Tensions in the Middle East, Trump Pushes GENIUS Bill, Fed Keeps Interest Rates Unchanged

All eyes are on the Middle East and whether the U.S. will escalate its involvement militarily. Since last week, oil prices have jumped 7%, reflecting rising geopolitical risk. Meanwhile, the Federal Reserve held rates steady at 4.25% to 4.5%, with Powell signaling growing concerns about stagflation, stating the Fed is “well positioned to wait” before making further moves.

On the policy front, President Donald Trump is pushing for swift passage of the GENIUS Act, which aims to establish a comprehensive regulatory framework for dollar-pegged cryptocurrencies. The bill mandates that stablecoins be fully backed by U.S. dollars or liquid equivalents, requires annual audits for issuers with a market cap above $50 billion, and sets clear guidelines for foreign stablecoin issuance.

Bitcoin’s market is experiencing stagnation despite positive ETF inflows and regulatory developments, trading between $100,000 and $110,000. Short-term holders and miners are contributing to selling pressure, counteracting ETF-driven demand and maintaining price stability, some analysts said. According to Glassnode, the market currently sits in a high-risk but not overheated regime, marked by fading spot strength, elevated profitability, and steady but cautious participation across derivatives and ETFs. Without renewed demand from both retail and institutional investors, the current cooling momentum may persist.

Meanwhile, Treasury Secretary Scott Bessent projects stablecoins could evolve into a $3.7 trillion market within five years, and Bitwise CIO Matt Hougan suggests ETFs, corporations, and governments could collectively acquire over 1 million BTC this year. Since their launch in January 2024, bitcoin ETFs have attracted $45 billion in inflows, outpacing the $34 billion pulled in by gold ETFs during the same period. While the bitcoin market is still too small for central bank-scale activity, Hougan believes government demand is steadily increasing.

Given the circumstances, crypto is holding up surprisingly well. However, the macro environment remains a critical factor that simply cannot be ignored. Even with major bullish news in the crypto space, if broader macro conditions continue to deteriorate, sustained upside will be difficult. The market may see short-term rallies, but without macro support, conviction and follow-through remain limited.