Market Overview

On Tuesday (June 4, U.S. time), U.S. equities saw mixed performance. The Dow Jones declined by 0.22%, while the S&P 500 and Nasdaq posted modest gains. Futures markets tilted downward, with gold falling to $3,397/oz and crude oil sliding to $62.76 per barrel.

Bitcoin continued its pullback, dropping to around $104,000, while most major altcoins also declined. The total cryptocurrency market capitalization decreased to approximately $3.4 trillion.

U.S. Economic Weakness and Trump’s Pressure on the Fed

The latest ADP Non-Farm Employment report revealed a sharp slowdown in hiring, with only 37,000 jobs added in May, well below the forecasted 111,000 and last month’s revised figure of 62,000. This marks the weakest job growth since February 2022.

Former President Donald Trump quickly responded to the data, stating: “ADP numbers just released! It’s too late—Powell must cut rates now. Unbelievable! Europe has already cut rates NINE times!” His remarks reflect rising political pressure on the Federal Reserve to pivot toward monetary easing amid signs of economic softening.

However, despite Trump's calls, the Fed remains independent. The power to cut rates lies solely with Fed Chair Jerome Powell, not the President. Trump has proposed eliminating the debt ceiling and endorses a massive $4 trillion spending plan, claiming it is necessary to avoid economic crisis. He found unexpected common ground with Senator Elizabeth Warren on these proposals, advocating rapid phased deployment of the spending package.

Elon Musk’s Fierce Opposition to Trump’s Spending Bill

Elon Musk openly criticized the spending bill supported by Trump, calling on American citizens to contact their senators and representatives. He warned, “Bankrupting America is unacceptable! Stop this bill!”

Musk advocated for legislation that would avoid deepening the federal deficit or raising the debt ceiling by an additional $5 trillion. He also supported barring incumbent members of Congress from reelection if the federal deficit exceeds 3% of GDP.

Musk warned that interest payments are now consuming nearly 25% of the U.S. federal revenue, raising the risk of cuts to essential services like social security, healthcare, and defense. While Trump supports aggressive stimulus, Musk emphasizes that fiscal discipline is crucial.

The clash between Musk and Trump has intensified, drawing public attention and potentially impacting the reputations of Musk-led firms such as Tesla and SpaceX. Meanwhile, Coinbase CEO Brian Armstrong echoed similar concerns, warning that if U.S. debt remains unchecked, Bitcoin could become the next global reserve currency.

Tariff Update: A Diminishing Market Reaction

President Trump reiterated his view that China’s President Xi Jinping is “very tough and extremely difficult to make a deal with.” Despite this, the market showed limited reaction to his comments, suggesting that traders may be growing desensitized to tariff-related news or are already pricing in future friction.

In Japan, Bank of Japan Governor Kazuo Ueda expressed confidence that Japan’s economy could absorb the impact of Trump’s tariff policies. While he acknowledged potential slowdowns in investment and wage growth, he maintained the central bank's inflation target of 2% and suggested further interest rate hikes may follow.

California Moves Toward Crypto Payment Adoption

California’s Assembly has unanimously passed Bill AB 1180 by a 68-0 vote, allowing government agencies to collect fees and conduct transactions in crypto, under the Digital Financial Assets Law (DFAL). The bill designates the Department of Financial Protection and Innovation (DFPI) as the supervisory body, requiring individuals and firms involved in crypto to register and obtain licenses.

If approved by the Senate and signed by Governor Gavin Newsom, the law would take effect on July 1, 2026, with a pilot program running through January 1, 2031. This positions California alongside states like Florida, Colorado, and Louisiana in recognizing crypto as a legitimate means of payment for public services.

Fidelity Endorses Corporate Bitcoin Accumulation

Fidelity, managing over $4.9 trillion in assets, released a report supporting corporate Bitcoin accumulation. With rising inflation, interest rate volatility, and fiat currency depreciation, more companies are allocating Bitcoin into their treasury.

Notable adopters include MicroStrategy (214,400 BTC), Block Inc. (8,027 BTC), and Semler Scientific, with the latter recently acquiring 185 BTC, bringing their total to 4,449 BTC (~$467 million). The shift is being accelerated by clearer regulatory frameworks such as approved U.S. spot ETFs and new accounting rules that allow companies to mark Bitcoin to market.

SEC’s 2025 Crypto Regulatory Framework

On April 10, 2025, the U.S. Securities and Exchange Commission (SEC) published new guidelines to clarify the classification of crypto assets under federal securities law. The framework aims to refine the application of the Howey Test in digital asset contexts.

The Howey Test still applies, focusing on four elements: monetary investment, expectation of profit, reliance on others’ efforts, and a common enterprise. A token may be considered a security if its price performance is tied to the efforts of a centralized team.

The SEC introduced a new three-factor assessment:

1. Was the token marketed as an investment at launch?
2. Does the token serve a real utility in a decentralized network?
3. Does the development team still control or heavily influence the token?

Tokens likely not considered securities include post-Merge ETH, fully-backed and transparent stablecoins, and utility tokens used solely for transaction fees on decentralized networks.

Tokens likely considered securities include those sold via ICOs, profit-sharing governance tokens, and any token promoted with speculative investment language, especially if issued by centralized teams.

However, gray areas remain—especially for governance tokens that influence revenue allocation or DAOs operating without a clear legal structure. The SEC advises projects to seek legal opinions or request no-action letters, though such letters are rare and apply case-by-case.

SEC Commissioner Hester Peirce welcomed the clearer guidance but warned that subjective interpretation remains a concern, especially for decentralized projects. Coinbase has urged the SEC not to classify tokens with functional utility or clear user value as securities, even if distributed via airdrop.

SEC Shifts from Enforcement to Public Consultation

Following public backlash, SEC Chair Paul Atkins announced an end to the “enforcement first, guidance later” approach. The Commission will now prioritize building frameworks through open community consultation, aiming for more transparency and less regulatory overreach.

Additional Headlines

Brian Quintenz, nominated by Trump to chair the CFTC, will testify before the Senate on June 10. Crypto policy will be a top agenda item, and Quintenz has pledged to divest $3.4 million in crypto-related assets to avoid conflicts of interest.

JPMorgan announced it will allow crypto ETFs, starting with BlackRock's Bitcoin ETF, to be used as loan collateral. This institutional move signifies deeper integration of crypto into traditional finance.

The SEC reaffirmed that most meme tokens are not securities, coinciding with Trump and Melania’s meme coin launch. While politically controversial, Commissioner Peirce stated that investors shouldn’t expect SEC protection in such speculative sectors.

Trump recently disclosed a one-hour call with Russian President Vladimir Putin about Ukraine’s attack on grounded Russian aircraft. While described as constructive, the conversation yielded no breakthrough in peace efforts.

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The U.S. economy is entering a turbulent phase with slowing job growth, heightened fiscal debates, and ongoing geopolitical uncertainty. As Trump pushes for aggressive spending and rate cuts, critics like Elon Musk warn of fiscal collapse. Meanwhile, crypto adoption advances on multiple fronts—from California’s policy shift to SEC regulatory clarity. Institutions like Fidelity and JPMorgan are doubling down on Bitcoin, and states are opening up to crypto payments. Amid fiscal fragility and monetary debate, Bitcoin continues to emerge as a strategic hedge and a symbol of financial sovereignty.

Disclaimer

This article is for informational purposes only and does not constitute financial advice. Always conduct your own due diligence before making investment decisions.