Hold or Hike?

There’s a chance that rate hikes later this year may be slowly starting to come off the table over at the Federal Reserve. The recent jobs data in the US showed markedly fewer were added than expected, meaning Kevin Warsh and co may have to hold rates where they are - or possibly even consider cutting at some point.

Elsewhere, the stablecoin wars are getting spicy, as a new player has entered the arena. OpenUSD, backed by a huge consortium of some of the biggest companies on the planet, is being billed as a major threat to the likes of Tether and Circle. Read on to find out all about this new front in the stablecoin struggle, OUSD’s unique architecture, and whether it can topple the incumbents.

🚨 Ethereum Exodus 🚨

Ethereum’s early days were marked by key figures leaving the project. Most notably, Gavin Wood, who went on to found Polkadot, and Charles Hoskinson, who went off to build Cardano. Given that these two projects have failed to meaningfully challenge Ethereum’s dominance of the smart contract-chain sector, it seems like walking away maybe wasn’t the best idea.

Fast forward to now however and Ethereum is losing personnel once again. As the bear market bites and the crypto industry trudges through one of the toughest periods in its history, AI is luring many devs away from blockchain towards building out this new frontier. Meanwhile, the Ethereum Foundation has been laying off staff as Ethereum’s own layer 2s hive off fees from the main chain.

In today’s video, we dig into this latest exodus and what it means for Ethereum as it navigates the choppy waters of the current crypto market. We look at why no enduring rival has yet emerged, reveal how the defection of figures like Wood and Hoskinson was - in retrospect - one of the best things to happen to Ethereum, and consider how these latest difficulties may yet prove to be a benefit in the long run.

You can watch that video here.

📈 Crypto Market Forecast 📈

The jobs report that markets had been building toward all week duly arrived, and the picture it painted is nuanced rather than alarming. The US economy added 57,000 jobs in June, below the 115,000 forecast, but unemployment held steady at 4.2% and the economy continues to grow. The significance of the number lies in what it does to the Federal Reserve's rate path. Kevin Warsh had positioned himself as prepared to hike if the data demanded it. A payrolls miss of this magnitude makes that position very difficult to maintain publicly.

Bitcoin responded positively, climbing to around $61,500 as Treasury yields fell and the dollar retreated. This is the mechanism that matters. The bear case for crypto over the past six weeks was not really about crypto fundamentals: it was about a Fed signalling hikes into a slowing economy. A single soft payrolls print does not resolve that tension, but it changes the probability distribution. Markets are now pricing in less tightening, and less tightening means more risk appetite.

The second catalyst this weekend is the Clarity Act. Senator Lummis indicated the final bill text drops over the 4th July holiday, with a committee hearing scheduled for the 17th July. If the text arrives with genuine bipartisan backing, it marks the closest the sector has been to a clear regulatory framework since the debate began. The read-through is not about immediate price action but about the institutional capital that has been waiting on the sidelines for legal certainty.

There's just one small problem with the simple bull narrative, and that is that the Strategy picture changed materially this week. Strategy unveiled a new capital framework authorising $1 billion in MSTR common stock buybacks and $1 billion in Digital Credit Securities repurchases, targeting discounted STRC buybacks to cut dividend costs.

The company also raised STRC's dividend by 50 basis points to 12% and paused new Bitcoin purchases while building its USD reserve to $2.55 billion. Citi reiterated a Buy with a $260 target on the updated framework. This is a big deal: Saylor is pivoting from pure accumulation to active capital structure management. For Bitcoin, the removal of the single largest consistent buyer from the market is a headwind, but the stabilisation of STRC is a definite positive.

In sum then, the setup heading into next week is cautiously constructive. The jobs data takes rate hike fears down a notch. The Clarity Act text could provide a genuine catalyst if it lands cleanly. And Strategy's capital overhaul, while removing a buyer, reduces the risk of a disorderly forced-sell scenario that was the real bear case. The bull case is that Bitcoin tests $65,000 to $68,000 over the coming week. That said, one soft payrolls print is not enough to deter a Fed that is still watching inflation at 3.7%, and any hawkish pushback from Warsh would fade this rally quickly.

💵 Stablecoin Wars  💵

It has been an exciting, albeit drama-filled, week over in stablecoin land.

Last Tuesday (June 30th), we received news of a new stablecoin named Open USD (OUSD) being launched by a consortium of 140+ companies. The announcement garnered significant attention as the consortium’s partner list included the likes of Standard Chartered, BlackRock, Visa, Mastercard, American Express, Stripe, Google, Shopify, DoorDash, Samsung, Coinbase, Solana, Aave, MetaMask, and Morpho among others.

Many see the partner list as a sign of the stablecoin potentially being able to compete with the current incumbent leaders: Tether’s USDT and Circle’s USDC. Between the two, the market priced Circle’s market dominance as the one at most risk, with the $CRCL stock falling ~18% on the day of the announcement. Granted, that drop was also influenced by $CRCL’s removal from five Russell growth indexes on the same day, which forced a wave of mechanical index-fund selling layered on top of whatever the market was pricing about OUSD itself.

