Gate Ventures This Week's Cryptocurrency Market Trends (May 18, 2026)

TL;DR

• The S&P 500 Index first broke through 7,500 points on optimism about AI, but macro risks increased, causing a sharp decline on Friday, with small-cap stocks falling the most.

• Both CPI and PPI exceeded expectations, combined with a significant rise in oil prices, putting pressure on the market. Widespread inflationary pressures forced investors to abandon rate cut expectations and start to be cautious about potential Fed rate hikes.

• April retail sales data show that American consumers’ willingness to spend remains, but the proportion of gasoline expenditure in the incremental spending continues to rise, driven not by real demand expansion.

• STRC recorded a $3 billion trading volume and recovered to par value, reopening a key financing channel for Strategy. Strategy then increased its holdings by 535 BTC (about $43 million), bringing total holdings to 818.9k BTC.

• HYPE was the only major asset outperforming the market this period, rising 7.6% amid broad market pressure, mainly supported by expectations for HIP-4, Pre-IPO listings, and deeper USDC ecosystem integration.

• On the institutional level, JPMorgan is preparing to launch a tokenized money market fund designed for stablecoin issuers; Hana Bank acquired a 670 million USD stake in Dunamu, operator of Upbit.

Macro Overview

AI-led rally faces inflation-driven interest rate shocks, with April inflation data fundamentally challenging easing narratives

Last week, the US stock market reached an important milestone, with the S&P 500 closing above 7,500 points for the first time. Optimism related to AI tools drove the market higher early in the week, but investors took profits on Friday. Major indices still posted small weekly gains, with the S&P 500 up 0.31% and Nasdaq up 0.34%. However, the number of stocks participating in the rally narrowed, with small caps under significant pressure, as the Russell 2000 fell 2.48%. This indicates that despite the strength of AI themes, high-valuation tech stocks are currently vulnerable. When oil prices, inflation data, and bond yields all rise simultaneously, multiple pressures quickly transmit to stock valuations.

April inflation data dealt a serious blow to market sentiment, with CPI and PPI both accelerating sharply. CPI rose 0.6% month-over-month, with an annual rate of 3.8%, energy costs soaring 17.9% YoY. PPI data was even more concerning, jumping 1.4% MoM and 6.0% YoY, the largest annual increase since late 2022. Price pressures across commodities, energy, and service profit margins indicate a broad economic issue rather than a transient spike in gasoline prices. This sticky inflation fundamentally alters the macro landscape, prompting the fixed income market to reprice risks, shifting market expectations from rate cuts to caution about potential Fed hikes.

April retail sales increased 0.5% MoM and 4.9% YoY, in line with expectations, confirming that US consumer willingness to spend remains robust. However, a significant portion of nominal growth is driven by rising gasoline prices rather than actual demand expansion. Core retail sales continued to grow 0.5% MoM for the fourth consecutive month, but deeper data shows inflation is eroding real purchasing power. Coupled with stable initial jobless claims at 211k, the economy shows resilience with no signs of recession. This combination supports corporate revenues and nominal GDP but also presents a major policy dilemma for the Fed: with energy inflation reignited and consumer demand still strong, the motivation for easing policy diminishes, intensifying the macro environment.

Oil prices surged last week amid unresolved geopolitical tensions between Iran and the US. Influenced by stern warnings from President Trump, WTI crude rose 7.36%, closing at $105.42 per barrel; Brent crude increased 5.06%, closing at $109.26 per barrel. The market’s sharp reaction is noteworthy because geopolitical risks directly feed into overall inflation and elevate global transportation costs. Investors no longer see this energy shock as a temporary supply disruption but as a persistent structural threat. This shift in perception has significant implications for central bank policy responses—rising energy costs may anchor inflation expectations, ultimately pushing bond yields higher and tightening global financial conditions.

