Crypto Daybook Americas: BTC Threatened by U.S. Regulatory Hiccup, Weakening Demand

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.

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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 the 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!

What to Watch

Crypto: May 6, 7:15 a.m.: Casper Network (CSPR) launches its 2.0 mainnet upgrade, introducing faster transactions, enhanced smart contracts, and improved staking features to boost enterprise adoption. May 7, 6:05 a.m.: The Pectra hard fork network upgrade will get activated on the Ethereum (ETH) mainnet at epoch 364032. Pectra combines two major components: the Prague execution layer hard fork and the Electra consensus layer upgrade. May 8: Judge John G. Koeltl will sentence Alex Mashinsky, the founder and former CEO of the now-defunct crypto lending firm Celsius Network, at the U.S. District Court for the Southern District of New York.

Macro May 6, 9 a.m.: S&P Global releases Brazil April purchasing managers’ index (PMI) data. Composite PMI Prev. 52.6 Services PMI Prev. 52.5 May 6, 10 a.m.: U.S. House Financial Services Committee and Agriculture Committee joint hearing titled “American Innovation and the Future of Digital Assets: A Blueprint for the 21st Century.” Livestream link. May 7, 2 p.m.: The Federal Reserve announces its interest-rate decision. The FOMC press conference is livestreamed 30 minutes later. Federal Funds Rate Target Range Est. 4.25%-4.5% vs. Prev. 4.25%-4.5% May 8, 7 a.m.: The Bank of England announces its interest-rate decision. The Monetary Policy Report Press Conference is livestreamed 30 minutes later. Bank Rate Est. 4.25% vs. Prev. 4.5%

Earnings (Estimates based on FactSet data) May 6: Cipher Mining (CIFR), pre-market, $-0.08 May 8: CleanSpark (CLSK), post-market, $-0.11 May 8: Coinbase Global (COIN), post-market, $1.88 May 8: Hut 8 (HUT), pre-market, $-0.10 May 8: MARA Holdings (MARA), post-market, $-0.52 May 13: Semler Scientific (SMLR), post-market

(Estimates based on FactSet data)

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

Tokens of some DeFi powerhouses are catching a bid as attention turns to fundamentals in a flat market.

Hyperliquid's HYPE token surged 72% over the past week, outpacing most of the top 100 tokens. The platform's gas-free, order book-based, decentralized exchange model is attracting traders seeking efficient and transparent trading environments.

AAVE has seen increased activity with the integration of Ripple's RLUSD stablecoin into its V3 Ethereum Core Market. The move aims to bridge traditional finance with DeFi, enhancing AAVE's appeal to institutional investors.

Despite a recent security breach on Curve Finance's X account, CRV managed to post a 40% gain in the past week, demonstrating investor confidence in the underlying protocol.

Kay Lu, CEO of HashKey Eco Labs, said in a note to CoinDesk that traders are turning to projects with stronger fundamentals and token economics as memecoins fall out of favor.

Derivatives Positioning

XMR, TAO, ADA lead majors in 24-hour growth of perpetual futures open interest. XRP, meanwhile, has the most negative 24-hour cumulative volume delta, hinting at an influx of selling pressure.

BTC's funding rate is barely positive, while ETH has flipped marginally negative, both pointing to weakening of bull momentum.

CME futures basis climbed to between 5% and 10%, reviving interest in cash-and-carry arbitrage trades, according to Binance Research.

Flows in the Deribit-listed options market have been mixed with May BTC calls and puts lifted.

Market Movements

BTC is down 0.19% from 4 p.m. ET Monday at $94,160 (24hrs: -0.18%)

ETH is down 1.09% at $1,795.10 (24hrs: -0.66%)

CoinDesk 20 is down 1.05% at 2,675.34 (24hrs: -0.96%)

Ether CESR Composite Staking Rate is up 7 bps at 2.964%

BTC funding rate is at 0.0046% (5.1147% annualized) on Binance

DXY is down 0.14% at 99.69

Gold is up 1.99% at $3,379.76/oz

Silver is up 2.13% at $32.99/oz

Nikkei 225 closed +1.04% at 36,830.69

Hang Seng closed +0.7% at 22,662.71

FTSE is down 0.18% at 8,580.67

Euro Stoxx 50 is down 1.14% at 4,719.66

DJIA closed on Monday -0.24% at 41,218.83

S&P 500 closed -0.64% at 5,650.38

Nasdaq closed -0.74% at 17,844.24

S&P/TSX Composite Index closed -0.31% at 24,953.52

S&P 40 Latin America closed -1.15% at 2,493.86

U.S. 10-year Treasury rate is up 1 bp at 4.36%

E-mini S&P 500 futures are down 0.74% at 5,629.75

E-mini Nasdaq-100 futures are down 1.05% at 19,845.50

E-mini Dow Jones Industrial Average Index futures are down 0.61% at 41,067.00

Bitcoin Stats

BTC Dominance: 64.91 (0.13%)

Ethereum to bitcoin ratio: 0.01910 (-0.52%)

Hashrate (seven-day moving average): 908 EH/s

Hashprice (spot): $50.13

Total Fees: 5.10 BTC / $480,379.20

CME Futures Open Interest: 143,680 BTC

BTC priced in gold: 28.1 oz

BTC vs gold market cap: 7.97%

Technical Analysis

VIRTUAL's daily chart. (TradingView/CoinDesk)

VIRTUAL, the native token of the Base-native Virtuals Protocol for creating and owning AI agents, has established a base above the 23.6% Fibonacci retracement of the January-April sell-off.

The breakout means potential for a rally to the 38.2% Fibonacci level of $2.22.

VIRTUAL is the best-performing coin of the past 30 days.

Crypto Equities

Strategy (MSTR): closed on Monday at $386.53 (-1.99%), down 1.25% at $381.68 in pre-market

Coinbase Global (COIN): closed at $199.40 (-2.7%), down 0.63% at $198.15

Galaxy Digital Holdings (GLXY): closed at C$26.51 (-1.23%)

MARA Holdings (MARA): closed at $13.09 (-9.6%), down 1.22% at $12.93

Riot Platforms (RIOT): closed at $7.90 (-5.84%), down 1.27% at $7.80

Core Scientific (CORZ): closed at $8.75 (+0.11%)

CleanSpark (CLSK): closed at $8.09 (-8.17%), down 0.62% at $8.04

CoinShares Valkyrie Bitcoin Miners ETF (WGMI): closed at $14.26 (-4.74%)

Semler Scientific (SMLR): closed at $33.58 (-7.13%), down 0.24% at $33.50

Exodus Movement (EXOD): closed at $41.28 (-7.84%), up 0.51% at $41.49

ETF Flows

Spot BTC ETFs:

Daily net flow: $425.5 million

Cumulative net flows: $40.63 billion

Total BTC holdings ~ 1.17 million

Spot ETH ETFs

Daily net flow: $0 million

Cumulative net flows: $2.53 billion

Total ETH holdings ~ 3.47 million

Source: Farside Investors

Overnight Flows

Chart of the Day

Volmex's BVIV or Bitcoin 30-day implied volatility index. (TradingView)

Bitcoin's 30-day implied volatility has dropped to the lowest since July last year.

In other words, volatility is cheap, which is when seasoned traders typically prefer to buy options.

While You Were Sleeping

In the Ether