Key takeaways:
- On May 15, the market moved from cautious optimism to resilience test mode. Bitcoin fell below 80,000. USD, Ethereum fell to around 2.2 thousand. USD, and the increase in US bond yields began to weigh on stocks and crypto.
- The most important positive signal for the industry came not from the charts, but from regulation and infrastructure. The CLARITY Act passed the Senate Banking Committee, and BlackRock, Ondo, JP Morgan, Mastercard and Ripple have shown that tokenized real assets are increasingly entering traditional finance.
From the beginning of the week, between May 10 and May 14, the market looked strong, but on Friday, May 15, it became noticeably more nervous. Bitcoin failed to maintain the level of 80,000. USD, Ethereum continued to lose against BTC, and the American indices began to reflect previous gains. The main problem was not the correction itself, but its cause: rising bond yields, more expensive energy, stronger inflation data and an increasingly uncertain Federal Reserve policy path.
The stock market is losing momentum as bonds take over again
As recently as May 14, the S&P 500 and Nasdaq were benefiting from demand for large technology companies and AI narratives. A day later, the situation changed. Reuters indicated that global stock markets fell on May 15, and the yield on 10-year US bonds rose to 4.575%. In practice, this means that investors have begun to re-price the risk of a longer period of high interest rates.
This is also important for cryptocurrencies. As bond yields rise, safer instruments become more attractive. Bitcoin may continue to serve as an alternative asset, but in the short term it competes for capital with the bond market, cash and money market funds. The higher yields go, the more justification the market needs to maintain high valuations of risky assets.
CPI and PPI inflation have changed the context for the Fed
Inflation data was the main reason why earlier optimism became less convincing. CPI, i.e. the consumer price index, increased by 0.6% in April. month to month and 3.8 percent year to year. Core inflation, excluding food and energy, rose 0.4%. per month and 2.8 percent annually. Energy increased by 3.8%. in April alone and by as much as 17.9 percent year to year.
An even stronger signal came from PPI, the producer price index. This is an indicator of how prices change for companies before the full cost reaches consumers. The BLS reported that final demand PPI rose 1.4% in April. month to month and 6.0 percent year to year. This was the largest monthly increase since March 2022.
For the market, this means one simple thing: the Fed has less room to quickly cut rates. If companies pay more for energy, transport, services and raw materials, some of these costs may later pass on to retail prices. This complicates a scenario in which the central bank quickly eases policy and risky assets receive strong support from lower rates.
The Fed is divided, and a change in chairman increases uncertainty
The Federal Reserve recently kept its key interest rate range at 3.50-3.75%, but the vote itself showed a wider divide than usual. Stephen Miran wanted a cut of 25 basis points, or 0.25 percentage points. Beth Hammack, Neel Kashkari and Lorie Logan, meanwhile, opposed language suggesting future easing of the policy.
In addition, there is a change at the top of the Fed. The US Senate confirmed Kevin Warsh as the new chairman of the Federal Reserve. The Associated Press notes that he takes office at a difficult time: inflation remains above the Fed’s target, fuel prices are pushing up price pressures and the decision-making committee is the most divided in decades.
This may increase market volatility. Investors will no longer only be looking at when the Fed will cut rates. They will analyze whether the new chairman will maintain the independence of the central bank, how he will approach communication and whether the hawkish wing of the Fed will start putting more pressure on maintaining high rates or even the possibility of further increases.
Bitcoin loses 80 thousand. USD, and ETFs no longer give a simple signal
Bitcoin defended the psychological level of 80,000 for several days. USD, but on May 15 it was slightly below this limit. This does not automatically mean a break in the trend, but it shows that institutional demand now needs to be balanced by a stronger dollar, higher yields and weaker risk appetite.
An important change concerns ETFs. Previously, inflows into spot Bitcoin ETFs were one of the main arguments for BTC’s resilience. The latest updates, however, are less clear. According to Lookonchain data published on Binance Square, on May 14, spot Bitcoin ETFs recorded a net outflow of 8,158 BTC, or approximately USD 653 million, and on a 7-day basis, the outflow was expected to amount to 16,585 BTC, or approximately USD 1.33 billion. For Ethereum, ETFs showed an outflow of 17,030 ETH in one day.