Next week’s economic calendar is heavily concentrated on Thursday morning, with key data on housing, initial jobless claims, and the Philadelphia Fed survey. Investors will closely watch the FOMC meeting minutes to assess the Fed’s policy stance on persistent inflation. Additionally, the S&P Global PMI preliminary figures will serve as an important market catalyst. If economic activity remains strong and price components stay elevated, recent US debt sell-offs may intensify; conversely, if service sector weakness emerges, equities could shift toward defensive allocations. (1)

DXY

The US dollar index rose 1.25%, from 98.04 to 99.27. The dollar benefited from a macro combination of weekend suppression of stocks and gold—higher-than-expected inflation data and a sharp rise in US bond yields strengthened the dollar’s interest rate differential advantage. Meanwhile, ongoing geopolitical uncertainties drove global investors toward liquidity reserves, further boosting the dollar’s safe-haven appeal and signaling tightening financial conditions ahead. (2)

US 10-Year and 30-Year Bond Yields

The US 10-year Treasury yield increased from 4.39% to 4.59%, up 20.3 basis points; the 30-year yield rose from 4.97% to 5.13%, up 16.1 basis points. The rise in long-term yields reflects rebuilding of inflation risk premiums, sustained oil prices, and term premiums, rather than purely optimistic economic growth expectations. (3)

Gold

Gold futures declined from $4,729.50 to $4,555.80, down 3.67%. This decline aligns with the dollar’s strength and rising real yields on Friday. Geopolitical risks supported safe-haven demand, but the influence of rates and dollar channels dominated the move. (4)

Crypto Market Overview

Mainstream Assets

BTC Price

ETH Price

ETH/BTC Ratio

BTC fell 8.1% last week, ETH dropped 10.2%. Spot BTC ETFs saw net outflows of $1 billion, ending five consecutive weeks of inflows; spot ETH ETFs also experienced net outflows of $255.1 million. (5)

Market sentiment weakened significantly, with the Fear & Greed Index dropping from neutral to 28, returning to the fear zone. (6)

Total Market Cap

Crypto Total Marketcap

Crypto Total Marketcap Excluding BTC and ETH

Crypto Total Marketcap Excluding Top 10 Dominance

Last week, the total cryptocurrency market cap declined 5.8%. Excluding BTC and ETH, the market fell 4.3%; the broader altcoin market, measured by excluding the top ten assets, declined even more sharply at 8.1%. (7)

STRC Performance

STRC recorded a $3 billion trading volume last week, with $2.2 billion above face value and $756 million below face value.

On May 11, STRC recovered to par value, reactivating a key financing channel for Strategy’s BTC accumulation. Strategy increased holdings by about $43 million to 535 BTC, at an average price of $80,300 per BTC, marking the smallest single increase since 2026, bringing total holdings to 818.9k BTC. (8)

Within Strategy’s financial instruments, STRC accounted for 93% of total trading volume last week, up from 79% the previous week. Next were SATA (variable-rate perpetual preferred stock) at 3.9%, and STRK (convertible perpetual preferred stock) at 1.4%. (7)

Top 30 Crypto Assets Performance

The top 30 assets averaged a 5.3% decline in price last week, with HYPE being the only asset to record a significant increase.

HYPE rose 7.6% amid generally weakening token prices. The main catalysts remain ecosystem expansion and new product launches, including market expectations for HIP-4 outcomes/forecast markets and new listings like Pre-IPO assets. (8)

Coinbase and Hyperliquid deepened cooperation to expand USDC on-chain trading volume, further strengthening liquidity and collateral efficiency within the ecosystem. (9)

Key Developments in the Crypto Industry

Tezos Launches Quantum-Resistant Private Payment Prototype on Testnet

Tezos developers launched TzEL on the testnet, a quantum-resistant private payment prototype combining post-quantum cryptography and zk-STARK proofs, aimed at resisting future “collect first, decrypt later” attacks on transaction data. The system also uses Tezos’ data availability layer to address scalability challenges posed by large proof sizes (~300KB), marking an early step toward post-quantum blockchain privacy infrastructure. This release coincides with the industry’s accelerated efforts to address potential quantum computing risks, though the timeline of real threats remains debated. (10)

JPMorgan Plans to Launch Tokenized Money Market Fund for Stablecoin Issuers

JPMorgan applied to launch JLTXX on Ethereum, a tokenized money market fund allowing stablecoin issuers to deposit reserves into regulated interest-bearing instruments and earn interest. The fund will invest in US Treasuries and overnight repurchase agreements, aiming to comply with the GENUIS Act, and will be managed by JPMorgan’s blockchain division Kinexys Digital Assets. This move continues similar initiatives by Morgan Stanley and others, reflecting a broad trend of traditional financial institutions migrating stablecoin reserve infrastructure to tokenized on-chain financial products. (11)

