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

ME News Report, May 16 (UTC+8), Grayscale Research Director Zach Pandl stated that against the backdrop of rising inflation in the United States, the Federal Reserve may maintain high interest rate policies 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 interest rates, and the market’s current expectation for the first rate cut has been pushed back to September 2027. Grayscale pointed out that long-term high interest rates will put pressure on “currency devaluation trades” such as Bitcoin. Since Bitcoin, like gold, is a non-interest-bearing asset, higher real interest rates will increase the opportunity cost of holding dollar assets. However, it remains optimistic about Bitcoin’s long-term prospects and believes that regulatory benefits such as the CLARITY Act can partially offset this pressure. Additionally, it believes that a high interest rate environment will accelerate the tokenization of fixed income assets. Currently, yields on US dollar fixed income products are higher than most DeFi yields, such as the USDC lending rate on Aave at about 3.6%, and short-term corporate bond yields at about 4.5%. Grayscale also stated that stablecoin issuers will benefit from high interest rates. Since the GENIUS Act prohibits stablecoins from paying interest to users, issuers can retain the income from 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. (Source: BlockBeats)