This is an excerpt from the CoinDesk “Daybook” newsletter. Register here, if you haven’t already.
While Bitcoin remains stuck above $80,000, another interest-rate-sensitive segment of the crypto market is booming and could suck capital from other coins.
The total value locked in tokenized Treasuries jumped to $15.35 billion, surpassing the mid-April peak of around $15.10 billion, according to data from rwa.xyz.
This comes as markets are pricing in a higher likelihood of an interest rate hike from the Federal Reserve (yes, an increase in borrowing costs), a sharp change from expectations of rapid rate cuts announced earlier this year.
“The June reduction became much more difficult to defend, and the allocator positioning that we reported – capital remained in [BlackRock’s] BUIDL and tokenized Treasuries rather than spot crypto – will seem prescient by Friday,” Iggy Ioppe, co-founder of Polygon Ventures, said in an email.
Flows into yield-bearing tokenized Treasuries could increase further if the current U.S. Producer Price Index (PPI) indicates continued inflationary pressures in the pipeline. The consensus is that the April figure stands at 4.9% year-on-year, up from 4.0% in March.
A high reading would reinforce expectations of Fed rate hikes and be a headwind for risk assets. It remains to be seen how bitcoin will react, especially since it remained largely stable above $80,000 following Tuesday’s higher-than-expected CPI.
While noting BTC’s resilience, analysts at Marex warned that further gains could be difficult if inflation continues to climb.
“This is the constraint of crypto: it can hold, but it will have difficulty following an upward trend if it is real. [inflation] rates continue to rise,” Marex analysts said.
Miners also present a potential headwind.
“If large mining companies report big losses and turn to AI, this generally means they may have to manage their balance sheets more actively, which may result in greater supply during rallies. This is not a crash trigger, but it may cap the upside in an unstable macro band,” they noted.
In the broader market, smaller coins such as ING, DOT, ATOM and TRUMP added 5% or more, indicating a rotation of capital towards selective tokens. Majors like Ether (ETH), Solana (SOL), and XRP remain unstable.
Bitcoin and Ether volatility indices continue to indicate near-term calm ahead of three major events: the PPI report, the Clarity Act vote, and the meeting between President Donald Trump and his Chinese counterpart, Xi Jingping.
In traditional markets, WTI crude oil futures rebounded above $100, while copper hit near-record highs, both pointing to more commodity-led inflation. Stay vigilant!
Read more: For analysis of current altcoin and derivatives activity, see Crypto Markets Today. For a full list of this week’s events, check out CoinDesk’s “Crypto Week Ahead.”
What is the trend
Signal of the day
Bitcoin appears to be at an inflection point, with the recovery from February lows stalling near the 200-day simple moving average (SMA) at around $82,300 and the upper boundary of an ascending channel.
Momentum has stalled just as macro uncertainty around inflation and Federal Reserve policy intensifies.
A bearish resolution would imply that BTC does not rise above the 200-day average and falls below $75,000, which was widely cited as a key level in February-March. This could encourage systematic sellers to return to the market, particularly if rising Treasury yields continue to tighten financial conditions and weigh on risk appetite.
On the bullish side, a decisive move above the 200-day average would confirm a bull market, potentially giving rise to a rally up to $92,000.
