Bonds Breaking

There can be fewer tougher jobs than Fed Chair right now. With an economy still bracing for the full impact of the Hormuz horrorshow, a boss wanting rate cuts ahead of the midterms and bond yields climbing, Kevin Warsh has an unenviable in-tray to deal with. Oh, and inflation is on the rise again too, so… good luck with that. Today’s forward guidance looks at all of the above, plus how progress on the CLARITY Act could spell better times ahead for the crypto market.

Speaking of which, today we take another look at crypto’s current big success story, Hyperliquid. A lot has happened around the project since we last looked at it and some are now even calling it the heir to Solana. Read on for all the info on the perp platform that just won’t quit.

💲  Tether vs Europe 💲

Relations between the US and the EU have been strained recently, but the tension isn’t confined to geopolitics. As stablecoins become an ever-larger piece of the conversation around the future of money, the EU is getting increasingly concerned about the dominance of USD-denominated stables - and they don’t come any bigger than Tether’s USDT.

In today’s video, we look at how the EU’s MiCA regulations have frozen USDT out of the European market, and reveal exactly why the bloc has taken this step. As the world focuses on the hot war in the Middle East, we look at the currency war that’s heating up on both sides of the Atlantic and lift the lid on what the EU’s real endgame is.

You can watch that video here.

📈 Crypto Market Forecast 📈

The bond market is screaming, and if you're not paying attention to it, you're missing the most important story in markets right now. US April CPI came in at 3.8%, marking a three-year high. That alone would have been enough to rattle investors, but the real shock was in the details. Core month-on-month inflation printed at 0.4%, double the 0.2% that markets were expecting. Producer prices jumped to 6% year-on-year. This is not the kind of data that gives central bankers a warm, fuzzy glow.

This is where things get really interesting though. The US 30-year Treasury just auctioned at above 5% for the first time since 2007. That was a $25 billion auction, and the market had to be dragged kicking and screaming to absorb it. Markets are now pricing an 80% chance of a Fed rate hike by April 2027. After two years of rate cut expectations, the conversation has shifted entirely.

Into this mess steps Kevin Warsh, newly confirmed as Fed Chair. Warsh is considered crypto-friendly and market-savvy, having served on the Fed Board during the 2008 crisis. But he inherits perhaps the most challenging macro environment any Fed Chair has faced in a generation. Inflation is reaccelerating. The bond market is in revolt. And the administration presumably wants lower rates to support its agenda. That's a set of constraints that doesn't leave much room for manoeuvre.

And, if you were thinking that perhaps Warsh could print his way out of this one: think again. Any aggressive stimulus or rate cutting would likely send inflation expectations higher, which would push bond yields up even further. The Fed is arguably trapped, and markets are starting to price that in.

On the regulatory front meanwhile, there was genuinely positive news. The CLARITY Act cleared the Senate Banking Committee on an 11-9 vote. Five pro-crypto Democrats crossed party lines to vote in favour, which suggests the bill has broader support than the headline partisan split implies. Fidelity, with its $7 trillion in assets under management, announced its support for the legislation. The bill still needs to clear the full Senate floor, where ethics provisions around the Trump family's crypto holdings remain unresolved.

Bitcoin briefly broke below $79,000 this week, which is significant because on-chain data shows the true market mean, meaning the average cost basis across all active holders, sits right at that level. When Bitcoin trades below its aggregate cost basis, historically it has marked either a capitulation bottom or the start of a deeper correction. ETFs shed $630 million in outflows on Thursday alone, the biggest single-day exit since January.

There is a potential catalyst on the horizon though. Strategy's STRC has a 15th May ex-dividend date, and K33 Research has documented a clear pattern here. Following the April ex-dividend, Strategy purchased 46,872 BTC. If that pattern repeats, we could see significant buying pressure emerge in the coming weeks.

In sum then, we are cautious to neutral in the near term. The bond market is the problem, and until yields stabilise, risk assets will struggle to find their footing. Bitcoin needs to hold $79,000 or risk triggering a wave of realised losses. However, our medium-term view is cautiously constructive.

