Kollab3 Weekly Alpha: Political Heat, Stablecoin Momentum, and Bitcoin Buys
In a week marked by intensifying tensions in U.S. monetary policy and pivotal movements in the crypto sector, we delve into the latest developments that are shaping the landscape for digital assets.
Trump vs Powell: Rate Fight and Stablecoin Moves
Tensions between Donald Trump and Fed Chair Jerome Powell are at a boiling point, with reports revealing that Trump is considering firing Powell over his reluctance to cut interest rates. This escalating conflict threatens the independence of the Federal Reserve, with White House adviser Kevin Hassett confirming that the option to dismiss Powell is "under review."
Despite the political pressure, Powell remains steadfast, affirming his intention to serve his full term through 2026. Amidst this backdrop, Powell has reiterated the need for a clear legal framework for stablecoins, highlighting their increasing mainstream adoption and the necessity for consumer protections. As bipartisan support grows, a stablecoin bill is nearing completion, which could pave the way for the formalization of regulations governing these digital assets.
Strategy Adds $286M in Bitcoin
In the realm of institutional investment, Strategy - formerly MicroStrategy - has purchased an additional 3,459 Bitcoin for approximately $285.8 million, raising its total holdings to 531,644 BTC, valued at over $45 billion. Interestingly, this purchase was financed by the sale of nearly 1 million shares of MSTR. This transaction marks Strategy’s third consecutive weekly buy, signaling a continued bet on Bitcoin, despite revealing nearly $6 billion in unrealized losses in the first quarter of 2025.
Unichain Launches Incentive Program
On a positive note, Unichain has initiated an incentive program aimed at boosting liquidity within its ecosystem. This strategic move has resulted in a 10x increase in Total Value Locked (TVL), soaring from $20 million to around $200 million. In addition, liquidity metrics have shown remarkable growth, jumping from $2.5 million to over $130 million, reflecting a 50x increase. The daily trading volume has also surged from $386,000 to $38 million, a staggering 100x increase.
Ethena & Securitize Set Q2 Mainnet Launch for Converge
Exciting developments are on the horizon as Ethena and Securitize prepare to launch Converge, a new Ethereum-compatible blockchain designed specifically for Real-World Assets (RWA). The target for the mainnet is set for Q2 2025, and the platform will utilize Arbitrum for scalability alongside Celestia for data availability. This ambitious project seeks to merge the realms of traditional finance (TradFi) and decentralized finance (DeFi), with plans to attract significant institutional capital onto the blockchain.
DWF Labs’ $25M Investment in WLFI
In another noteworthy development, DWF Labs has invested $25 million in World Liberty Financial (WLFI), securing a governance stake and pledging liquidity support for the stablecoin USD1. This investment aims to fortify WLFI's position in the market, with intentions to launch an institutional-grade stablecoin backed by U.S. Treasury bills and cash equivalents.
Additional Crypto News:
VanEck aims to launch a crypto-related investments ETF next month.
Base scrutinized over the promotion of a token that briefly crashed by 95%.
Fed Chair Jerome Powell signals potential loosening of crypto rules for banks.
Panama City to accept crypto for taxes, permits, and fines via bank conversion.
OKX to expand in the U.S. following a $500 million DOJ settlement.
Visa joins Paxos and Robinhood for USDG stablecoin consortium.
MANTRA's 88% crash sparks over $71 million in liquidations.
Why it Matters
The ongoing disputes surrounding Powell's leadership at the Fed and crypto regulation developments are pivotal to understanding upcoming market dynamics. Firing Powell would have serious implications for the Fed's independence, potentially destabilizing global markets. Conversely, establishing clear regulations for stablecoins could enhance U.S. leadership in the crypto space and legitimize dollar-backed digital assets.
Our Take
Navigating the complexities of monetary policy and digital asset regulation will significantly impact investor confidence as we approach 2026. It's crucial to stay informed and prepared for the changes ahead in both the traditional financial landscape and the rapidly evolving world of crypto.
Stay tuned for more updates as we continue to track these critical developments in the crypto industry.