First Warsh-Chaired FOMC Signals New Era at the Fed

Chart of the Day — Steady stablecoin liquidity
Trade of the Day — Which way will COIN move?
Alpha Leaks — SpaceX acquisition, Plasma One launch, ETH to upgrade
News Roundup — Warsh at the Fed, Coinbase new products, Kalshi perps explode

Stablecoin Liquidity Remains Constant

This chart from CryptoQuant illustrates how the balance of stablecoins on exchanges has remained very stable since the end of 2024, with around 40% to 46% of all ERC-20 stablecoins staying on exchanges at any given moment in that period.

However, the BTC price has fluctuated widely during that same time, with drawdowns approaching 50%, despite liquidity remaining constant, which suggests that the BTC price can be moved by even slight shifts in sentiment and risk appetite.

COIN at Support

Coinbase is close to a huge support area that runs all the way back to September 2024. That means it’s setting up for a major trade, and the key price area is around $142.

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Warsh Sets New Tone at the Fed

Yesterday was the first FOMC meeting with Kevin Warsh in charge as the new Fed Chair, and it’s being interpreted as a hawkish hold.

Rates are unchanged (the fourth straight hold) but the tone shifted as inflation remains a key issue. May CPI reportedly ran at 4.2%, and officials appear open to rate hikes later this year, with nine of 19 policymakers seeing a hike by year-end.

When it comes to communication style, Warsh shortened the statement and avoided giving definitive forward guidance, and he did not submit his own dot-plot projection, all of which contrasts with Jerome Powell’s approach, as the former Chair would essentially provide signposting for the markets.

Overall then, the Warsh Fed seems initially more hawkish but less predictable, which seems for now like a tougher environment for risk assets, at least as long as inflation is a problem.

However, another reading is that there is still no hike, and removing heavy guidance causes markets to become more data-driven (which aligns with how free markets should ideally function), while the Fed itself can be more flexible and quicker to act when the data changes.

Coinbase Major Product Expansion

Coinbase is pivoting strongly into stocks, derivatives, AI tools, and consumer payments as it advances towards becoming a more comprehensive trading and finance platform.

In its latest update, the company announced plans to include equity and crypto options, and tokenized stocks backed directly by the underlying equities. Users will also be able to transfer stock portfolios from other brokerages into Coinbase Advanced.

Expanded prediction markets are part of the strategy too, and on the AI side, there is the new Coinbase Advisor feature, an AI tool offering investment guidance and market analysis, while the company is also building ways to integrate AI agents into user accounts.

Consumer finance additions include BTC travel and purchase rewards through Coinbase’s USDC-backed payment card, and the capacity to borrow against SOL staked through Coinbase.

Kalshi Perps Pump

Prediction markets platform Kalshi clarified that its new perpetual futures feature has cleared $5.5 billion in volume within just two weeks since launch. Kalshi currently lists eleven perps contracts, all of which are tied to crypto assets, but is speaking with regulators about expanding its perps product to cover other sectors.

Kalshi’s broader platform is also seeing heavy activity, with markets around the World Cup and NBA Finals pushing daily volume above $1 billion for three consecutive days.

The perps launch and its success are another sign that crypto-style trading products are influencing the mainstream even while crypto market sentiment is at rock bottom, which signals that current bearishness does not accurately reflect the positive long-term outlook for higher quality crypto themes.

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