on-chain self-custody options for users, potentially expanding wallet and custody capabilities across Etoro’s platform.

From a strategic standpoint, these moves indicate Etoro’s intention to blend the familiarity of traditional trading with evolving on-chain infrastructure. The addition of Japanese equities broadens its international reach, offering clients additional diversification options while leveraging the company’s growing global footprint. The April 30 closing of Zengo closes a loop in Etoro’s product strategy: a self-custody pathway that complements its hosted custody and trading experiences, providing a more complete platform for users who want direct control of their crypto assets.

Industry context and what to watch next

Etoro’s quarterly results arrive as the crypto sector grapples with a delicate balance: growing adoption of on-chain products and cross-asset wallets against persistent volatility in crypto volumes and macro headwinds in several geographies. The company’s mixed performance underscores the value of diversified revenue streams while spotlighting the fragility of relying heavily on active trading in a cyclic market.

Investors and users should monitor several developments in the coming quarters. First, whether commodity-driven revenue can sustain earnings momentum as crypto volatility persists. Second, the impact of product enhancements—such as AI-powered advisory features and improved sentiment analysis—on user engagement and average revenue per user. Third, regulatory movements, particularly in major markets, and how they shape the pace at which Etoro and peers can expand crypto trading and custody services. Finally, the effectiveness of the Zengo integration and the broader strategy to blend traditional finance with on-chain infrastructure will be key to assessing Etoro’s long-term growth trajectory.

As the sector evolves, Etoro’s Q1 performance offers a nuanced view: while crypto volumes may swing, a well-rounded platform that folds commodities, equities, and on-chain capabilities into a cohesive service can still deliver meaningful profitability and user growth. The question for readers and investors is how these dynamics unfold in the next few quarters, and whether the company’s regulatory-first approach and product diversification translate into durable, multi-asset momentum.

What’s next to watch: any sustained uptick in total money transfers and assets under administration, the cadence of new crypto product features, and the continued integration of Zengo’s wallet framework into Etoro’s platform. Those factors will help determine whether the current quarterly strength in non-crypto trading can offset ongoing pressures in crypto activity and what that means for Etoro’s overall margin profile in a shifting market.

A former Celsius executive is set to forfeit more than $1 million ahead of a sentencing hearing in the U.S. district court system, according to court filings. The U.S. Attorney for the Southern District of New York indicated that Roni Cohen-Pavon consented to a judgment of $1,070,000 representing proceeds traceable to his alleged crimes, with credit for funds—whether cash or cryptocurrency—held in Celsius that may be available through the platform’s bankruptcy process.

Cohen-Pavon pleaded guilty in September 2023 to fraud and conspiracy to commit price manipulation tied to Celsius’s CEL token. In advancing the case, U.S. authorities did not prescribe a specific sentence but requested the judge consider a potential sentencing reduction for substantial assistance rendered by the defendant. He is scheduled to appear for sentencing in the U.S. District Court for the Southern District of New York on Thursday.

The Celsius collapse stands among the crypto industry’s most consequential bankruptcies of 2022. It unfolded in a period that also saw the Terra ecosystem’s downfall and contributed to a broader wave of distress that culminated in FTX’s Chapter 11 filing. In a related development, former Celsius CEO Alex Mashinsky was sentenced to 12 years in prison in May 2025 after pleading guilty to commodities and securities fraud and agreeing to a forfeiture exceeding $48 million.

In April, Cohen-Pavon’s counsel sought leniency, asking for a sentence of time served, underscoring the cooperation agreement and Cohen-Pavon’s potential role in Mashinsky’s guilty plea. They argued that the Celsius executive had taken “full responsibility for his conduct.” In a letter to Judge John Koeltl, Cohen-Pavon stated, “I pleaded guilty because I am guilty … I participated in the manipulation of the CEL token. I did not stop it when I should have, and I did not leave when I could have. I take full responsibility for that.”

