May’s second week was quite eventful. From the Fed’s interest rate decision to Bitcoin and Ethereum regaining key levels—crypto markets saw a regained optimism as most digital assets regained losses seen post-February.
Fed Interest Rate Announcement
The first major market-moving news we had came on May 7th. At this date, the Federal Reserve announced no change to the current 4.25—4.50% interest rate, frustrating many who were calling for a slash, especially the U.S. President.
At the press conference following the announcement, Powell discussed how the Fed was in a comfortable position to “wait and see” the effects of the new administration’s trade policies. He also highlighted concerns about inflationary pressures, stating that while the economy remains stable, rising import costs from recent tariff adjustments could lead to increased consumer prices.
While this announcement wasn’t by any means powerful enough to make the market go bearish—many anticipated that the crypto market would continue to range sideways as investors awaited further clarity on trade negotiations and inflationary pressures. However, the latter couldn’t be far from the truth.
U.S. Starts Trade Negotiations
The move that kick-started the stock and crypto’s revival was the first announcement that the White House had reached a trade agreement with its long-running trade partner, the United Kingdom.
The deal focuses on reducing tariffs and expanding trade flows, with the U.S. easing restrictions on British exports and the UK adjusting its stance on key American imports. This marks a step toward strengthening economic ties and boosting investor confidence across financial markets.
Adding to that notion that the White House may be entering its resolution phase in its foreign trade plans, initial reports that Treasury Secretary Scott Bessent will be meeting with Chinese officials to negotiate trade also added to the optimism.
In much need of relief, investors rushed back into the crypto market looking to rejoin before it went into another bullish run. And that much it did.
Shortly after Bitcoin not only reclaimed its $100k margin but reached as high as $101,678 in a day. Meanwhile, Ethereum exceeded all expectations, entering one of the strongest bull runs of recent years.
This market rally refueled retail adoption of digital assets. In fact, this major market movement that ended up adding short of a trillion back into crypto completely devastated investors who were caught betting against cryptocurrencies.
Lingering Risks
Not everything was positive this week, however. To keep us in check, we still got hold of a few economic reports that indicate inflation is on the rise in America.
We also discussed how American consumers are about to start feeling the effects of the tariffs, as ships with tariffed goods start arriving in the country.
Former White House Communications Director Anthony Scaramucci shared his insights on the potential issues of having a sitting president involved in crypto businesses. This week, a study from the State Democracy Defenders Action also shared concerns about Trump’s World Liberty Financial’s transparency issues revolving around its stablecoin USD1.
Another concern this week was Florida’s Bitcoin Reserve Bill getting shut down before it could even reach a vote. While crypto adoption in the U.S. is expanding, state-level efforts to establish Bitcoin reserves are struggling to gain traction.
Meanwhile, the GENIUS Act, a bill aimed at laying the groundwork for stablecoin oversight, failed to pass in the Senate—partially due to last-minute shifts in party support. Some lawmakers raised concerns about its potential conflicts with Trump-linked crypto ventures, with World Liberty Financial’s USD1 stablecoin already facing transparency issues. The GENIUS Act is expected to be revoted in the Senate this year.
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