The CLARITY Act has momentum. Institutional tokenisation is accelerating. Warsh at the Fed is arguably a net positive for crypto. And Strategy's accumulation cycle could provide a bid just when the market needs it most. The next week or two are likely to be choppy, but if macro conditions stabilise even modestly, the setup for higher prices into summer looks increasingly favourable.

🏠 House of All Finance  🏠

Hyperliquid has never been closer to achieving its "House of All Finance" vision than right now.

The volley of developments in recent weeks has made it clear that Hyperliquid is no longer just a fast-growing perp DEX. It’s becoming something larger and more institutional.

For instance, we saw the first Hyperliquid spot ETF (the 21Shares Hyperliquid ETF) go live last week. It now trades on Nasdaq under the ticker $THYP, and recorded roughly $1.8 million in trading volume and $1.2 million in net inflows on day one. For context, this is stronger than the average ETF launch. Bloomberg ETF analyst James Seyffart labelled it a "very, very solid" debut.

That said, we’ll caveat that it’s not in the same bracket of the other altcoin ETF debuts like the Canary XRP ETF ($58 million on day one back in November) and the Bitwise Solana Staking ETF ($56 million day one back in October).

On the flipside, those launches did come at a very different time in the market and were related to coins that were relatively more mainstream than HYPE. While day one numbers for THYP may pale in comparison, the truth is that it has more growth potential than most other assets in the market right now.

Not to mention, many more HYPE ETF products from other issuers are expected to come in the days ahead. The first in that line-up after $THYP is Bitwise’s Hyperliquid ETF $BHYP, which is the first to use in-house staking rather than a third-party staking provider. On that note, 21Shares’ $THYP can also stake a portion of its HYPE holdings through a staking provider like Figment. This generates additional yield for the fund, which is passed on to shareholders. These staking rewards are split roughly seventy-thirty in favour of the trust, with the first distribution scheduled for the end of June.

Beyond ETFs, we’re seeing a more direct form of HYPE exposure among institutional investors. Notably, onchain analyst Lookonchain recently claimed that a wallet (0xb5E4) connected to a cluster of wallets previously associated with Andreessen Horowitz has been accumulating roughly $67M worth of HYPE tokens over the past month. They also noted that a large chunk of these holdings (~$51M worth) has been staked across several wallets.

However, another analyst has contested these claims, stating that the wallet actually belongs to Anchorage Digital and that the purchases are instead made on behalf of Hyperliquid Strategies – a digital asset treasury company publicly trading on the Nasdaq under the ticker $PURR. Regardless of what the truth is, the undeniable reality is that HYPE has been seeing serious accumulation by institutional investors in recent weeks. The staking behavior is especially of note, since it signifies long-term alignment rather than a short-term trade.

This isn’t without good reason.

The recent quarterly report published by the Hyperliquid Research Collective (HRC) reveals the numbers driving this confidence. Over the course of Q1 2026, Hyperliquid generated $215 million in gross revenue; bought back 4.9 million HYPE tokens; TVL settled at $1.69 billion after peaking at $1.8 billion in March; S&P Dow Jones licensed an official benchmark to trade.xyz (a Hyperliquid HIP-3 deployer), and Ripple Prime added institutional support.

This has seen the price of $HYPE itself climb roughly 44%, compared with Bitcoin's 26% drawdown over the same window. More notably, this comes during what HRC calls as “one of the worst quarters” for the broader market since 2018, with the total crypto market cap shedding more than $900 billion.

We even saw the exchange’s overall perp volume drop 15% and average open interest compress 23%. More specifically, perp volume on crypto-specific pairs, which until last quarter was the business that generated almost all of Hyperliquid’s revenue, fell by roughly 32%. In other words, HYPE's relative outperformance is impressive to say the least.