Key takeaways

• The court-approved forfeiture amounts to $1,070,000 linked to proceeds traced to Cohen-Pavon’s wrongdoing, with potential offsets for Celsius assets under bankruptcy.
• Cohen-Pavon pleaded guilty to fraud and conspiracy to manipulate the CEL token price in September 2023; sentencing factors will consider substantial cooperation with prosecutors.
• The Celsius case is part of a broader post-2022 enforcement narrative targeting crypto firms, market manipulation, and misrepresentation in crypto lending ecosystems.
• Separately, Judge Lewis Kaplan ordered that $10 million of assets tied to Sam Bankman-Fried be applied to his forfeiture obligations as part of the FTX proceedings, with Bankman-Fried sentenced to 25 years and a liability exceeding $11 billion; appeals remained pending as of the latest filings.
• In related filings, prosecutors and defense teams have highlighted cooperation and ongoing policy implications for crypto governance, market integrity, and bankruptcy treatment of digital assets.

Forfeiture, sentencing, and the enforcement context for crypto executives

The Cohen-Pavon matter illustrates how U.S. prosecutors pursue financial penalties that trace to illicit conduct in crypto markets and how those penalties interact with bankruptcy procedures. The $1.07 million judgment signals the government’s effort to recover proceeds believed to originate from manipulation schemes associated with a high-profile token tied to a bankrupt platform. The court filings also reflect a structural tension in crypto enforcement: penalties are pursued in parallel with complex asset recovery processes that cross into bankruptcy estates and digital asset holdings.

From a regulatory and compliance perspective, the case underscores several practical implications for crypto firms, exchanges, and platform operators. First, it highlights the risk that executives and employees can face aggressive enforcement actions for market manipulation and related fraud in crypto markets. Second, it reinforces the role of cooperation credits in sentencing, a factor that may influence corporate governance considerations, internal investigations, and the design of compliance programs. Third, it emphasizes the importance of transparent asset tracing and the treatment of digital assets in bankruptcy contexts, an area that has grown increasingly intricate as crypto assets are exchanged, stored, and audited in real-world estate-like processes.

Broader context: Celsius, Terra, and the evolving enforcement landscape

The Celsius collapse was a watershed event in 2022, signaling vulnerabilities in crypto lender models and the liquidity risks tied to yield strategies that relied on volatile token economics. Analysts note that the episode occurred in a tumultuous period that also involved the Terra collapse and major platform distress that culminated in the FTX bankruptcy. In the wake of these events, U.S. authorities intensified scrutiny over market manipulation, disclosures, and the legality of complex tokenized instruments used by crypto firms to attract and retain customers.

The broader enforcement environment continues to evolve, with agencies such as the Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) pursuing cases that touch on securities, commodities, and payment token questions. In parallel, the criminal-justice approach to enforcement intersects with regulatory regimes abroad, including the European Union’s Markets in Crypto-Assets Regulation (MiCA), which aims to harmonize licensing, investor protection, and market integrity standards. For institutions, this convergence reinforces the necessity of robust AML/KYC frameworks, rigorous internal controls, and clear governance structures to manage legal risk across cross-border operations.

Enforcement actions tied to the SBF case and implications for policy

In a separate but contemporaneous action, SDNY Judge Lewis Kaplan ordered that $10 million in assets associated with Sam Bankman-Fried be applied toward his forfeiture agreement. Bankman-Fried, who was sentenced to 25 years in prison, faces a total liability exceeding $11 billion for the fraud and misappropriation of customer funds. As of the latest proceedings, his attempts to seek a new trial had been denied, and his appeal to overturn the conviction remained under review by the Second Circuit. The Kaplan decision highlights how asset recovery and forfeiture play a central role in high-profile crypto prosecutions, alongside traditional sentencing considerations.

For policymakers and compliance professionals, the Bankman-Fried case and related Celsius developments illustrate ongoing tensions between rapid innovation in crypto markets and the need for robust oversight. The enforcement trajectory reinforces the expectation that regulators will scrutinize token economics, disclosures around custody and custody arrangements, and the handling of customer funds in the context of corporate restructuring. It also underscores the importance of coordinated actions across jurisdictions as regulators pursue cross-border asset tracing and restitution in complex digital-asset ecosystems.

