Market Watch
Things to Watch This Week (May 11 - May 15)
Inflation and Fed Outlook in Focus
Markets will closely watch U.S. inflation data and Fed commentary this week for further clues on the rate outlook. While the labor market remains resilient, investors are looking for clearer signs that inflation is cooling enough to support future rate cuts. Treasury yields and broader macro sentiment are also expected to remain key drivers for risk assets this week.
Random Musing This Week
Coinbase: From Crypto Exchange to Financial Infrastructure
Coinbase’s Q1 2026 earnings showed weaker trading activity and softer-than-expected results, but the more important story was the company’s ongoing transformation beyond a traditional crypto exchange.
Historically, Coinbase’s business was heavily tied to crypto market cycles and spot trading volumes. However, the company is increasingly positioning itself as a broader digital financial infrastructure platform focused on stablecoins, payments, custody, and onchain finance.
One of the biggest drivers of this shift is USDC. Coinbase highlighted that USDC market capitalization reached nearly $80 billion in Q1 2026, while average USDC balances held within Coinbase products grew to $19 billion. The company also noted that it captured roughly 50% of total USDC economics over the past year. This suggests Coinbase is gradually moving away from relying solely on transaction fees toward generating recurring infrastructure-based revenue.
Another key part of Coinbase’s strategy is Base, its Layer 2 blockchain network. Through Base, Coinbase is building an ecosystem for onchain payments, DeFi activity, and digital commerce. Management also emphasized the rise of AI-native finance, arguing that blockchain networks and stablecoins could become the settlement layer for AI-driven economic activity in the future.
At the same time, Coinbase continues diversifying its business model. Derivatives trading volume grew 169% year-over-year, while prediction markets became one of the company’s fastest-growing products. Coinbase’s long-term vision is evolving toward an “Everything Exchange” where users can trade multiple asset classes within a unified onchain financial ecosystem.
Ultimately, Wall Street is beginning to view Coinbase less as a crypto trading app and more as a long-term financial infrastructure company. Stablecoins, custody, tokenization, and onchain settlement are becoming central to Coinbase’s future growth strategy.
Recap of Top Stories (May 4 - May 8)
Top Story of the Week
Wall Street’s Core Plumber, DTCC, Fast-Tracks Tokenized Trading
[Tokenization] [Infrastructure] [Institutional]
The Depository Trust & Clearing Corporation (DTCC) announced a July 2026 live pilot for tokenized securities, with a full commercial launch scheduled for October. The initiative includes over 50 major financial institutions, such as Goldman Sachs, JPMorgan, and BlackRock.
This is the moment the tokenization story stops being theoretical. July tokenized trading of Russell 1000 stocks and Treasuries means that by Q4 2026, institutional investors will be buying Apple and 90-day T-bills on blockchain rails, within a fully regulated clearing framework, at the same institution where they settle every other trade today. The October full launch is the new north star for every RWA narrative in the market.
Also, In Focus
Securitize Secures First-of-Its-Kind FINRA Approval for Atomic Settlement
[Tokenization] [Regulation] [Infrastructure]
On the same day DTCC announced its July pilot, Securitize dropped a press release that deserves equal billing.
The RWA tokenization platform — $4B+ AUM, BlackRock partnership, Cantor Fitzgerald SPAC in progress — received expanded FINRA broker-dealer approval via its Securitize Markets subsidiary.
Crypto Exchange Bullish to Buy Equiniti for $4.2 Billion in Capital Markets Push
[M&A] [Tokenization] [Infrastructure] [TradFi]
Bullish said it will buy transfer agent Equiniti in a deal valued at $4.2 billion, as the cryptocurrency exchange looks to establish infrastructure to bridge blockchain technology with traditional capital markets.
“Tokenization is a once-in-a-generation shift in how capital markets operate,” Bullish CEO Thomas Farley said, adding that the combination provides the “blue-chip issuer relationships” necessary to scale the transition.
Circle France Receives MiCA Authorization — USDC and EURC Now Fully Licensed Across the European Economic Area
[Stablecoin] [Regulation]
Circle’s French subsidiary received authorization from France’s AMF under MiCA to offer crypto-asset custody and transfer services for USDC and EURC.
USDC is now simultaneously: live on Meta’s creator payout platform, FINRA-clearing-compatible, MiCA-authorized across 30 European countries, and Coinbase’s UK loan collateral.
Morgan Stanley Launches E*Trade Crypto Trading at 0.5%, Undercutting Coinbase and Schwab
[TradFi] [Institutional] [Infrastructure]
Morgan Stanley has begun direct cryptocurrency trading on its E*Trade platform, charging clients 50 basis points per transaction, undercutting Coinbase, Robinhood, and Charles Schwab; all 8.6 million E*Trade clients are set to gain access later in 2026.
E*Trade gives Morgan Stanley a distribution channel few crypto-native exchanges can match — roughly 16,000 in-house advisors oversee about $9.3 trillion in client assets.
Upcoming Market Events
May 11 - Clarity act mark up week
May 12 - CPI data release
May 15 - Powell’s last day as Fed chair