Bitcoin Slides as Warsh's Fed Turns Hawkish

Hi! In today’s edition:

• 📉 Bitcoin slid to around $64,150 after the Fed held rates but turned hawkish in Kevin Warsh's first meeting as chair, though K33 says long-term holders signal a bottom may be near

• ⚖️ CME plans to sue the CFTC over its approval of Kalshi's perpetual futures, the same day a Michigan judge ruled sports prediction markets aren't under CFTC purview

• 🟣 Moody's rolled out credit ratings on Solana, letting tokenized-bond issuers embed assessments directly onchain

• 📉 Strategy's STRC preferred stock sank to around $89, roughly 11% under par, as investors rotate toward higher-yielding rivals

Bitcoin Slides as Warsh's Fed Turns Hawkish

Crypto edged lower Wednesday after the Federal Reserve held interest rates steady but released hawkish projections in Kevin Warsh's first meeting as chair.

Bitcoin traded around $64,150, down roughly 2.2% over 24 hours, while ether fell 3.6% and XRP and Solana slipped around 3%. The FOMC voted 12-0 to hold its rate at 3.5% to 3.75%, but policymakers raised inflation forecasts and projected a slower path to lower rates. Warsh's debut statement was notably shorter than those under Jerome Powell and dropped forward-guidance language entirely, with Warsh describing the format as presenting "the facts."

Not all signals are bearish. Research firm K33 said long-term holders now control a record 79% of circulating supply, and reactivation of old coins is the lowest since 2012, signs of weak selling pressure that have historically appeared near bear-market bottoms.

CME Plans to Sue the CFTC Over Perps Approval

CME Group plans to sue the CFTC over its approval of Kalshi's perpetual futures, CEO Terrence Duffy said Wednesday, the same day a federal judge dealt the agency a separate blow over prediction markets.

Duffy argued that under the Dodd-Frank Act, a product in which two parties exchange payments is a swap, not a future, so Kalshi's perpetuals were misclassified and should not have been approved as futures. He said CME needs clearer "rules of the road" before listing its own perps, and accused the CFTC of misrepresenting facts.

Separately, a Michigan federal judge ruled that sports-related prediction-market wagers are not swaps under CFTC jurisdiction, denying Polymarket's injunction bid against state regulators. With Sixth Circuit courts now split, the question appears headed for appeals and possibly the Supreme Court.

Moody's Rolls Out Credit Ratings on Solana

Moody's Ratings is bringing its credit ratings to Solana, letting issuers of tokenized bonds and other fixed-income securities embed the firm's assessments directly into blockchain-based assets.

The rollout, announced Wednesday with tokenization specialist Alphaledger, extends Moody's Token Integration Engine to a major public blockchain after its first deployment on the institutional Canton Network earlier this year. It builds on a 2025 pilot that attached municipal-bond ratings to tokenized securities on Solana.

The move targets a core obstacle to tokenization: bringing trusted financial data onchain. "Investors need independent credit analysis wherever they transact, and increasingly, that's onchain," said Rajeev Bamra, head of digital economy strategy at Moody's. It reinforces Solana's institutional push, following Western Union's Solana stablecoin and R3's migration of tokenized assets onto the network.

Strategy's STRC Preferred Stock Sinks to $89

Strategy's preferred stock STRC has slid to around $89, roughly 11% below its $100 par value and near its lowest level since the security launched in July 2025.

STRC is designed to trade close to par, with Strategy adjusting its monthly dividend rate to steer the price. The slide below par makes it harder for the company to issue new STRC shares through its at-the-market program, one of the mechanisms it uses to fund bitcoin purchases and cover obligations.

The weakness comes as investors rotate toward higher-yielding rivals like Strive's SATA and as bitcoin's pullback and questions over Strategy's cash reserves weigh on sentiment. The slide suggests the market may want a dividend-rate increase to restore demand and pull STRC back toward par.

• 📈 Igloo CEO Luca Netz says the company has built a way to list tokens on Nasdaq and the NYSE. The claim, if it holds up, would open a new bridge between crypto tokens and traditional stock exchanges.

• ⚖️ Kentucky sued Kalshi and Polymarket, accusing the prediction-market platforms and affiliates, including Coinbase, of running unlicensed sports betting in the state. Attorney General Russell Coleman said roughly 70% of Kalshi's 2025 volume came from sports wagering, putting the red state in a potential clash with the Trump administration's pro-CFTC stance.

• 🏛️ A bipartisan group of senators introduced a resolution opposing a pardon for Sam Bankman-Fried, led by Cynthia Lummis and Ruben Gallego. The measure urges President Trump not to pardon the convicted FTX founder, days after his appeal was rejected.

• 💸 Illinois is set to begin taxing bitcoin and crypto transactions under a provision in its state budget, which critics call one of the most punitive crypto taxes in the country. The industry has pushed back hard against a levy that could apply to holding or transferring digital assets in-state.

• ⚖️ Australia's High Court backed the regulator in the Block Earner case, ruling on whether the firm's crypto yield product required a financial services license. The decision sets a significant precedent for how Australian law treats crypto lending and yield products.

• 📊 Ark Invest bought about $18 million of Coinbase shares and sold roughly $29 million of Robinhood, according to its trade disclosures. The rotation came as Robinhood rallied and added to Cathie Wood's recent repositioning across crypto-linked equities.

• 🪙 Zama, Morpho, and Steakhouse launched the first "confidential DeFi yield" vault on Ethereum, using fully homomorphic encryption to shield balances and transfers in a USDC vault. It is an early test of whether privacy-preserving yield products can work at scale onchain.

• ⚖️ "Bitcoin Rodney," a Florida man, pleaded guilty over his role in the $1.8 billion HyperFund crypto fraud scheme. Rodney Burton faces sentencing for a conspiracy charge tied to one of the largest crypto Ponzi cases on record.

• 📉 Polychain- and Coinbase-backed Satori Finance is winding down, citing prolonged unfavorable market conditions. The perps DEX said user assets remain safe, with a withdrawal window open through July 16.

• 🟣 Trump comments fueled a dispute over Polymarket's $120 million Iran peace-deal market, where traders are split over whether the announced agreement counts as a "permanent" deal. More than 99% of UMA voting power has backed a "Yes" resolution, even as Trump called the agreement an interim measure he might abandon.

• 📈 Benchmark sees Coinbase moving past a "cyclical crypto brokerage" model, reiterating a $270 price target. The firm argues that Coinbase's expansion into subscription and services revenue makes it less dependent on trading-fee cycles.

• 🏦 Trace Finance raised $32 million in a Series A led by CoinFund, with the stablecoin-infrastructure firm saying its valuation grew tenfold from its seed round. The capital will scale regulated banking and stablecoin rails across Brazil, the US, and emerging markets.

• 🎮 EarnOS launched an anti-"AI slop" app and raised $6 million from 1kx, Circle, and Coinbase. The platform aims to reward users for genuine engagement and pay people back for their attention online.

1. Grayscale: Guide to Buying the Dip: Valuing Crypto with Cash Flows

2. Token Terminal: Ethereum Q1 2026 Report