DTCC to Build 24/7 Collateral Management Network Using Chainlink

DTCC will integrate Chainlink infrastructure into its Collateral AppChain platform, scheduled to launch in Q4 2026, aiming to support near real-time tokenized collateral transfer, valuation, and settlement across financial markets and blockchains. The platform will serve as shared infrastructure for custodians, tri-party agents, and collateral managers, with Chainlink automating margin management, collateral optimization, and settlement processes. This highlights ongoing institutional demand for tokenized collateral infrastructure, with major market infrastructure players pushing for continuous trading, instant settlement, and capital efficiency. (12)

Major Venture Capital Deals

Deutsche Bank and Nasdaq Lead $120M Elliptic Funding Round

Blockchain analytics firm Elliptic completed a $120 million funding round led by One Peak Partners, with Deutsche Bank and Nasdaq Ventures participating. The valuation is $670 million, with proceeds to expand global compliance, blockchain analysis, and risk monitoring services. As banks and market infrastructure firms deepen their involvement in crypto and tokenized assets, the demand for compliant digital asset infrastructure grows, exemplified by this investment. (13)

Onramp Raises $12.5M Series A to Expand Bitcoin Custody Infrastructure

Bitcoin platform Onramp completed a $12.5 million Series A funding round led by Early Riders, with a valuation of $135 million. Funds will expand its multi-institutional custody (MIC) platform, which distributes Bitcoin custody across regulated providers like BitGo, Coincover, and Tetra Trust. The company plans to grow Onramp Finance, which offers brokerage, cash accounts, debit cards, IRAs, and financial management services, and to deepen partnerships with banks, advisors, and fintechs. As institutional demand for secure, regulated long-term Bitcoin custody infrastructure increases, this funding reflects ongoing institutional interest in fault-tolerant custody solutions. (14)

Hana Bank Acquires 670 Million USD Stake in Dunamu, Operator of Upbit

Hana Bank agreed to acquire a 6.55% stake in Dunamu, operator of South Korea’s largest exchange Upbit, for about $670 million, setting a record for the largest single investment by a Korean bank in a digital asset company. After the deal, Hana Bank becomes Dunamu’s fourth-largest shareholder and will deepen cooperation based on existing blockchain financial services, including cross-border remittance infrastructure. This investment signals a shift in Korea’s banking sector from partnership to direct equity ownership in digital asset infrastructure, with traditional financial institutions increasingly participating in the space. (15)

Venture Capital Market Data

Last week, 14 deals closed, including 12 in infrastructure and 2 in DeFi.

Weekly Venture Deal Summary, Source: Cryptorank and Gate Ventures, as of May 18, 2026

Total disclosed funding last week was $1.1137 billion, with infrastructure leading at $1.0002 billion. The largest single raise was Dunamu’s $667 million.

Weekly Venture Deal Summary, Source: Cryptorank and Gate Ventures, as of May 18, 2026

The third week of May 2026 saw total funding rise to $1.1137 billion, a significant increase of $818.9k from the previous week. (16)

About Gate Ventures

Gate Ventures is the venture capital arm of Gate, focusing on investments in decentralized infrastructure, ecosystems, and applications, dedicated to reshaping the Web 3.0 era. Collaborating with industry leaders worldwide, Gate Ventures empowers innovative teams and startups to redefine social and financial interactions.

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References:

1. S&P Global Week Ahead Economic Preview,

2. DXY Index, TradingView,

3. US 10 Year Bond Yield, TradingView,

4. Gold Price, TradingView,

5. BTC & ETH ETF Inflow,

6. BTC Greed and Fear Index,

7. Micro Strategy STRC Dashboard,

8. CME and ICE Push Crackdown on Hyperliquid Oil Trades,

9. Coinbase’s Partnership with Hyperliquid to grow USDH adoption,

10. Tezos launches quantum-resistant private payments prototype on testnet,

11. JPMorgan to launch tokenized money market fund for stablecoin issuers,

12. DTCC to use Chainlink for 24/7 collateral management network,

13. Deutsche Bank and Nasdaq back Elliptic in $120M funding round,

14. Onramp raises $12.5M Series A to expand bitcoin custody infrastructure,

15. DTCC to use Chainlink for 24/7 collateral management network,