Looking ahead, market participants and observers should monitor how potential sentencing outcomes, asset-recovery decisions, and regulatory developments interact with ongoing bankruptcy proceedings, licensing considerations, and international regulatory alignment. The convergence of criminal enforcement, bankruptcy law, and regulatory oversight is likely to shape governance standards for crypto firms, influence licensing decisions, and inform AML/KYC policy design in the period ahead.

Closing perspective: The sequence of cases surrounding Celsius and FTX-era executives reinforces a clear priority for enforcement authorities—establishing accountability for market manipulation, fraud, and misuse of customer assets within digital-asset platforms. As regulatory frameworks mature and cross-border cooperation intensifies, institutions engaging in crypto activities should expect continued scrutiny, greater emphasis on compliance infrastructure, and a measured but persistent risk of execution actions tied to misconduct in crypto markets.

Key takeaways:

• A successful Hyperliquid whale opened a $70 million short position, but data suggests this is a technical move.
• Rising oil prices and Fed liquidity injections could devalue US Treasuries, boosting Bitcoin as a scarce macro asset.

Bitcoin below $80,000 as Hyperliquid whale flips bearish on crypto

Bitcoin (BTC) failed to sustain bullish momentum on Wednesday, retreating below the psychological $80,000 level. Traders grew anxious as persistently high oil prices applied pressure to inflation and consumer spending. A Hyperliquid whale with $42 million in historical profits flipped bearish, leaving investors to question whether the recent rally is losing its foundation.

Hyperliquid whale 0x8def…992dae profit/loss, USD. Source: CoinGlass

The Hyperliquid whale at address 0x8def…992dae recently opened a $70 million bearish position on various cryptocurrencies and synthetic tokens tied to major technology stocks. According to the Hyperdash trading and data platform, the address belongs to Loracle, an early developer within the Hyperliquid ecosystem. This account began betting more aggressively in September 2025.

Related: Bitcoin price targets $79K as US PPI inflation hits highest since 2022

Interestingly, the majority of this whale’s past profits were generated through bullish bets, including several successful trades over the last month. A long position in Bitcoin, Zcash (ZEC), and Toncoin (TON) closed on Monday, netting a $9.2 million profit in just two weeks. On Thursday, the same entity secured a $3 million profit on bullish synthetic tokens linked to oil prices after a nine-day hold.

Hyperliquid whale 0x94d373…c933814 position on May 13. Source: app.trade.xyz

Over the past week, this whale flipped bearishly by accumulating a massive $49 million short position on HYPE. These bets on downside price movements expanded to include a $12.5 million short in Bitcoin, alongside $8 million in synthetic tokens tracking chipmaker Sandisk (SNDK US) and the Nasdaq-100 Index.

Why is the whale shorting BTC, HYPE, and tech stocks?

This bearish assessment is further supported by a $1.7 million long position in a gold-backed stablecoin. However, trade data analysis from app.trade.xyz reveals an algorithmic trading style, with positions typically lasting less than a week. These findings suggest the whale is reacting to short-term technical moves rather than a fundamental breakdown in risk-on assets.

Brent crude oil (left) vs. US 5-year Treasury yield (right). Source: TradingView

The ongoing war in Iran has pushed Brent crude oil prices above $100. This spike likely pushes the US Federal Reserve to expand its balance sheet as US Treasury yields spiral out of control. As US fiscal budget issues mount, investors are increasingly incentivized to seek shelter in scarce assets, especially since higher inflation expectations reduce the appeal of fixed-income investments.

US Federal Reserve total assets, USD millions. Source: St Louis Fed

The US Fed has begun accumulating bonds and mortgage-backed assets to relieve pressure on financial institutions. While providing liquidity eases immediate concerns, this intervention causes inflation to accelerate. This remedy, though efficient, curbs the potential for expansionist monetary policies, as the Fed has less room to trim interest rates effectively.

Even if Bitcoin and tech stocks initially react negatively to signs of an overheating economy, traders will likely eventually exit fixed-income investments as the expansion of the monetary base becomes evident. Lower demand for US Treasuries indicates eroding trust in monetary policy, which serves as a positive driver for Bitcoin over the medium term.

Ultimately, little reason exists to fear this Hyperliquid whale’s bearish bets, even when accounting for the entity’s successful track record.