Market update - May 30, 2025

Legal dispute over U.S. Tariffs maintains uncertainty

The most immediate risk for Bitcoin lies in a resurgence of US inflation, which could prompt the Federal Reserve to tighten monetary policy through interest rate hikes. While this scenario is currently viewed as unlikely, any such shift would put pressure on digital asset valuations. Another potential headwind is a reversal in the currently favorable political environment for cryptocurrencies in the US. However, market participants largely see any resulting corrections as strategic opportunities to increase exposure to Bitcoin.

Adding to the broader uncertainty is ongoing volatility in US trade policy. A recent US trade court ruling declared former President Trump’s global tariffs illegal, but the White House is appealing the decision and could pursue alternative tariff strategies under different statutes. The unpredictability of these developments creates a cloud of uncertainty, especially with some officials anticipating judicial shake-ups. Analysts estimate that persistent trade frictions could reduce global trade by roughly 2% in 2025, potentially jeopardizing $400 billion in trade flows.

Uncertainty in US economic policy was echoed in the Federal Reserve's May 6–7 meeting minutes, where officials highlighted "unusually elevated" uncertainty. They acknowledged a difficult balancing act: fighting inflation while supporting employment and economic growth. Fed staff downgraded GDP projections for 2025 and 2026, partly due to trade policy concerns. Participants also noted weakening safe-haven demand for US assets, which could affect capital flows and currency stability.

All eyes on Circle’s IPO

In corporate news, Gamestop's purchase of 4,710 BTC (~$500 million) signals a growing trend of companies using Bitcoin as a treasury asset. This movement is gaining traction among firms with surplus cash, reflecting rising institutional confidence in digital assets.

However, MicroStrategy (MSTR), once the dominant equity proxy for Bitcoin exposure, is underperforming. Increased corporate adoption of Bitcoin has introduced new equity alternatives for investors. Combined with deteriorating social media sentiment and its failure to outperform Bitcoin recently, MSTR is facing mounting pressure.

Meanwhile, Circle Internet Group's IPO is drawing strong demand. The offering is heavily subscribed, particularly among institutional investors such as BlackRock—which, according to Bloomberg, plans to purchase roughly 10% of available shares— along with JPMorgan, ARK, and Goldman Sachs. This reflects growing support for stablecoin infrastructure, particularly Circle’s USDC, which continues to gain market share.