Central banks are talking tough again, and markets are listening, perhaps a little too carefully. Rate hike expectations have repriced sharply across the US, eurozone, and UK following a burst of hawkish signalling, but it’s worth stepping back and asking whether this reflects a genuine shift in policy direction or simply reflex positioning. Our view leans toward the latter.<\/p>\n\n
Much of the recent move has been driven by the Iran conflict. As hopes for a swift resolution have faded, markets have swung dramatically on FOMC expectations for June, moving from pricing in cuts just weeks ago to now assigning a 15% probability to a rate hike. That’s a significant reprice, and combined with the usual month-end options expiry, it has weighed on risk assets broadly.<\/p>\n\n
Bitcoin hasn’t been immune. Having largely decoupled from macro noise since the crisis began, it has recoupled somewhat in recent days, a reflection of just how sharply sentiment has shifted. That said, the relative performance picture remains compelling: bitcoin is still up 6.4% since the conflict began, compared to European equities down 9.1% and gold, surprisingly, off 14.4%. It continues to demonstrate resilience even as the headlines turn.<\/p>\n\n
The deeper question is whether central banks are fighting the right battle. The current inflation impulse is still predominantly supply-driven, energy above all else, rather than the kind of broad-based demand or wage spiral that rate hikes are well-suited to address. Policymakers were famously late in 2022, and that experience has left them biased toward pre-emptive tightening. But the conditions today are materially different: demand is weaker, domestic inflation pressure is less persistent, and the growth outlook is deteriorating. Hiking into that environment risks compressing activity without actually solving the underlying problem. The bar for further tightening should, in our view, be considerably higher than current market pricing implies.<\/p>\n\n
On the regulatory front, the CLARITY Act continues to take shape. The Senate Banking Committee hasn’t yet published the latest draft publicly, but industry participants were given access to the text earlier this week. The headline changes relate to stablecoin rewards and they’re less restrictive than many had feared.<\/p>\n\n
Intermediaries such as exchanges will be prohibited from offering yield on stablecoin balances in a way that resembles a bank deposit, which was widely expected. However, rewards tied to transaction activity are explicitly permitted, as are loyalty, promotional, and subscription-based programmes, the latter being somewhat more accommodative than anticipated. The SEC, CFTC, and Treasury will be tasked with defining the boundaries of permissible rewards within a year, which feels workable under the current administration. This is a notable step forward from Senator Tillis’s earlier attempt to ban stablecoin rewards entirely, which prompted COIN to withdraw support for the prior draft in January.<\/p>\n\n
In mining, the picture is one of structural transformation under real financial pressure. Hash price has fallen to around $28 to $30 per PH\/s\/day, a post-halving low, while the weighted average cash cost to produce a single bitcoin hit roughly $80,000 in Q4 2025. Somewhere between 15% and 20% of the global fleet is now loss-making.<\/p>\n\n