Bitcoin holds above US$107k despite fading hopes of a US Fed rate cut

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With BTC Markets set to celebrate its 12-year anniversary on 1 June, CEO Caroline Bowler announced earlier this week her intention to step down after a period of significant transformation for the business.

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State of crypto

• Bitcoin holds above US$107k despite fading hopes of a US Fed rate cut
• Trump Media Group to raise US$2.5B for Bitcoin treasury
• GameStop invests US$513min its first Bitcoin purchase as part of a broader strategy
• Trump administration removes crypto restrictions in 401(k) plans
• US banks cautiously exploring crypto amid regulatory easing
• UK's FCA seeks public input on stablecoin and crypto custody regulations

Bitcoin holds above US$107k despite fading hopes of a US Fed rate cut

Bitcoin held above US$107,000 this week, despite diminishing market expectations for a near-term U.S. Federal Reserve interest rate cut. The CME Group’s FedWatch Tool indicates that traders now anticipate the first rate cut no earlier than September 2025, a shift from earlier expectations of multiple cuts throughout the year. This recalibration has dampened enthusiasm across risk assets, including cryptocurrencies, which often benefit from lower interest rates. Despite signs of potential labour market weakening - historically a catalyst for rate reductions - analysts suggest that without a clear macroeconomic trigger, Bitcoin may continue to trade within its current range.

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Trump Media Group to raise US$2.5B for Bitcoin treasury

Trump Media Group has just announced plans to raise US$2.5 billion from approximately 50 institutional investors to establish a Bitcoin treasury. The funding comprisesUS$1.5 billion in common stock and US$1 billion in convertible notes. CEO Devin Nunes stated that the move aims to protect the company from potential financial institution discrimination and aligns with the company's strategy to acquire "crown jewel assets" consistent with "America First" principles.

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GameStop invests US$513m in its first Bitcoin purchase as part of a broader strategy

GameStop has announced the purchase of approximately US$513 million worth of Bitcoin, acquiring a total of 4,710 BTC as part of its strategic push into cryptocurrency. This move aligns with the company's plan, unveiled in March 2025, to adopt Bitcoin as a treasury reserve asset, following the example set by Strategy (formerly known as MicroStrategy). This investment aims to rejuvenate investor interest and diversify GameStop's financial strategy amidst struggles in its core business of physical video game sales.

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Trump administration removes crypto restrictions in 401(k) plans

The U.S. Department of Labor has rescinded a 2022 guideline that urged fiduciaries to exercise "extreme care" when considering cryptocurrency options for 401(k) retirement plans. This policy change is reflective of the Trump administration's broader support for digital assets and is aligned with recent initiatives such as the Trump Media Group's plan to raise US$2.5 billion for a Bitcoin treasury. While the new stance allows fiduciaries more discretion, experts caution that the inherent volatility of cryptocurrencies may still deter widespread adoption in retirement portfolios.

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US banks cautiously exploring crypto amid regulatory easing

Major U.S. banks are now cautiously exploring cryptocurrency ventures, spurred by the Trump administration's rollback of previous regulatory barriers. Institutions like JPMorgan Chase, Bank of America, and Citigroup are considering pilot programs and partnerships in areas such as crypto custody and stablecoin issuance. However, executives have expressed some hesitation due to lingering uncertainties around anti-money laundering regulations and the volatile nature of digital assets. For now, banks await clearer guidance before fully committing, while others are preparing to follow suit if early adopters navigate the space successfully.

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UK's FCA seeks public input on stablecoin and crypto custody regulations

The UK's Financial Conduct Authority (FCA) has initiated a public consultation on proposed regulations for stablecoin issuers and crypto custody providers, aiming to establish a secure and competitive crypto asset sector. The draft rules, detailed in Consultation Paper CP25/14, mandate that stablecoin issuers maintain the value of their tokens and provide clear information on reserve asset management. In addition, crypto custody firms are required to always ensure the safekeeping and accessibility of customer assets. The FCA is collaborating with the Bank of England, which plans to release a complementary consultation later this year for stablecoins operating on a systemic scale. The consultation is open until July 31, 2025, with final rules expected in 2026.

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Crypto Fear & Greed Index

Source: Fear & Greed Index

BTC Markets in the news

Crypto Corner: Is your crypto portfolio ready for 2025 tax rules?

In this episode, BTC Markets’ Head of Finance Charlie Sherry chats with Nick Christie, Co-founder of Syla, about the challenges Australian crypto investors face during tax season, and what the ATO is expecting in 2025.

