Here’s what you’ll find in today’s edition:

• How industry execs see the growth of tokenized assets playing out.

• Inflation is still well above the Fed’s target. Here’s how markets are reacting.

• Other economic data is keeping investors on their toes and showing the impacts of tariffs.

Talk around stablecoins, tokenization picking up 

Felix noted he came out of the Digital Asset Summit “incredibly bullish” on stablecoins. He’s not the only one expecting big things around that sector and the broader tokenization category.

After Galaxy CEO Mike Novogratz addressed the firm’s $200 million settlement with the New York Attorney General during this morning’s earnings call, he answered a question on where the firm would focus most of its resources in 2025.

“The first obvious answer is stablecoins, both here and abroad,” he said — for payments, cross-border transactions and beyond.

Stablecoins are “the first real-world asset that’s been tokenized,” he added. And the tokenization of mortgages, collectibles, equities, etc. is coming.

“I keep saying it’s going to be like bankruptcy — it happens real slow, then real fast,” Novogratz said. “It hasn’t happened real fast, but every single TradFi participant is gearing up for that and I think the crypto world is working on that.”

The promise of crypto boosting efficiency and transparency has been held back by a lack of regulatory clarity. That’s changing.

Galaxy said its “close” to the euro-denominated stablecoin it plotted to bring with DWS and Flow Traders. Galaxy’s investment in GK8 is a way for the firm to serve as “an infrastructure technology provider” in this category as adoption picks up, firm executives added. 

Those comments came after NYSE parent Intercontinental Exchange said it plans to explore using Circle’s stablecoin (and Hashnote’s tokenized money fund USYC) within its derivatives exchanges, clearinghouses and data services.

Fidelity is reportedly exploring a stablecoin launch. And we won’t rehash World Liberty Financial’s USD1 here, but the point is there’ve been ample developments with US stablecoin legislation expected as soon as this summer.

A focus at DAS

There was plenty of talk around stablecoins and RWAs at DAS too.

I was on stage with Securitize chief operating officer Michael Sonnenshein last week. It happened to be the one-year anniversary of BlackRock (with help from Securitize) launching its tokenized money market fund, BUIDL. (The full panel starts at 2:12:00 below).

BUIDL recently hit the $1 billion AUM mark and this week launched a new share class on Solana. While stablecoins have “made the crypto system go ’round,” Sonnenshein said, you now have assets onchain that offer a stable value and are yield-bearing. People are waking up to that.

“That conversation I think is well underway, and you’re starting to see OTC desks, market makers and all kinds of participants in crypto beginning to think about these assets in a new way — in many cases the same way they historically relied on stablecoins,” Sonnenshein said. 

Ondo Finance’s Ian De Bode noted that BUIDL (and Ondo’s OUSG) display the benefits of onchain assets — i.e. 24/7 movement, programmability —  to legacy institutions who may want to follow suit with their own offerings.

Rather than believing tokenized MMFs/Treasurys (a roughly ~$5 billion market) will replace stablecoins (market cap of nearly $230 billion), industry execs have noted the powerful combo of the two. Circle alluded to the demand for moving between yield-bearing collateral and cash when acquiring Hashnote in January.

“Tokenization cannot exist without stablecoins,” Alogrand Foundation CEO Staci Warden told me on the DAS main stage. “Because if you have tokenized the asset side but you haven’t tokenized the money side, it just doesn’t work.”

Combining yield with quick transferability is “incredibly potent,” she added. And every TradFi player “will no longer tolerate that their money is just sitting there doing nothing.”

After talking about less liquid tokenization segments (like real estate rental income or airline tickets), she reverted to money market funds when imagining future transactions. 

Perhaps a decade from now, she envisioned, one could buy a coffee with a tokenized MMF sliver. The person being paid then starts earning the yield tied to that fund.

“Cash is an asset, [an] apartment building’s an asset, they’re all assets,” Warden said. “This continuum will get just completely blurred and more liquid.”

— Ben Strack

Permissionless IV is about the people writing smart contracts, pushing protocols forward, and building what’s next.

🚀 Speaker applications are open. Got something real? Take the mic.

🛠 Hackathon locked & loaded. $100K+ in bounties. Your ticket? Covered.

The revenue Galaxy expects to generate over its 15-year lease agreement with CoreWeave — a cloud provider that just went public.

Galaxy revealed today that it plans to deliver 133 megawatts to host CoreWeave's AI and high- performance computing infrastructure at its Helios data center campus in Texas.

Still, GLXY shares were down more than 5% on the day, as of 2:15 pm ET.

The Fed’s preferred inflation gauge ticked higher in February while consumer spending continued to disappoint, painting an uncertain picture for future monetary policy moves. 

Annual core PCE came in at 2.8%, a far cry from central bankers’ 2% target. Economists had projected a 12-month reading of 2.7%. Month over month, core PCE increased 0.4% — again higher than estimates, which were 0.3%. 

Inflation-adjusted consumer spending increased only 0.1% last month, coming in on the lower end of estimates. Analysts had hoped that warmer weather would jumpstart spending after a severe winter across most of the country. 

Spending came in below expectations even as personal income increased 0.8%, compared with projections of a 0.4% increase. 

Expectations for longer-term inflation were also on the rise. The University of Michigan’s one-year projection for inflation is now 5%. It’s the third-straight month the index has increased. 

Fed funds futures markets are now pricing in a 13% chance the Fed opts to lower interest rates in May. 

Stocks, unsurprisingly, did not take the inflation news well. The S&P 500 lost as much as 1.5% in the first few hours of Friday’s session. The index is poised to end Q1 with its worst quarterly performance since 2023. The Nasdaq Composite slid almost 2% in the first half of the trading day. 

The doom and gloom may not last too long, though, eToro analyst Bret Kenwell said.

“Historically speaking, the S&P 500 tends to perform pretty well in mild inflationary environments where annual core PCE is between 2% and 4%,” he explained. “But investors don’t seem to care about historical statistics right now.”

You can say that again. Have a good weekend everyone; here’s to hoping for a better performance next week.

— Casey Wagner

Happy Friday! The final full week of Q1 brought more of the same for stocks as tariffs (both those threatened and enacted) continued to weigh on investor sentiment. 

Aside from the PCE report, other economic data this week showed that while the labor market may be strong for now, slower growth and higher prices are still a concern. 

Here’s a recap: 

• Monday’s S&P flash services PMI showed US business activity picked up in March, which is positive. The report also indicated that companies are paying more for goods, a sign that tariffs are starting to impact industries. On the other hand, headcounts were up — a good sign for the labor market. 

• Initial jobless claims for the week ended March 22 came in at 224,000, which is 1,000 lower from the week prior. The four-week moving average also ticked lower by 4,750. We’re still expecting to see an impact on unemployment filings from government layoffs, though, so take this report with a grain of salt and expect volatility moving forward.

— Casey Wagner

• Bitcoin’s price hovered around $84,000 at 2:15 pm ET — down roughly 3.6% from 24 hours ago. 

• The Federal Deposit Insurance Corporation rescinded the "Notification of Engaging in Crypto-Related Activities" it put out in 2022. The latest guidance clarifies that "FDIC-supervised institutions may engage in permissible crypto-related activities without receiving prior FDIC approval."