US BTC ETFs record biggest inflow since Jan. 14 as AUM remains near peak levels

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The post Stablecoins could face yield compression after Fed’s rate cut appeared on BitcoinEthereumNews.com. The Federal Reserve reduced its policy rate by 25 basis points to 4.00%–4.25%, the first rate cut this year. The move, framed as a response to weakening labor data, signals the start of a cautious easing cycle. Projections show two more cuts possible before year-end, with further reductions likely in 2026. Inflation remains above target, but Chairman Jerome Powell emphasized risk management over immediate price control, prioritizing stability in employment conditions. Stablecoins will be quickly affected by this. Issuers like Tether and Circle have generated large profits by holding reserves in short-term Treasuries during the high-rate environment of the past two years. That income stream now begins to erode. DeFi protocols that offered tokenized Treasury exposure face the same squeeze, with returns set to fall further if the Fed continues cutting into next year. A multi-cut easing cycle could substantially reduce stablecoin profitability, forcing issuers and protocols to adapt. The decline in dollar yields also alters the balance between holding stablecoins passively and seeking higher returns in risk assets. Bitcoin benefits most from this reallocation. As nominal rates move lower and inflation remains sticky, real yields decline, making non-yielding assets more attractive. The weaker dollar and improving risk appetite amplify the effect, positioning Bitcoin as a relative winner of the Fed’s shift. The September cut is modest, but it could bring significant changes to the crypto market. Stablecoin models built on Treasury income face structural headwinds after the rate cut, while Bitcoin and other high-beta assets stand to gain from falling real yields and increased liquidity. The Fed has opened an easing cycle, and crypto’s internal capital flows will move with it. The post Stablecoins could face yield compression after Fed’s rate cut appeared first on CryptoSlate. Source: https://cryptoslate.com/insights/stablecoins-could-face-yield-compression-after-feds-rate-cut/

The post Wormhole Jumps 11% on Revised Tokenomics and Reserve Initiative appeared on BitcoinEthereumNews.com. Cross-chain bridge Wormhole plans to launch a reserve funded by both on-chain and off-chain revenues. Wormhole, a cross-chain bridge connecting over 40 blockchain networks, unveiled a tokenomics overhaul on Wednesday, hinting at updated staking incentives, a strategic reserve for the W token, and a smoother unlock schedule. The price of W jumped 11% on the news to $0.096, though the token is still down 92% since its debut in April 2024. W Chart In a blog post, Wormhole said it’s planning to set up a “Wormhole Reserve” that will accumulate on-chain and off-chain revenues “to support the growth of the Wormhole ecosystem.” The protocol also said it plans to target a 4% base yield for governance stakers, replacing the current variable APY system, noting that “yield will come from a combination of the existing token supply and protocol revenues.” It’s unclear whether Wormhole will draw from the reserve to fund this target. Wormhole did not immediately respond to The Defiant’s request for comment. Wormhole emphasized that the maximum supply of 10 billion W tokens will remain the same, while large annual token unlocks will be replaced by a bi-weekly distribution beginning Oct. 3 to eliminate “moments of concentrated market pressure.” Data from CoinGecko shows there are over 4.7 billion W tokens in circulation, meaning that more than half the supply is yet to be unlocked, with portions of that supply to be released over the next 4.5 years. Source: https://thedefiant.io/news/defi/wormhole-jumps-11-on-revised-tokenomics-and-reserve-initiative