Crypto Currents: Fed policy may boost crypto as treasury boom wanes

A potential Federal Reserve policy shift that could devalue the dollar is creating a tailwind for risk assets, but the red-hot bitcoin treasury stock trend is showing signs of cooling, creating a mixed picture for investors. Meanwhile, major tech and finance players like Google and Santander continue to build deeper integrations with blockchain technology, signaling sustained institutional interest. Stay up on the crypto news that matters with “Crypto Currents,” daily from The Fly. Join us 2 PM daily for your essential briefing on the fast-moving world of cryptocurrency on FlyCast radio. Also, subscribe to our YouTube channel for the Crypto Fly By weekly recap.

FED’S ‘THIRD MANDATE’ SPARKS POLICY SPECULATION: According to a report from Bloomberg, President Donald Trump’s pick for Fed governor, Stephen Miran, has brought attention to a little-known “third mandate” for the central bank: moderating long-term interest rates. The Trump administration may use this to justify more aggressive intervention in the bond markets through policies like yield curve control or expanded quantitative easing. Such policies, aimed at suppressing long-term borrowing costs, could devalue the U.S. dollar and drive capital into assets like bitcoin, which some analysts believe would be a significant positive catalyst.

In regulatory news, Cointelegraph reports that Coinbase (COIN) is pushing the U.S. Department of Justice to intervene in state-level enforcement actions. The exchange wants the DOJ to urge Congress to pass legislation that would prevent states like Oregon from bringing their own lawsuits over services that are permissible under federal law, arguing the current situation is “government run amok”.

GOOGLE AND TOP BANKS DEEPEN CRYPTO INTEGRATION: Underscoring the long-term institutional trend, Fortune reported that Google (GOOGL) has unveiled an open-source protocol allowing AI applications to process payments using stablecoins. The initiative, developed with partners including Coinbase and the Ethereum Foundation, highlights the growing role of crypto in powering the AI-driven economy.

The push is also accelerating in the traditional banking sector. In Europe, In a press release, Santander’s (SAN) digital unit, Openbank, has launched crypto trading services for customers in Germany and plans a rollout in Spain. This follows similar moves by German banking giants DZ Bank and Deutsche Bank (DB). In Switzerland, a proof-of-concept trial saw major banks UBS, Sygnum, and PostFinance successfully test cross-bank payments on the public ethereum blockchain using digital representations of bank deposits, according to CoinDesk. Bloomberg reports that payments giant Stripe also scored a key victory, with its stablecoin arm partnering with a new startup to win a competitive bidding process to issue a native stablecoin on the fast-growing Hyperliquid (HYPE-USD) trading platform.

BITCOIN TREASURY STOCK BOOM COOLS: The recent boom in “bitcoin treasury” companies is showing signs of strain. According to a new report from K33 Research, one in four publicly traded bitcoin treasury firms is now trading at a market capitalization below the value of the bitcoin it holds. This makes it difficult for these companies to raise new capital by issuing stock without diluting existing shareholders. As a result, average daily bitcoin purchases by these companies have fallen to the lowest level since May.

This trend was highlighted by GD Culture Group (GDC), whose shares plunged 28% after it announced a deal to issue nearly 39.2M new shares to acquire 7,500 bitcoin. Even market leader Strategy’s (MSTR) premium over its bitcoin holdings has fallen to its lowest point since March 2024, reducing its capacity to fund new purchases through equity markets.

• Gemini (GEMI): CoinDesk reports that shares of the newly public crypto exchange have slid nearly 24% over the past week and are down more than 34% from their post-IPO high as the company remains unprofitable.
• Bullish (BLSH): The crypto exchange, which went public in August, has seen its stock fall nearly 57% from its all-time high. Despite the drop, Cathie Wood’s ARK Invest continues to buy shares, recently adding $8.2M to bring its total holdings in the firm to over $129M.
• The Ether Machine: The Block reports that the ethereum treasury company announced it has filed with the SEC to go public via a merger with the SPAC Dynamix Corporation (ETHM).
• Metaplanet: The Japanese bitcoin treasury firm is expanding its operations by establishing new subsidiaries in Japan and the U.S., according to CoinDesk.

DORMANT WHALE MOVES $116M IN BITCOIN: Analysis of on-chain data, provided by Arkham Intel, showed a btcoin wallet that had been dormant for over 11 years became active on Tuesday, transferring 1,000 BTC worth approximately $116.6M to new addresses. The wallet first received the bitcoin in January 2014, when the tokens were valued at just $847 each. Such movements from long-dormant, early holders are often monitored by investors as they can sometimes precede selling activity.

PRICE ACTION: As of time of writing, bitcoin (BTC-USD) was trading at $115,794.72 while ether (ETH-USD) was trading at $4,496.63 according to price data provided by CoinDesk.