Daily News | Weak U.S. Economy May Push Fed Dovish; VIRTUAL Market Cap Tops $1B Again

Daily Summary: Fed Rate Cut Odds Drop to 5.1%, but Weak U.S. Data May Prompt Dovish Pivot

According to Farside Investors, U.S. spot Bitcoin ETFs saw a net outflow of $56.4 million yesterday. BlackRock’s IBIT had inflows of $266 million, while Fidelity’s FBTC and ARKB saw outflows of $137 million and $130 million, respectively. Other ETFs experienced only minor outflows. Since February, BTC ETFs had been on a consistent net outflow trend, but have shown signs of reversal since last week—indicating a more optimistic market sentiment. Ethereum ETFs saw lighter activity with net outflows totaling $2.3 million.

CME FedWatch: Just 5.1% Chance of a 25bps Rate Cut in May

With just 7 days and 2 hours left until the next FOMC meeting, the CME FedWatch Tool shows only a 5.1% chance of a 25-basis-point cut in May, and a 94.9% chance of rates remaining unchanged.

Looking ahead to June, the probability of the Fed holding rates steady is 29.9%, with a 66.6% chance of a 25bps cut and a 3.5% chance of a 50bps cut. Traders have now fully priced in four 25bps rate cuts by the end of 2025.

Weak US Data May Prompt a Dovish Shift, Potentially Boosting Bitcoin

Following the release of US macroeconomic data on Wednesday, Bitcoin briefly dipped below $94,000—down 1% on the day—while major altcoins like Ethereum and Solana also declined. The overall crypto market cap fell nearly 4%. The US economy shrank by 0.3% in Q1, falling short of the expected 0.2% growth. Core PCE for March rose 2.6% year-over-year—matching forecasts but lower than February’s revised 3.0%. ADP employment data showed just 62,000 new jobs in April, a sharp drop from 147,000 in March.

David Hernandez, a crypto investment expert at 21Shares, commented: “Fed funds futures now imply the market expects more than four rate cuts this year. With inflation cooling and signs of an economic slowdown, the Fed’s balancing act will be crucial for market direction in the coming weeks.”

Kirill Kretov, senior automation expert at CoinPanel, noted that rate cuts would support Bitcoin via three key channels: weakening the US dollar, improving liquidity, and lowering Treasury yields. “With a -0.3% GDP print and increasing political pressure from Trump, the odds of a dovish Fed pivot are rising. Given the current thin liquidity in the BTC market, even modest inflows could drive sharp price moves.” Market consensus suggests weak economic data could prompt the Fed to start easing earlier than expected.

Layer2 Project Movement Faces Media Allegations After Unusual MOVE Token Sell-Off

Movement Labs’ token, MOVE, faced heavy selling pressure after its TGE (Token Generation Event), with $38 million worth dumped the following day. According to a CoinDesk report, a previously undisclosed market-making agreement gave little-known intermediary Rentech control over 66 million MOVE tokens.

Internal documents reveal that Rentech acted as both Movement Foundation’s agent and a subsidiary of Web3Port—raising serious conflict-of-interest concerns. The domain name for Rentech was reportedly registered on the same day the contract was signed. The agreement granted Rentech borrowing rights over nearly half of the publicly circulating MOVE supply and allowed Web3Port to liquidate tokens and split profits with Rentech if MOVE’s valuation hit $5 billion.

Movement Labs is now investigating whether it was misled into signing a financial deal that gave disproportionate control to a single entity. Co-founder Rushi Manche, who initially introduced the Rentech deal internally, is also under scrutiny. Foundation attorney Pek reportedly called the agreement “possibly the worst contract I’ve ever seen,” citing motivations to pump the price and then dump tokens onto retail investors. All executives, legal advisors, and consultants involved are now under internal review.

Market Analysis: VIRTUAL Soars 30% Intraday; GORK Hits $50M Market Cap Within 5 Hours

Market Highlights

• VIRTUAL (an AI agent project) surged nearly 30% intraday, with its market cap surpassing $1 billion. The team rolled out a new Genesis launch mechanism with transparent developer allocations and auto-locking features, aiming to prevent token sniping and ensure fairness. VIRTUAL once peaked at a $5 billion market cap but is currently trading nearly 80% below that high.
• GORK, a Solana-based meme coin inspired by Elon Musk’s AI assistant Grok, reached a $50 million market cap within 5 hours of launch and is now listed on Moonshot. Notable crypto influencers Ansem and 0xsun disclosed early investments of $113K and $18.8K respectively.

Market Trends

• BTC saw mild intraday volatility. Despite slight BTC outflows and weaker US GDP data, overall market sentiment remained steady. Today’s AHR999 index stands at 0.91—suggesting long-term investors still see good entry opportunities.
• ETH moved in sync with BTC and has not shown independent momentum; ETH/BTC has held around 0.019 since mid-April.
• Altcoins broadly moved higher, although gains were scattered with no strong trend in any particular sector.

Macro News: US Stocks Mixed as Q1 GDP Contracts by 0.3%

US stock indices initially dropped overnight but rallied sharply into the close. The Dow rose 0.35% to 40,669.36, the S&P 500 gained 0.15% to 5,569.06, while the Nasdaq slipped 0.09% to 17,446.34. On the bond side, the 10-year Treasury yield ended at 4.17%, while the 2-year yield—most sensitive to Fed policy—settled at 3.60%.

Q1 GDP contraction raised recession concerns. The U.S. Commerce Department confirmed GDP shrank by 0.3% in Q1, reversing from 2.4% growth in Q4. The report also showed a significant slowdown in consumer spending and a drop in government expenditures. Other data suggest that the economy remains stagnant, with consumer spending growth in Q1 being the slowest since 2023. However, a separate report showed that spending in March rose by 0.7%, beating economists’ expectations of 0.5%.