By Omkar Godbole (All times ET unless indicated otherwise)
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: renewed doubt over the passing of U.S. crypto regulation.
Early Tuesday, CoinDesk reported that Senate Democrats are hesitant to push forward landmark stablecoin legislation, citing concerns over President Donald Trump’s growing personal gains from his crypto ventures.
When Trump took office, many observers felt crypto regulation would proceed smoothly. Looking back, that optimism was probably misplaced. With the president actively involved in digital assets through family-linked projects like WLFI and memecoins, opposition has mounted, potentially slowing regulatory progress.
That might lead investors to reprice regulatory uncertainty just as charts for BTC and XRP are signaling pullback risks. Additionally, according to CryptoQuant, there are signs of renewed weakness in bitcoin demand from U.S.-based investors.
“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) marked three straight days of net inflows.
Acting CFTC Chairman Caroline Pham told crypto journalist Eleanor Terret that the derivatives market regulator plans to observe a handful of tokenization pilot programs to evaluate the technology and see how well tokenized assets function in the real world.
Speaking of traditional markets and macro, Taiwan dollar forward contracts signal extreme pressure on the U.S. dollar, meaning the greenback could continue to weaken against the Asian currency and probably major currencies like the euro. The broad-based USD weakness may act as a tailwind for crypto. FX market volatility could drive investors to gold and perhaps bitcoin too, unless it leads to a broad-based risk-off, in which case BTC may feel the heat.
The other bullish development is the U.S. Treasury Secretary Scott Bessent’s comments that U.S. rates now carry sovereign credit risk and not just long-term growth and inflation expectations. In other words, rates are artificially high because the U.S. government itself is now the risk premium, as pseudonymous observer EndGame Macro said. So, a shift away from U.S. assets and into alternative investments could continue. Stay alert!
