The Fed Blinks & Bitcoin Goes Higher 

Gm friends,

The Fed didn’t cut interest rates, but Bitcoin pumped anyway. Curious why? Here’s your explainer. 

So pour that coffee and buckle up, because here’s your mid-week crypto update.  ☕️📰

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Chart of the Day

This is Bitcoin and the S&P 500, since early 2023. The correlation cannot be denied. 

But while Bitcoin is currently consolidating within the lower $80Ks, the S&P 500 just finished up a very significant 10% retracement. And right now, the world’s most prominent stock index is using last summer’s all time high as support. 

So as we’re trying to determine where Bitcoin goes from here, the unfortunate truth is that it all probably depends on what happens to the major stock indices. So if you’re in crypto, then keep focused on the larger economy, the stock market, and the US and global M2. 

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News Now

The Fed Blinks & Bitcoin Goes Higher 

The US Federal Reserve’s FOMC meeting happened yesterday afternoon. And as expected, the Fed didn’t cut interest rates, but instead held them steady between 4.25% to 4.5%. And yet, Bitcoin pumped immediately after the meeting by about 1.5%. And at the time of this writing, we’re trading above the critical 200D EMA at $85,500.

So if the FOMC meeting was a nothing burger, then why did Bitcoin get a boost? Well, the meeting really wasn’t a nothing burger. The Fed blinked. 

So while Papa Powell and the Fed did increase their 2025 core inflation projections from 2.5% to 2.8%, they also projected a decline in the 2025 US GDP growth from 2.1% to 1.7%. And remember that the Fed’s mandate centers on the following two goals:

1. Keep inflation low
2. The economy moving (i.e. high employment). 

Therefore, because the Fed worried out loud about a slowing US economy, due to Trump’s tariffs, that increases the likelihood that the central bank will loosen its monetary policy. And that means Bitcoin goes higher. 

So now, all signs indicate that the Fed will cut rates twice this year, with the first one probably coming in May. After both cuts, the Fed Funds rate should be at 3.9% by this December. But just as important is the Fed’s ending of their quantitative tightening program. At yesterday’s meeting, the Fed announced that their QT program will be reduced from $25B to $5B, starting April 1st. 

So the TLDR is that cheaper money is back to help stimulate the US economy, and Bitcoin likes that. 

Strategy’s “STRF” Offering

Last week, it was “STRK”. This week, it’s “STRF”. So on Tuesday, Strategy announced plans to raise an additional $500M by issuing 5M shares of “STRF”, which is a Series A Perpetual Strife Preferred Stock. Basically, STRF will be publicly traded, but it will pay a 10% annual dividend, paid out in quarterly payments. And if the dividends go unpaid, they’ll compound at an extra 1% yearly, capping at 18%. 

Strategy’s STRF announcement comes just one week after the STRK announcement, the latter offering an initial 8% dividend. You’ll remember that Strategy intends to generate $21B from the STRK offering. 

Having said all that, it appears that Strategy’s Bitcoin buying spree is cooling. And that’s because on Monday, the company announced that they purchased a mere 130 Bitcoin for $10.7M, paying $82K per coin. This is the smallest Bitcoin purchase that Strategy has ever announced. So the most logical explanation for this small purchase is that the company’s cash generating abilities (i.e. selling stock for cash) have significantly diminished from just a few months ago. 

Tech Stonk Round-Up

Here’s some updates for you with regards to a few of the most popular crypto-adjacent tech stocks. We’re talking Nvidia, Coinbase, and Robinhood. Let’s dive in. 

• Nvidia [NVDA]. The company’s GTC 2025 Conference is happening now in San Jose. And it’s all about advanced AI and humanoid robots. “Newton” is a new physics engine for advanced robotics, built in collaboration with Disney and Google Deepmind. “Groot N1” is an AI foundation model for humanoid robots. And the DGX Spark and DGX Station supercomputers are designed to bring advanced AI computing to desktops. 
• Coinbase [COIN]. Bernstein issued an outperformance rating for COIN on Monday. Specifically, the investment bank suggested there’s a 60% price upside, from current prices at $180. Bernstein’s price target is $310. The bank said that Coinbase is one of the main beneficiaries to the Trump administration’s pivot towards crypto. 
• Robinhood [HOOD]. Robinhood has just launched a predictions market center in partnership with Kalshi. Robinhood is starting small by initially letting users bet on the Federal Funds Rate projections for May, as well as the upcoming NCAA basketball tournaments. I’m sure this new predictions market will grow from here. HOOD was up 8% on the announcement. 

