HTX DeepThink: Fed Stuck in Dilemma, Holds Steady as Trump's New Token Emerges?
TechFlow Selected TechFlow Selected
HTX DeepThink: Fed Stuck in Dilemma, Holds Steady as Trump's New Token Emerges?
Is there hidden risk behind Bitcoin's rebound?
Navigating Web3 tides with focused insights
HTX DeepThink is a crypto market insights column by HTX, focusing on global macro trends, core economic data, and key developments in the crypto industry. It aims to inject fresh thinking into the market and help readers “find order within chaos” amid the ever-changing world of cryptocurrency.
What does it mean for the crypto market as Trump’s social platform Truth Social reveals its token plans? With the Fed holding firm on interest rates, what will break the deadlock? And beneath Bitcoin’s rebound, are risks still lurking? This edition features HTX Research's Chloe (@ChloeTalk1) providing in-depth analysis.
Trump Group to launch new "utility token," potentially ushering in a new era of stock tokenization in the U.S.
On April 30, 2025, Trump Media & Technology Group officially announced in a letter to shareholders that it will partner with Truth Digital Wallet to launch a utility token named “DJT.” Initially, the token will be used to pay for Truth+ subscriptions, with plans to expand gradually into payments, tipping, and transaction services across the Truth ecosystem. Meanwhile, the DJT trademark now covers three major areas: digital wallets, crypto payments, and digital asset platforms. The Truth Social official account has also been uniformly rebranded to “DJT,” indicating deep integration with the social platform.
This marks the first utility token led by a U.S.-listed media group and deployed in a real-world social product scenario, signaling a historic convergence between U.S. equities and on-chain asset forms. Although the official launch date, underlying blockchain, or specific mechanisms have not yet been disclosed, given Trump’s usual strategy of “hype first, details later,” the market widely expects a phased, distributed rollout designed to generate media attention and attract user traffic.
At a time when Memecoin momentum is cooling and narratives are shifting toward utility and payment use cases, DJT arrives at precisely the right moment. Similar to USD1, the stablecoin recently launched by HTX, the market is showing strong appetite for “utility-driven crypto assets.” Beyond its powerful political IP and social热度, DJT benefits from a genuine closed-loop ecosystem, suggesting its long-term value potential may far exceed short-term meme-driven speculation.
Geneva talks resume: China-U.S. thaw lifts risk appetite, but stalemate persists
This weekend, China and the U.S. will restart high-level talks in Geneva, Switzerland—the first since trade tensions escalated in spring 2025. U.S. Treasury Secretary Bessent and Trade Representative Grillo will meet with Chinese Vice Premier He Lifeng. Key agenda items include pathways to ease the 145% tariffs, adjustments to export control policies, and restoration of the de minimis rule for small e-commerce packages.
Despite ongoing disagreements over responsibility, the mere fact of this meeting—more symbolic than substantive—sends a global signal of “restarting dialogue.” With bilateral tariffs currently at historical highs, markets interpret this as a sign of short-term easing in geopolitical friction, driving a broad rally in risk assets.
Following the announcement, Bitcoin rose approximately 3.6%, surpassing $97,000, reflecting capital’s high sensitivity to macro normalization. While long-standing structural differences remain unresolved, a short-term policy buffer window could provide room for liquidity recovery in high-beta assets such as digital assets, gold, and tech stocks.
Yellen cools expectations: Now is not the time to cut rates; market may be overly optimistic on liquidity
On May 8, the Federal Reserve kept the federal funds rate unchanged at 4.25%-4.50% and maintained its March pace of balance sheet reduction—capping monthly Treasury roll-offs at $50 billion and MBS roll-offs at $35 billion. While the market had already priced in this decision, with CME FedWatch showing a 75% probability of a July rate cut, Chair Yellen struck a notably cautious tone during the press conference:
● “Now is not the time for us to get ahead of the curve on rate cuts.”
● “The cost of waiting is quite low.”