This is a significant narrative correction. Bitcoin is not falling rapidly, but the market is no longer as cleanly supported by ETFs as before. If runoff continues, levels will remain near 80,000. USD will require more demand from spot investors, companies and long-term holders.
Ethereum continues to look weaker. The drop in ETH to around USD 2,220 shows that the market has not gone into full risk-on mode. When investors really increase their appetite for risk in crypto, Ethereum and larger altcoins tend to gain more than Bitcoin. BTC is still relatively stronger this time.
The CLARITY Act passed in committee. This is the biggest positive signal of the week
This does not mean the end of the process yet. The bill will now go to the full Senate, where there could still be a fierce lobbying fight. Among other things, the dispute concerns how widely cryptocurrency companies will be able to offer rewards or incentives tied to stablecoins. Banks fear that too liberal regulations will create competition for traditional deposits.
Galaxy Research indicates that Section 404 of the new bill has been renamed “Prohibiting Interest and Yield on Payment Stablecoins.” This sounds like a hard ban, but the content is more complex. The project is intended to limit payments that are economically similar to interest on a bank deposit, but leaves room for rewards related to real user activity, such as wallet use, settlements, loyalty or participation in the infrastructure.
This could be a breakthrough for the industry. Clear rules for stablecoins, exchanges, brokers, developers and digital assets could reduce regulatory risks that have hampered larger institutions for years. However, yields and inflation are more important for the market in the short term. Regulations may improve fundamentals, but they will not eliminate macro pressure.
RWA is maturing faster than token prices
The strongest long-term topic of the week is RWA, i.e. real-world assets, real assets transferred to the blockchain. According to RWA.xyz, the global tokenized asset market showed $26.71 billion in distributed asset value, and stablecoins had a total value of $299.30 billion. This shows that tokenization is no longer just an experiment of niche DeFi protocols.
BlackRock has shown the direction in which this market can go. The SEC filing for the BlackRock Daily Reinvestment Stablecoin Reserve Vehicle indicated that the fund invests 100%. assets in cash, short-term US treasury bonds with a maturity of up to 93 days and overnight repo collateralized by treasury instruments. The official register of OnChain Shares is to be maintained by Securitize Transfer Agent, using a system connected to public blockchains.
Even more importantly, the fund is designed to operate so that OnChain Shares can qualify as eligible reserve assets for issuers of payment stablecoins under the GENIUS Act. This means that BlackRock is not just building another investment product. It builds a potential reserve layer for stablecoins and the digital dollar.
The second strong signal came from Ondo Pilot, Kinexys by JP Morgan, Mastercard and Ripple. The companies announced the completion of the first near-instant, cross-border and interbank buyout of a tokenized U.S. Treasury bond fund. The asset portion of the transaction was converted to XRP Ledger in less than five seconds, and fiat settlement passed through the Mastercard Multi-Token Network and JP Morgan’s banking infrastructure.
This solves one of RWA’s most important problems: liquidity. If tokenized bonds can be redeemed outside traditional banking windows, in a model close to 24/7, institutions may start treating them not only as a profitable product, but as an element of the settlement infrastructure.
The market received two contradictory signals at once. In the short term, it is burdened by inflation, PPI, and the yield on 10-year US bonds at around 4.575%. and weaker flows in ETFs. In the long term, it benefits from regulations, tokenization, stablecoins and the entry of the largest financial institutions into the on-chain infrastructure.
Reservation: This material is for informational and educational purposes only. It does not constitute investment, financial, tax or legal advice, or a recommendation to buy, sell or hold any digital asset. The cryptocurrency market is highly volatile, and using leverage can increase both potential profits and losses. Market data may be out of date at the time of reading. You should make each investment decision independently, taking into account your own financial situation, goals and risk tolerance.
