What to know:

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Market Update

As Bitcoin (BTC) and the broader crypto market anticipate the Federal Reserve’s rate decision on Wednesday, new uncertainties have surfaced concerning the future of U.S. crypto regulations.

On Tuesday morning, CoinDesk reported that Senate Democrats are reluctant to advance pivotal stablecoin legislation, attributing their hesitance to President Donald Trump’s increasing financial ties to crypto ventures.

Initially, many anticipated that regulatory advancements would unfold smoothly during Trump’s presidency. However, it now seems that optimism may have been misguided. Trump’s engagement with digital assets through various projects has intensified opposition, hindering regulatory progress.

Investors might need to recalibrate their expectations regarding regulatory developments, particularly as BTC and XRP charts signal a potential pullback. Moreover, metrics from CryptoQuant indicate a decline in Bitcoin demand among U.S.-based investors. “Over the past month, the premium has surged significantly but is now declining again, aligning with Bitcoin’s recent price drop,” stated CryptoQuant’s Abram Chart.

Positive news emerged as well, such as the continued net inflows into U.S.-listed spot Bitcoin exchange-traded funds (ETFs), which have seen three consecutive days of inflows.

Acting CFTC Chair Caroline Pham recently told journalist Eleanor Terret that they will be monitoring several tokenization pilot programs to assess the effectiveness of tokenized assets in practice.

In the context of traditional markets, Taiwan dollar forward contracts indicate increasing pressure on the U.S. dollar, suggesting further depreciation against major currencies such as the euro. This overarching weakness in the dollar could support crypto. However, if this trend leads to a more conservative risk appetite, Bitcoin could see negative effects.

The U.S. Treasury Secretary Scott Bessent commented that current U.S. rates now carry risks linked to the government itself rather than just inflation and growth metrics. This perception may encourage shifts away from U.S. assets to alternative investments.

What to Watch

Crypto Events

• May 6, 7:15 a.m.: Casper Network (CSPR) will launch its 2.0 mainnet upgrade.
• May 8: Alex Mashinsky, former CEO of Celsius Network, will be sentenced in court.

Macro Events

• May 6, 10 a.m.: Joint hearing by U.S. House Financial Services and Agriculture on digital assets.
• May 7, 2 p.m.: Federal Reserve will announce its interest-rate decision.

Notable Comments

• The U.S. Treasury Secretary raised concerns about long-term growth and inflation expectations connected to current rate levels.

Stay informed and prepared for market fluctuations as key decisions unfold.