Grayscale: The Federal Reserve may maintain high interest rates for the long term, which is bearish for Bitcoin but bullish for Circle and RWA

BlockBeats News, May 16 — Grayscale Research Director Zach Pandl said that, amid the resurgence of inflation in the United States, the Federal Reserve may maintain a high-interest-rate policy for the long term, which will have three core impacts on the crypto market. He believes that as the US CPI approaches 4%, the new Federal Reserve Chair Kevin Warsh has almost no room to cut rates, and the market’s current expectation for the first rate cut has been pushed back to September 2027.

Grayscale noted that long-term high interest rates will create pressure on “currency devaluation trades” such as Bitcoin. Because Bitcoin, like gold, is a non-interest-bearing asset, higher real interest rates increase the opportunity cost of holding dollar-denominated assets. However, it still looks optimistic about Bitcoin’s long-term prospects and believes that regulatory tailwinds such as the CLARITY Act can partially offset the related pressure.

In addition, it believes that a high-interest-rate environment will accelerate the tokenization of fixed-income assets. Current yields on US dollar fixed-income products are already higher than most DeFi yields—for example, the USDC lending rate on Aave is about 3.6%, while the yield on short-term corporate bonds is about 4.5%. Grayscale also said that stablecoin issuers will benefit from high interest rates. Since the GENIUS Act prohibits stablecoins from paying interest to users, issuers can retain the yield on reserve assets. It estimates that for every 25 basis point increase in short-term interest rates, Circle’s revenue will increase by approximately $190 million.