Still, market chatter hints that OUSD’s presence has cast doubts on Circle’s continued relevance in the stablecoin landscape, especially since its longtime partner Coinbase is a member of OUSD’s consortium. The speculation is that this might be a sign of a divergence forming between the two. Adding weight to these rumours is the fact that Circle’s revenue split-sharing agreement with Coinbase is up for renewal this coming August. However, Circle’s Jeremy Allaire has attempted to stifle these rumours, maintaining that Circle’s partnership with Coinbase remains “as strong as ever.”

Nevertheless, the scrutiny continues. We even saw Tether CEO Paolo Ardoino take a jab at Circle by welcoming OUSD as “Player 2” in the stablecoin game. After all, while Tether has focused on building its presence in emerging markets and off-shore remittances, Circle spent the better part of a decade positioning USDC as the go-to stablecoin for regulated on-shore retail and enterprise payments.

A look at OUSD consortium’s extensive partner list will show you that it’s competing in the regulated enterprise-payments corridor, which is the same lane as Circle. To elaborate, we can broadly group OUSD’s 140+ founding partners into four distinct constituencies. The first is banks and TradFi players (BBVA, BNY, DBS, Standard Chartered and BlackRock); the second is payments and card networks (Visa, Mastercard, American Express, Stripe and Adyen); the third is tech giants (Google, Shopify, DoorDash and Samsung) and the fourth is crypto-native infrastructure (Coinbase, Solana, Aave, MetaMask, Morpho and Ripple). Together, they make up the majority of the enterprise and payments infra market.

To get these players on side, the OUSD consortium promised partners three things. The first is that the partner businesses can mint and redeem OUSD with no fees or volume caps. The second is that OUSD will be governed collaboratively through Open Standard, an independent company with a board made up of OUSD’s partners. The third is that OUSD would return most of the reserve earnings back to participating partners after a small management fee.

That last promise is the most lucrative one. For context, a large chunk of Circle and Tether’s revenue comes from the yield they collect on the treasuries and assets backing their coins. OUSD proposes to give that yield away, not to holders but to the partner businesses that route volume through the network. This is a direct financial incentive for every partner to push OUSD adoption inside its own products, as its own payout scales with the coin's circulating supply.

We’re already seeing consortium partners make announcements to that effect. For instance, Stripe has said it intends to make OUSD the default settlement token for businesses transacting on its platform. It’s also worth noting here that Zach Abrams, who previously co-founded Bridge, the stablecoin infrastructure company acquired by Stripe in 2024, has been named founding CEO of Open Standard. As it stands now, Stripe seems to be at the heart of the OUSD consortium.

That said, there is no fixed timeline for the launch of OUSD, with Open Standard only stating that it will go live "later this year." The stablecoin is set to launch natively on Solana, with Base, Stellar and Polygon to follow.

That said, Circle has been putting on a brave face. Circle CEO Jeremy Allaire responded to the negative market chatter by reasserting confidence in Circle’s market positioning. At the heart of Allaire’s rebuttal/response are three points.

The first is that OUSD’s unlimited free redemption is easier to promise than to sustain. He argued that an unlimited free redemption model would eventually see the stablecoin issuer work overtime as an offramp for its competitors too. This will supposedly incur costs that become expensive and risky to sustain. Allaire argues that reality will eventually force some kind of limit, even if the issuer doesn’t call it a "fee."

Allaire states that Circle addresses this pain point through its individual contractual arrangements, cutting costs for big partners case by case without promising it to everyone. He also emphasises that redemption strength comes from actual liquidity, rather than low fees. To that end, he points towards USDC’s deep liquidity, highlighting Artemis data that shows USDC handling close to $30 trillion in on-chain volume in the first quarter of 2026.

His second point is that OUSD’s promise to give away nearly all reserve yield would starve it of an ability to invest in infrastructure. He notes that Circle, while sharing the majority of its reserve income with distribution partners already, deliberately retains enough to reinvest in compliance, liquidity and infrastructure. He highlights Circle’s extensive licences and compliance footprint, alongside its integrations into wallets, exchanges, and platforms, as proof of this model working.

The third point is that consortium governance has a dismal track record. Notably, he drew upon Circle’s own experiment with the Centre Consortium, highlighting its difficult experience with poor coordination, misaligned incentives and slow governance.

To Allaire’s credit, this confidence has been echoed by some Wall Street analysts. Notably, William Blair and Bernstein have both reiterated bullish ratings, with Bernstein holding a price target near $190 for $CRCL. Whether this bullish outlook holds true is something only time will tell. In the meantime, what’s true is that OUSD, while promising, is untested. We share the perspective that the market chatter and hype around OUSD’s threat to USDC may be overblown.

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📖 Quote of the Week 📖

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Team Coin Bureau

Disclosure: Authors may own cryptoassets named in this newsletter. These are unqualified opinions, and a Coin Bureau newsletter, is meant for informational purposes only. It is not meant to serve as investment advice. Please consult with your investment, tax, or legal advisor.