Bitcoin Targets $110K on US Inflows While Circle Sinks 7% Amid Rising Rivals
Digital Asset Market: US demand for Bitcoin is surging, as shown by the Coinbase Premium reaching its highest level since February, signaling increased buyer appetite. This premium, which measures the price difference between Coinbase and Binance, indicates strong support from US investors and suggests a positive outlook for Bitcoin into the second half of 2025. Meanwhile, spot exchanges have seen their reserves drop by 550,000 BTC in less than a year, with no signs of the market overheating. The return of institutional interest, highlighted by BlackRock’s Bitcoin ETF rapidly reaching $70 billion in assets, further underscores the strengthening US demand. With the ceasefire in effect, BTC is now pushing upward of $105,000.
Meanwhile, Circle (CRCL) shares fell up to 7 percent on Tuesday, ending a strong three-day rally sparked by hopes for stablecoin regulation, as Wall Street turned its attention to potential risks from increased competition in the digital token market. While optimism over the Senate-passed GENIUS Act had propelled the stock, analysts warn that the same regulatory clarity could attract new rivals, challenging Circle's long-term market share and pressuring its stock in 2025. Most of Circle's revenue comes from interest earned on assets backing its USDC stablecoin, along with fees from blockchain services and redemptions. Analysts see future growth hinging on broader partnerships, especially with mainstream businesses, as more traditional companies like Fiserv announce plans to launch their own stablecoins.Macro Economics: Oil prices dropped over 5 percent, with U.S. crude trading around $64, after President Donald Trump announced that China could continue buying oil from Iran, signaling a U.S. softening of its strict sanctions as a ceasefire between Israel and Iran took hold. Brent crude and U.S. oil futures fell to levels not seen since before Israel began bombing Iran, as investors believed the risk of a major supply disruption in the Middle East had diminished. Previously, fears of escalating conflict and potential attacks on vital oil infrastructure, particularly in the Strait of Hormuz, had pushed prices higher. Trump, while expressing dissatisfaction with actions from both Israel and Iran, pressured both sides to adhere to the ceasefire, emphasizing the U.S. interest in stabilizing oil markets and reducing geopolitical tensions in the region.
Equities: Stocks surged on Tuesday with the Dow Jones Industrial Average rising 406 points, or 0.9 percent, and the S&P 500 and Nasdaq Composite also gaining 0.9 percent and 1.3 percent respectively, as falling oil prices and hopes for a lasting ceasefire between Israel and Iran lifted investor sentiment. Oil prices tumbled for a second consecutive day, with US crude dropping over 5 percent after falling more than 7 percent the previous day, a move that boosted airline shares including United Airlines, Frontier, and Delta, all up more than 2 percent, while riskier tech names like Broadcom and Nvidia advanced as well. The ceasefire, reached with President Donald Trump’s mediation, remained fragile as both Israel and Iran accused each other of violations, though Trump asserted the agreement was still in effect and repeated his dissatisfaction with both parties. Historic similar events have shown that they have only temporary effects on financial markets, resilient economic fundamentals could continue to drive equities higher over the next year.
The Fed and US Treasury: Federal Reserve Chair Jerome Powell testified before Congress, reaffirming the Fed’s commitment to curbing inflation and emphasizing caution regarding further interest rate cuts, despite increased pressure and criticism from President Donald Trump. Powell described the economy and labor market as strong but noted that inflation remains above the Fed’s 2% target, partly due to uncertainties around the impact of Trump’s tariffs. He stressed that policymakers are prepared to wait before making any policy adjustments until more information about the economic effects of tariffs becomes available. Powell repeated that the Federal Open Market Committee’s primary responsibility is to keep inflation expectations anchored and to prevent temporary price increases from becoming entrenched inflation.
While the FOMC recently voted unanimously to keep rates steady, internal forecasts show a division among members over the number of rate cuts that might come later this year. Some committee members signaled they may support a rate reduction in July if inflation data continues to moderate, though futures markets see a higher likelihood of a cut in September. Powell’s cautious stance could provoke further criticism from Trump, but he maintained that achieving long-term price stability is essential for sustaining strong labor market conditions for all Americans. Meanwhile, some Fed officials signal openness to easing policy.Geopolitical: While the Israel-Iran ceasefire is holding in name, both sides have continued exchanging attacks despite US-brokered efforts for a truce, with Israel conducting strikes on Iranian targets and Iran launching missiles at Israeli sites, resulting in significant casualties and destruction. Iranian nuclear chief Mohammad Eslami has vowed that Iran will continue its nuclear program, even after key facilities were bombed, and questioned the integrity of international inspectors, suggesting concerns over leaks to Israel or the US. Amid ongoing violence, President Trump has voiced deep frustration, issuing public pleas for compliance and pressuring Israel to halt further attacks, yet the ceasefire remains fragile as both countries continue to retaliate and disagreements among allies complicate the peace process.
View from our desk
Bitcoin Primed for Breakout as US Demand Surges
With the Iran-Israel ceasefire expected to hold, Bitcoin appears ready for its next leg higher, potentially breaking above $110,000. A new all-time high would not be surprising, given the sharp increase in US demand. The Coinbase Premium has reached its highest level since February, signaling strong American buying interest. Meanwhile, spot exchange reserves continue to decline, reflecting ongoing supply constraints. At our Desk, we remain bullish through the second half of 2025 and expect momentum to continue building.
Stablecoin Spotlight Shifts to Tether and Foreign Markets
Market attention is turning toward stablecoins, where competition is heating up. Tether (USDT), currently at a $156 billion market cap, has positioned itself well and is doubling down on its expansion in foreign markets, particularly across Asia. This number may soon look small compared to the expected growth of the sector. In the United States, however, proposed regulations such as the GENIUS Act are creating hurdles for issuers. A more supportive regulatory stance would help preserve the dollar’s dominance by allowing USD-backed stablecoins to thrive globally. We’re long-term bullish on the rising use cases around stablecoins for both domestic and international payments.
Market Tailwinds Build as Oil Falls and Fed Pressure Grows
Broader financial markets are benefitting from easing geopolitical tensions and lower energy prices. Crude has dropped back to pre-conflict levels, and the VIX has declined from 23.0 to around 17.5, with expectations for continued volatility compression. President Trump is expected to increase pressure on the Federal Reserve to cut rates, and some officials are beginning to show openness to that shift. His more conciliatory remarks on China’s oil purchases from Iran suggest a possible move away from trade conflict, which could further boost market confidence.
Happy Trading!
The 1Konto Team
About 1Konto
1Konto powers institutional finance with a unified platform for trading, settlement, and credit across stablecoins, fiat, and digital assets. Through 1KPrime, clients gain access to deep liquidity, real-time cross-border settlement, and integrated Bitcoin-backed credit facilities, all supported by trusted custody infrastructure. From treasury management to automated capital deployment, 1Konto enables the next generation of global financial operations with the security, efficiency, and transparency institutions require.
Contact us today to learn how we can support your trading, settlement, and capital needs.
Not Financial Advice Disclaimer