This is largely in part due to the project’s ever expanding product surface. Notably, HIP-3 (builder-deployed perps) allowed external builders to introduce onchain perps for RWAs and stocks. In the ongoing crypto bear market, this has allowed users to instead trade perps on assets like silver, crude oil, equity indices and stocks on the exchange. This is reflected in the numbers. The report shows that HIP-3 deployer volumes nearly tripled within the quarter and reached a third of daily activity by March.

More recently, we saw the introduction of HIP-4 (outcome markets) on Hyperliquid. This introduces binary prediction contracts that settle to 0 or 1 with zero opening fees, full collateralisation, and most importantly the same unified margin account as a trader's perps and spot positions. Many view HIP-4 as a foundational primitive that could greatly expand the financial products on the exchange, and not just as a vanilla prediction market product. Think options, novel insurance contracts, etc. The project is increasingly starting to look more like a prime brokerage platform than a retail product.

To further this vision, we’re seeing the platform optimize for liquidity above all, even if it seemingly comes at the cost of sunsetting some native products. Notably, Hyperliquid announced plans last week to sunset its native stablecoin USDH. All flows will now concentrate around USDC pairs instead, with Coinbase taking over as the official treasury deployer of USDC on the protocol under the upgraded Aligned Quote Asset framework.

After all, the numbers show greater demand for USDC over USDH. Specifically, USDC supply on Hyperliquid sits at roughly $5 billion (double its level a year ago), while USDH never crossed $100 million in circulation, despite nine months of protocol-aligned tailwinds. Native Markets, the team that built and operated USDH, has agreed to grant Coinbase the right to purchase the USDH brand assets, with the stablecoin being "sunset over time" through a feeless redemption window for existing holders.

On the positive side, the new arrangement will see the vast majority of reserve yield revenue from USDC balances flowing back to the Hyperliquid protocol. This is projected to boost Hyperliquid revenues by 22-26%. We’ll also see both Circle and Coinbase stake 500K HYPE each as part of the arrangement. That’s more supply being locked up.

Honestly, the number of crypto investors starting to take notice of HYPE as a tier-1 crypto asset grows by the day. For proof, look no further than defections from die-hard bulls in other altcoin communities. Notably, Jords, one of Solana's most consistently vocal bulls since 2021 and a self-described early ecosystem builder, published a long-form post explaining why he had moved his conviction fully to Hyperliquid. He recollects that the original pitch for Solana, was to be a "light-speed NASDAQ." However, despite years of ecosystem investment Solana never produced a world-class DEX matching that vision. He sees Hyperliquid as the product the Solana thesis was always meant to enable.

Whether Hyperliquid continues to live up the vision is something only time will tell. The next two quarters of HIP-3 deployer adoption and HyperEVM TVL will be one to watch. In the meantime, the House of All Finance thesis has never looked more realistic. It’s a protocol with real cash flows, expanding product surface, and now the deepest stablecoin partnership in DeFi.

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🏆 What's New at CoinBureau.com This Week? 🏆

* Binance and Bitget Comparison: What Sets Them Apart In 2026
* Stacks (STX) Review 2026: The Bitcoin Smart Contract Layer Explained
* PrimeXBT vs Bybit 2026: Which Is Best for Your Trading Style?
* Polkadot (DOT) Review 2026: Complete Guide to Architecture, JAM & Tokenomics
* ELLIPAL Titan 2.0 vs. NGRAVE ZERO: Hardware Wallet Comparison (2026)
* EigenLayer Review 2026: Restaking, EigenCloud, EIGEN and the Risks Explained
* How to Buy Solana (SOL) in 2026: Step-by-Step Beginner Guide
* Best Bitcoin Mining Pools in 2026: Top Options Compared

Press Releases:

* Istanbul Blockchain Week Returns in June 2026 Amid Surging Crypto Adoption in Türkiye
* Istanbul Blockchain Week Launches Institutional Markets Summit: Pioneering Institutional Adoption of Digital Assets

📖 Quote of the Week 📖

This week was a major win with the Clarity Act getting out of markup - but the final hurdle awaits.

“The impediment to action advances action. What stands in the way becomes the way.” - Marcus Aurelius

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.