SKY (MakerDAO) to Invest $1B in Tokenized RWAs

Sky, the rebranded MakerDAO, is diving deeper into RWAs. So last year, Sky pledged $1B in funding for tokenized products. But on Tuesday, Sky announced that BlackRock’s BUIDL, Superstate’s USTB, and Centrifuge’s JTRSY will be the recipients. The winners were selected from a pool of 39 applicants. 

Specifically, BUIDL, Superstate, and Centrifuge will receive $500M, $300M, and $200M, respectively. BlackRock’s BUIDL offers tokenized US treasuries and repurchase agreements, Superstate’s USTB offers tokenized short-duration treasuries, and Centrifuge’s JTRSY is a tokenized T-bill fund. Sky’s DeFi lending platform Spark will manage the disbursements. 

This investment could serve as further rocket fuel for crypto’s $4.6B tokenized treasuries market. Per data from rwa.xyz, the tokenized treasuries market was worth $770M in January 2024. So that’s a 500% increase in less than 1.5 years. Watch this space. 

XRP Pumps After Garlinghouse Says SEC Case is Ending

XRP pumped 12% Wednesday morning after CEO Brad Garlinghouse declared on X that the SEC will be dropping its case against Ripple. “This is it—the moment we’ve been waiting for. The SEC will drop its appeal – a resounding victory for Ripple, for crypto, every way you look at it. The future is bright. Let’s build.” 

That post sent XRP from $2.31 to $2.59 within fifteen minutes. 

The SEC sued Ripple in December 2020, alleging that the company was selling unregistered securities via its XRP token sales. In 2023, a federal judge ruled that Ripple’s retail sales weren’t securities, but that the company’s institutional sales did break some laws. Ripple was fined $125M. The SEC appealed, under Gary Gensler’s reign, but now Garlichouse is saying that it’s all over. 

The SEC dropping its Ripple appeal is consistent with the multiple other crypto cases that the agency has dropped since Trump took office. However, it does appear that there’s more of a political favoritism angle here. Ripple donated $70M to the Fairshake super PAC and $5M to Trump’s inaugural fund, and Garlichouse apparently has a personal relationship with Trump. But regardless, things are no doubt looking better for XRP. Trump did mention XRP as one of the assets for the US strategic crypto stockpile, and the Bloomberg analysts believe there’s a very good chance (i.e. 75%) that an XRP ETF gets approved this year. 

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Today On Chain

A lot of eyeballs are on Raydium [RAY] right now, the popular Solana-based DEX. And that’s because of the news that the DEX will be launching “LaunchLab”, which will serve as the DEX’s own token issuance platform. 

LaunchLab will be a competitor to Pump.Fun, but developers are saying that it will launch more than just memecoins. RAY pumped 13% higher on the news, as it’s thought that LaunchLab will increase Raydium’s revenues. 

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Altcoin Alpha

• Cronos [CRO] holders, watch out. A governance proposal to reissue $70B in CRO was just approved. These CRO were burned in 2021. Crypto.com’s validators largely backed the proposal. 
• Ethena [ENA] has partnered with Securitize to launch a new TradFi EVM L1 called “Converge”. ENA will be used for Converge’s staking / security. 
• FLUID should soon be making an announcement about its new DEX V2. And FLUID’s TVL is close to its previous all time highs. The point is, this DeFi protocol is showing strength and momentum. 
• PLUME has received an investment from Yzi Labs (i.e. formerly Binance Labs). PLUME is a full-stack L1 RWA blockchain. 
• SUI’s gaming summit began Tuesday. Be on the lookout for any major announcements. 

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Legal Disclaimer

Wealth Mastery (Lark Davis, and the Wealth Mastery writing team) are not providing you individually tailored investment advice. Nor is Wealth Mastery registered to provide investment advice, is not a financial adviser, and is not a broker-dealer. The material provided is for educational purposes only. Wealth Mastery is not responsible for any gains or losses that result from your cryptocurrency investments. Investing in cryptocurrency involves a high degree of risk and should be considered only by persons who can afford to sustain a loss of their entire investment. Investors should consult their financial adviser before investing in cryptocurrency.

You can find a full disclosure of all my crypto & venture investments here.