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While bitcoin remains pegged above $80,000, another corner of the interest rate-sensitive cryptocurrency market is booming and may absorb capital from other currencies.
The total value locked in tokenized Treasuries has risen to $15.35 billion, surpassing the mid-April peak of around $15.1 billion, according to data from rwa.xyz.
This comes as markets price in a higher likelihood of an interest rate hike from the Federal Reserve (yes, an increase in borrowing costs), a sharp reversal from expectations of rapid rate cuts formulated earlier this year.
“The June cut became significantly more difficult to defend, and the allocator position we noted – capital remained at [BlackRock’s] BUIDL and tokenized Treasury bills instead of spot cryptocurrencies – will seem prescient on Friday,” Iggy Ioppe, co-founder of Polygon Ventures, said in an email.
Flows into yield-bearing tokenized Treasuries could rise further if today’s US Producer Price Index (PPI) points to persistent inflationary pressures in the making. The consensus is that the April figure will be 4.9% year-on-year, compared to 4.0% in March.
A high reading would increase expectations of a Fed rate hike and provide a headwind for risk assets. It remains to be seen how bitcoin reacts, especially since it remained virtually stable above $80,000 after Tuesday’s CPI came in higher than expected.
While highlighting BTC’s resilience, Marex analysts warned that it may be difficult to make further gains if inflation continues to rise.
“That’s the limitation for cryptocurrencies: they can sustain themselves, but they will have a hard time reaching an uptrend if they are real. [inflation] rates continue to rise,” Marex analysts said.
Miners also present a potential obstacle.
“If large miners are reporting big losses and pivoting toward AI, it usually means they may need to manage their balance sheets more actively, which can translate into more spot supply on rallies. That’s not a trigger for a downside, but it can limit gains in a choppy macro belt,” they noted.
In the broader market, smaller coins like ING, DOT, ATOM, and TRUMP added 5% or more, pointing to a capital rotation toward selective tokens. Big players like ether (ETH), solana (SOL), and XRP continue to fluctuate.
Bitcoin and Ethereum volatility indices continue to point to near-term calm ahead of three major events: the PPI report, the Clartiy 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 rose to near-record highs, pointing to higher commodity-driven inflation ahead. Stay alert!
Read more: For an analysis of current activity in altcoins and derivatives, see Crypto Markets Today. For a complete list of this week’s events, check out CoinDesk’s “Crypto Week Ahead.”
What is trend?
Today’s sign
bitcoin appears to be at an inflection point, with the recovery from February lows pausing 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 macroeconomic uncertainty around inflation and Federal Reserve policy intensifies.
A bearish resolution would involve BTC failing to break above the 200-day average and falling below $75,000, which was widely cited as a key level in February-March. That 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, which could lead to a rally as high as $92,000.
