Gray Research Director Zach Pandl states that the resurgence of inflation in the United States may lead the Federal Reserve to maintain high interest rates for a long time, with three major impacts on the crypto market: first, high interest rates suppress the attractiveness of interest-free assets like Bitcoin; second, rising real interest rates increase the opportunity cost of dollar assets; third, tokenization of fixed-income assets accelerates, and stablecoin yields rise. Regulatory benefits such as the CLARITY and GENIUS acts may provide some buffer. Market expectations for the first rate cut have been pushed back to September 2027.

MeNews

2026-05-25 17:01:52

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ME News update: On May 16 (UTC+8), Grayscale Research Director Zach Pandl said that amid renewed U.S. inflation, 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 U.S. CPI approaches 4%, new Federal Reserve Chair Kevin Warsh has virtually 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. Since Bitcoin, like gold, is a non-yielding asset, higher real interest rates increase the opportunity cost of holding U.S. dollar assets. However, it still remains optimistic about Bitcoin’s long-term outlook and believes that regulatory tailwinds such as the CLARITY Act can partially offset the related pressure. In addition, it said that a high-interest-rate environment will accelerate the tokenization of fixed-income assets. Current yields on U.S. dollar fixed-income products are already higher than most DeFi yields—for example, the USDC lending rate on Aave is about 3.6%, while short-term corporate bond yields are around 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 keep 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. (Source: BlockBeats)

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SentimentIndicatorHarvester

· 4h ago

If the CLARITY Act passes, there could be significant room for ETF expansion, with short-term pain but long-term benefits.

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

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