Bitcoin’s Regulatory Win Overshadowed by Macro Risks: Oil, Yen, and Treasury Yields

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The three risks that could overwhelm <a href="https://jpygbp.com/btc-usd/">bitcoin</a>‘s regulatory tailwind

What to know:

  • The Clarity Act’s advance in the Senate Banking Committee offers U.S. crypto its most concrete path yet toward a comprehensive regulatory framework.
  • Rising volatility in U.S. Treasury yields, a weakening yen near intervention levels and surging oil prices above $100 are tightening financial conditions and pressuring risk assets, including crypto.
  • Despite favorable regulatory momentum, macroeconomic risks — from bond market swings to potential yen carry-trade unwinds and inflationary oil shocks — are outweighing the bullish catalysts for digital assets.

This is an excerpt from CoinDesk newsletter ‘Daybook.’ Sign up here, if you haven’t already.

The cryptocurrency market is facing a mixed situation right now. While a new bill, the Clarity Act, passed a key Senate committee – potentially providing the clearest rules for the industry in the U.S. – the overall economic environment is becoming more challenging.

However, unusual activity in traditional markets – like fluctuating Treasury note prices, big changes in the dollar-yen exchange rate, and oil price swings – suggests a different trend.

U.S. Treasury yields are not only increasing but also becoming more unpredictable. A measure of this volatility, the ICE BofA MOVE index, saw a significant jump of 14.7% on Friday, reaching its highest point since early April. This was the largest single-day increase in months. Because Treasury notes are fundamental to the global financial system and used as key collateral for loans, sharp fluctuations can make investors more cautious and lead to widespread selling of various investments.

Another concern is the Japanese yen, which has recently fallen in value, moving from 155 to almost 159 yen per dollar. If it reaches 160 yen per dollar, the Bank of Japan might step in to stop it from falling further. This intervention would likely increase the yen’s value, potentially causing investors to close out their yen-based investments made to profit from the difference in interest rates.

The USD/JPY exchange rate, currently between 158 and 159, is nearing 160, a level that could trigger currency market intervention. QCP Capital, a firm based in Singapore, notes that this could also force traders to close out their yen-carry trades quickly, potentially reducing the availability of funds that have recently supported investments in riskier assets.

Oil prices remain high, with both WTI and Brent crude staying above $100 a barrel and potentially rising further. Fatih Birol, head of the International Energy Agency, cautioned on Monday that oil supplies are dropping quickly due to tensions with Iran and disruptions to shipping through the Strait of Hormuz. Current stockpiles might only last a few weeks. Higher oil prices could worsen inflation, make borrowing more difficult, and potentially lead to widespread selling of assets, including cryptocurrencies.

As a researcher, I’m seeing that even good changes in regulations can be overshadowed by larger economic trends. Currently, those broader economic forces are having the biggest impact.

Today’s signal

According to PeckShield’s data, hackers have stolen a total of $328 million this year through eight separate attacks targeting bridges (blockchain infrastructure connecting different networks).

As a researcher in this space, I’ve been studying how bridges work, and essentially they’re solutions for connecting blockchains that weren’t originally built to talk to each other. When you want to move an asset from one blockchain to another using a bridge, the process usually involves locking up the original asset on the first blockchain. Then, a corresponding ‘wrapped’ version of that asset is created on the second blockchain. This all relies on smart contracts on both sides, plus communication happening off-chain, and systems to verify everything is working correctly – often using oracles and networks of validators to approve the transactions.

Essentially, many things happen at once, creating several ways for attackers to exploit vulnerabilities.

We need to thoroughly review the code behind bridges and related systems, just like we do with smart contracts themselves.

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2026-05-18 14:32