● “Whether we cut this year depends on how things evolve. Persistent inflation pressures remain unresolved, and trade policies like tariffs could push inflation higher again.”
The Fed currently faces a “dual dilemma”: On one hand, disinflation has clearly slowed, with PCE and CPI still above the 2% target. Yellen explicitly stated the Fed cannot act preemptively as it did in 2019—when inflation was below target—because today’s inflation remains elevated, and trade policies like tariffs may introduce new upward pressure. She acknowledged the Fed hasn’t faced a “high inflation, stable employment” environment like this in years, making policy choices more complex and riskier.
On the other hand, the Fed’s fiscal condition materially constrains policy flexibility. In FY2024, it paid $226.8 billion in interest on reserves and RRP facilities, while earning only $158.8 billion from its holdings of Treasuries and MBS, resulting in a $70 billion annual loss. A premature 25–30 basis point rate cut would lead to an estimated $20 billion in lost annual interest income, further eroding profits remitted to the Treasury and potentially raising questions about the central bank’s monetary independence.
Therefore, despite current market pricing of three rate cuts this year, the Fed is more likely to adopt a gradual approach of data verification and delayed pivot. Investors should remain highly vigilant against the risk of reversal as “sentiment trades run ahead of fundamentals,” especially in the absence of sharply deteriorating data.
Strong NFP data, Yellen highlights “unemployment rate” as key signal for policy shift; liquidity window may delay
April’s nonfarm payroll added 177,000 jobs, far exceeding expectations. The unemployment rate held steady at 4.2%, with job gains concentrated in healthcare, finance, and transportation. Despite a 9,000 decline in federal government jobs due to budget constraints, the overall labor market remains resilient without signs of systemic weakness.
Against the backdrop of persistent inflation and robust employment, Yellen repeatedly emphasized during the press conference that the “unemployment rate” is the critical “safety signal” for a policy pivot:
● “I can’t say how much of a rise in unemployment would be acceptable.”
● “We’ll look at the overall employment picture to assess signs of weakness.”
This messaging clearly defines the policy floor: Only if nonfarm payrolls show a material downturn or the unemployment rate rises rapidly above 4.5% might the Fed consider cutting rates before inflation reaches target.
Bitcoin rebounds but options market shows no clear trend; macro data to decide next move
Overall, although Bitcoin has rebounded near $99,000 on hopes of China-U.S. rapprochement and rate cut expectations, the options market shows no clear one-way betting bias. Currently, implied volatility for June and July call options on Deribit has risen moderately, with risk reversals (25d RR) remaining neutral-to-weak and skew structure flat, indicating limited confidence in sustained upside. A large concentration of Gamma positions sits between $95,000 and $100,000, suggesting the market may remain in a state of “suppressed volatility awaiting data-driven direction” in the near term.
If CPI and nonfarm payroll data for May–June remain strong, the “July cut” expectation will likely be revised downward, potentially triggering a BTC correction; however, if unemployment rises alongside slowing inflation, prompting a dovish shift from the Fed, Bitcoin could break out of its current volatility range and enter a new trending phase.
“HTX DeepThink: Find order within chaos”
Note: This article does not constitute investment advice, nor any offer, solicitation, or recommendation regarding any investment product.
About HTX Research
HTX Research is the dedicated research arm of HTX Group, conducting in-depth analysis across cryptocurrencies, blockchain technology, and emerging market trends. It produces comprehensive reports and expert assessments, committed to delivering data-driven insights and strategic foresight. HTX Research plays a pivotal role in shaping industry perspectives and supporting informed decision-making in the digital asset space. With rigorous methodology and cutting-edge data analytics, HTX Research remains at the forefront of innovation, leading thought leadership and fostering deeper understanding of evolving market dynamics.
For inquiries, please contact research@htx-inc.com
Join TechFlow official community to stay tuned
Telegram:https://t.me/TechFlowDaily
X (Twitter):https://x.com/TechFlowPost
X (Twitter) EN:https://x.com/BlockFlow_News
