Morning Briefing
Today’s Top Stories
- Crypto majors slipped about 1% following the hawkish FOMC, with Bitcoin trading near $64,000.
- Saylor’s Strategy (STRC) fell to $89, a new low, while MicroStrategy (MSTR) declined 5%.
- Illinois enacted the nation’s first state‑level crypto tax, imposing a 0.2% levy on broker transactions and holdings.
- The CME has filed a lawsuit challenging the CFTC’s recent approval of perpetual futures in the United States.
- Moody’s introduced on‑chain credit ratings for assets on the Solana blockchain.
Fed Chair Kevin Warsh’s Hawkish Stance After First FOMC Meeting
The Federal Reserve maintained its target range at 3.50% to 3.75% during Wednesday’s policy meeting, marking the fourth consecutive hold under Chair Kevin Warsh’s inaugural session. While the hold was anticipated, Warsh’s notably hawkish demeanor was not.
In its pre‑meeting dot‑plot update, the Fed raised the median year‑end 2026 rate forecast to 3.8%, up from 3.4% in March, indicating that at least one rate hike is now expected this year rather than a cut. Approximately half of the participants projected a hike as early as 2026, citing a resilient labor market and inflation at a three‑year high. Notably, Warsh chose not to submit a personal projection.
The hawkish tone was further reinforced by Warsh’s subsequent commentary. During the press conference, he emphasized the Fed’s dedication to price stability, signaling that the expected modest easing may not materialize under his leadership. He explicitly stated that achieving the 2% inflation target is paramount and that policy will be geared toward that objective. Markets interpreted this as a clear indication that additional rate hikes are likely.
Market reaction was pronounced. The two‑year Treasury yield surged more than 16 basis points to 4.22%, and the Dow dropped 507 points after briefly touching a record high earlier in the session. Rate expectations shifted sharply: the probability of a September hike climbed to roughly 70%, with a 20% chance of a double‑hike, up from about 30% a day earlier. The December meeting contract now assigns an 88% probability of at least one hike, while expectations for any 2026 rate cut have evaporated.
These developments have significant implications for the crypto market’s anticipated summer recovery and the oft‑cited “winter is over” bounce. That narrative relied on an end‑to‑geopolitical tension and easing monetary conditions; a hawkish Fed reverses that premise, with rising yields, a stronger dollar, and no imminent cuts tightening risk‑asset environments. Consequently, Bitcoin slipped to $64,000, MicroStrategy declined 5%, and Strategy (STRC) hit a fresh low of $89. While equities have rebounded in early trading, the adverse impact appears concentrated in crypto, possibly driven by the heightened scrutiny surrounding Saylor’s holdings.
Regardless, the outlook suggests a summer of heightened volatility and the possibility of continued downward pressure.
Illinois Enacts First State Crypto Transaction Tax
Illinois Governor J.B. Pritzker signed a $55.9 billion budget that incorporates the Digital Asset Privilege Tax Act, imposing a 0.2% levy on cryptocurrency transactions effective January 1, 2027. This makes Illinois the first U.S. state to tax digital‑asset transactions directly, rather than solely taxing realized gains.
In practice, the tax applies to crypto brokers, exchanges, custodians, and platforms that facilitate the exchange, transfer, or storage of digital assets on behalf of users. These entities must register with the state, remit 0.2% of each transaction’s value, and could face felony penalties for non‑compliance. The rule also captures out‑of‑state brokers once their Illinois‑related sales exceed $100,000. The measure is expected to generate roughly $60 million in revenue.
Industry groups are particularly concerned that the cost will be passed on to end users. Because the tax functions as a sales tax triggered by any activity involving a customer in Illinois, brokers are expected to recoup the levy directly from users. Consequently, an Illinois resident who purchases, sells, transfers, or merely holds cryptocurrency on a platform such as Coinbase will incur a 0.2% fee on each taxable transaction, not merely on annual gains. In short, the tax applies each time Bitcoin is held, bought, sold, or moved.
Moreover, the precedent set by Illinois could encourage other states to adopt similar levies, and there is the possibility that the rate could be incrementally increased over time.
Given that the provision was appended to the budget at the last minute, Governor Pritzker has already signed it, and the legislature is currently out of session, there is limited near‑term opportunity to amend the law before it takes effect in 2027. Legal challenges appear to be the most viable avenue for opposition, and early indications suggest that such actions are already being contemplated.
Macro Crypto and Markets
Meme Coin Tracker
Corporate Treasuries and Exchange‑Traded Funds
Meme‑Coin Price Tracker
Myriad Market of the Day
Token, Airdrop & Protocol Tracker
Current Developments in the NFT Space
- NFT leaders remained largely unchanged; CryptoPunks held steady at 33.5 ETH, Bored Ape Yacht Club slipped 2% to 9 ETH, Pudgy Penguins held steady at 4.48 ETH; Hypurr’s declined 5% to 239 HYPE
- Top movers included World Flag (+150%) and Hilma af Klint (+800%).
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