Catch the full conversation.

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The week ahead: economic events

Thursday, May 29th 

• United States Fed Funds Interest Rate & GDP Growth Rate
• Japan Consumer Confidence

Friday, May 30th

• Italy Inflation Rate
• India GDP Annual Growth Rate
• Germany Inflation Rate
• Canada GDP Growth Annualized & GDP Growth Rate
• United States Core PCE Price Index MoM, Personal Income & Personal Spending

Saturday, May 31st 

• China NBS Manufacturing PMI

Tuesday, June 3rd 

• United States ISM Manufacturing PMI
• Australia Interest Rate
• China Caixin Manufacturing PMI
• Euro Area Inflation Rate

Wednesday, June 4th

• United States Job Openings
• Australia GDP Growth Rate

Source: Trading economics

Market reflections

• Australia: Economic growth slows due to global headwinds, but inflation relief offers cautious optimism
• United States: US economy deals with mixed outlook as economy grapples with debt pressure and trade uncertainty
• China: China's economy faces structural challenges as consumer caution and foreign business pessimism rise
• Japan: Japan's economic outlook dims amid US tariffs and trade tensions
• Canada: Canada slipped into recession with US trade war, prompting new bilateral talks

Australia: Economic growth slows due to global headwinds, but inflation relief offers cautious optimism

Australia's economic momentum has decelerated, with the Westpac–Melbourne Institute Leading Index dropping to a six-month annualised growth rate of 0.2% in April, down from 0.5% in March. This slowdown reflects diminishing support from commodity prices and rising global trade uncertainties, suggesting the economy is on track for below-trend growth in 2025.

On the flip side, an influx of affordable Chinese goods through e-commerce platforms is helping to alleviate inflationary pressures. This development has contributed to the Reserve Bank of Australia's decision to cut interest rates, with further reductions anticipated. Additionally, a recent Productivity Commission report indicates that the rise in remote work is not the primary cause of the country's productivity decline; instead, the issue stems from a return to pre-pandemic work patterns without corresponding gains in efficiency.

United States: US economy deals with mixed outlook as economy grapples with debt pressure and trade uncertainty

The US economy is showing signs of strain as rising long-term Treasury yields, driven by fiscal deficits and new tax legislation, raise alarm among investors. While Treasury Secretary Scott Bessent remains optimistic about achieving over 3% growth, concerns over a swelling US$2.4 trillion debt projection and the highest effective tariff rate since the 1930s are casting a shadow over recovery hopes.

Gallup’s latest poll shows Americans remain sceptical about the economy’s direction, with only 23% rating conditions as good or excellent. Meanwhile, ongoing legal and policy challenges to the Trump administration’s tariff strategy add to the uncertainty, as the Federal Reserve holds off on rate moves pending more clarity on trade and inflation risks.

China: China's economy faces structural challenges as consumer caution and foreign business pessimism rise

China's economy is encountering significant headwinds, with the Conference Board's Leading Economic Index declining again in April, driven by weak consumer expectations, a sluggish logistics sector, and a drop in new export orders. Despite a 5.4% GDP growth in Q1 2025, analysts suggest this pace is unsustainable without substantial policy support. Former officials advocate for a more realistic 4% growth target for the next five years, emphasizing job creation and debt management.

Consumer spending remains tepid, with households favoring savings over consumption due to economic uncertainties, including a struggling property market and high youth unemployment. European businesses operating in China report record-low optimism, citing economic slowdown and increased competition as primary concerns. Many are scaling back investments and reducing costs, reflecting broader challenges in the Chinese market.

Japan: Japan's economic outlook dims amid US tariffs and trade tensions

Japan’s economy is under pressure as US tariffs strain exports and business confidence, prompting the government to downgrade its global outlook and the Bank of Japan to slash its 2025 growth forecast to 0.5%. Key sectors like automotive are feeling the brunt, and while officials - including chief negotiator Ryosei Akazawa - are pushing for diplomatic resolutions with the US, the outlook remains uncertain amid ongoing trade and geopolitical tensions.

Canada: Canada slipped into recession with US trade war, prompting new bilateral talks

Canada has entered a recession amid rising unemployment and falling exports, largely driven by escalating trade tensions with the US, which has imposed sweeping tariffs on key Canadian goods. In response, Prime Minister Mark Carney is leading intensive negotiations with Washington on a new economic and security pact aimed at stabilising relations and protecting national interests, while also addressing defence cooperation and trade conflict resolution.

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