As Bitcoin (BTC) Awaits Fed's Rate Decision, Renewed Doubt Emerges Over U.S. Crypto Regulation

As bitcoin (BTC) and the wider crypto market await the Fed's rate decision on Wednesday, an anomaly has emerged that could weigh heavily on market mood

Top Headlines

Senate Democrats appear to be pulling back on their support for landmark stablecoin legislation following President Donald Trump's active involvement in crypto, according to a report by CoinDesk on Tuesday.

Earlier this year, the Senate was expected to vote on the bipartisan legislation that would impose new regulations on stablecoins, aiming to complete the process by May. However, with Trump's increasing personal gains from his crypto ventures, Senate Democrats have become less supportive of the bill's passage.

When Trump took office, many observers anticipated a smooth transition for crypto regulation as part of a broader administrative agenda. Looking back, that optimism was probably misplaced.

The president's active involvement in digital assets through family-linked projects like WLFI and memecoins has drawn opposition, potentially slowing the regulatory progress.

This might lead investors to reprice regulatory uncertainty just as charts for BTC and XRP are signaling pullback risks.

Also, U.S.-based investors' demand for bitcoin appears to be weakening again, according to a recent analysis by CryptoQuant.

"Over the past month, the premium recovered significantly but is now dropping again — aligning with the recent BTC price correction," CryptoQuant contributor AbramChart said.

On the positive side, U.S.-listed spot bitcoin exchange-traded funds (ETFs) have recorded net inflows for three consecutive days.

Moreover, Acting CFTC Chairman Caroline Pham has revealed that the derivatives market regulator plans to observe a handful of tokenization pilot programs to evaluate the technology and assess how effectively tokenized assets function in the real world, as reported by crypto journalist Eleanor Terret.

The macroeconomic landscape also holds implications for the crypto markets. Taiwan dollar forward contracts are signaling extreme pressure on the U.S. dollar, suggesting a continuation of the greenback's decline against the Asian currency and major currencies like the euro.

This broad-based USD weakness may create a favorable environment for crypto. Increased volatility in the FX market could drive investors towards gold and potentially bitcoin, unless it leads to a broader risk-off scenario, in which case BTC might be affected.

Another bullish development is U.S. Treasury Secretary Scott Bessent's comments that U.S. rates now carry sovereign credit risk rather than just long-term growth and inflation expectations.

In essence, rates are artificially high due to a risk premium on the U.S. government itself, as pseudonymous observer EndGame Macro pointed out. This shift could continue, diverting investment away from U.S. assets and towards alternative avenues.

Top MemeCoin Balances Dumped After Devastating Price Crash

The price of the memecoin token, BigInt (BIG), has plummeted by 90% over the past 24 hours, causing a massive loss of funds for those who invested in the token. According to data from DeFiLlama, BigInt's total value locked (TVL) has dropped to just $6,600, a stark contrast to its previous high of $70,000 just a day ago.

The significant decline in BigInt's valuation can be attributed to a technical error that occurred during the migration of the BigInt chain. Due to the error, the BigInt token was not fully deployed on the new chain, leading to a substantial decrease in its price.

The memecoin's price crashed from $0.04 on Tuesday morning to lows of $0.003 at one point during the day, wiping out nearly 90% of its value.

As the memecoin's price plunged, the top three BigInt token balances on the Ethereum blockchain were liquidated. One balance, holding 1.8 million BigInt tokens, was completely emptied at around 4:30 AM ET.

Another large balance, amounting to 1.2 million tokens, was also fully liquidated around 7:00 AM ET. Finally, a third balance, holding 1 million tokens, was gradually emptied over several hours, beginning at 5:00 AM ET and concluding around 12:00 PM ET.

The massive price drop and subsequent liquidation of the top balances indicate the severity of the error and its impact on BigInt investors.

What to Watch

Token Events

Conferences

CoinDesk's Consensus is taking place in Toronto on May 14-16. Use code DAYBOOK and save 15% on passes.

Token Talk

By Shaurya Malwa

Derivatives Positioning

Market Movements

Bitcoin Stats

Technical Analysis

Crypto Equities

ETF Flows

Spot BTC ETFs:

Spot ETH ETFs

Source: Farside Investors

Overnight Flows

Chart of the Day

While You Were Sleeping

In the Ether