The Fed holds rates steady for a sixth straight meeting. Morgan Stanley says the 9-to-5 banking day is dying. And Robinhood slides despite an earnings beat.
The Federal Reserve left its benchmark rate unchanged at 3.50%–3.75% on Wednesday, extending its pause for a sixth consecutive meeting as policymakers continue to wrestle with inflation running above the 2% target. Three committee members dissented, preferring a 25 basis point hike, while nine voted to hold. The decision came against an unusually uncertain backdrop — futures markets had priced in roughly a 35% chance of a hike, a split rarely seen in recent years. Bitcoin climbed above $64,400 and the S&P 500 trimmed earlier losses following the announcement. Gold rose 1.2%. Attention now shifts to Chair Kevin Warsh's post-meeting press conference: Warsh has openly questioned the Fed's traditional reliance on forward guidance and the dot plot, and markets are watching closely for signals that the central bank's communication strategy is changing under his leadership.
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The financial industry is moving toward a world where markets never close, payments settle in real time, and investors expect around-the-clock access — and Morgan Stanley executives say tokenization is the engine driving that shift. Speaking at a digital assets panel, global head of banks research Betsy Graseck declared the "batch processing mentality" a thing of the past: "This is the end of banker hours." Investment strategist Denny Galindo predicted that tokenized money market funds and stocks — which have expanded rapidly in 2026 — will be many investors' first real encounter with blockchain technology, likely before they ever buy crypto directly. The firm is already putting that thesis into practice, having launched spot BTC, ETH, and SOL trading on E*TRADE and a trio of crypto ETFs this year. ETF strategy head Ali Wallace pointed to multi-currency, multi-product funds as the next frontier, while Graseck warned that firms not modernizing their financial rails risk being left behind as flows shift to digital asset infrastructure.
Robinhood topped Wall Street's Q2 expectations — adjusted EPS of $0.62 vs. the $0.43 estimate, record revenue of $1.31 billion — but its stock fell about 4% in after-hours trading. The culprit: crypto revenue dropped 38% year over year to $100 million, offset by stronger activity in options, equities, and prediction markets. The quarter was also one of Robinhood's biggest product pushes in years: the company launched Robinhood Chain, a blockchain network supporting tokenized U.S. stocks for European customers, and unveiled Agentic Trading, a set of AI tools that let users automate investing through third-party AI assistants while keeping manual controls in place. Tokenized equities like GameStop, Nvidia, and SpaceX have emerged among the chain's most actively traded real-world assets. Analysts will now closely watch Coinbase's Q2 results on Thursday for a read on whether Robinhood's crypto slowdown is industry-wide or company-specific.
Welcome to The Protocol, CoinDesk's tech newsletter covering the most important stories in blockchain. I'm Margaux Nijkerk, a reporter at CoinDesk.
This week, we're looking at perpetual futures, also known as "perps," and where they fit into the Ethereum ecosystem.
▮ Network News · Ethereum
For years, Ethereum has been synonymous with decentralized finance. It pioneered onchain financial tools like lending protocols and tokenized assets, which today underpin much of the crypto economy. But one of crypto's fastest-growing sectors, perpetual futures, or "perps," has largely flourished elsewhere.
Where are perps today
Ask traders where onchain perpetuals live today, and the answer is more likely to be Hyperliquid or Solana than Ethereum. That is because perpetuals demand something Ethereum's base layer was never designed to optimize for: extremely fast, low-cost, high-frequency trading.
"Perps require frequent transactions, fast execution, and deep liquidity," said AJ Warner, chief strategy officer at Offchain Labs, the main developer firm behind the layer-2 Arbitrum. "That makes them a natural use case for the Arbitrum platform." The distinction has become increasingly important as decentralized perpetual exchanges mature from crypto-native products into markets attracting institutional attention.
Why Ethereum L1 fell behind
Perpetuals are one of the most demanding applications in crypto. Their exchanges require thousands of rapid-fire updates, liquidations, funding payments, and order executions, all without interruption.
"Perps onchain are really hard," said Brian Smith of the Jito Foundation. "It's not just the average performance that matters, it's the 99.99% success rate. If your perps platform goes down, that's existential risk." Ethereum's security-first architecture made it an ideal settlement layer, but historically its block times and gas costs made it an expensive place to run latency-sensitive trading applications.
Perps on layer-2s
When decentralized perps exchange GMX launched on Arbitrum in 2021, it helped establish a template that many others would follow. "Ethereum mainnet fees were prohibitively expensive, which naturally attracted perps builders to Arbitrum," Warner said. Offchain Labs then leaned into that momentum, actively prioritizing perpetuals as a strategic category.
"By prioritizing the vertical, we were able to attract a concentration of builders and capital to the ecosystem." Today, much of Ethereum's perpetual trading activity lives not on the Ethereum mainnet, but on layer-2 networks like Arbitrum and, increasingly, Base. Ethereum's layer-2 ecosystem has become something of a compromise: preserving Ethereum's security while dramatically improving trading performance. Networks like Arbitrum and Base have reduced block times while also becoming an increasingly attractive trading destination because of their growing user base and liquidity.
Technical performance
Chris Boulous of Dromos Labs, the main developer firm behind Aerodrome, a decentralized exchange that lives on the Base network, argued that technical performance is only part of the story.
"Trading is effectively a network-effects business," he said. "You have to build where the liquidity and users currently exist." That dynamic has become self-reinforcing: protocols launch where traders already are, liquidity providers follow the traders, and then new applications build around existing liquidity. It's one reason Boulous sees Aerodrome as complementary to perpetual exchanges rather than competitive with them.
"You can kind of think of perps as a customer of spot exchanges," Boulous said. Spot exchanges provide pricing, liquidity and hedging opportunities that perpetual markets depend on. "Spot and perps are two sides of the same liquidity coin."
Whether that division of labor persists will depend on how quickly Ethereum can solve some of the challenges its critics point to: fragmented liquidity across layer 2s, better interoperability between networks, and a smoother user experience. If it can, proponents argue Ethereum doesn't necessarily need to become the fastest place to trade perpetuals. It simply needs to remain the deepest and most trusted place to settle them.
Fed decision at 2pm ET today — 35% chance of a hike. Bond yields breaking out. Oil up 20% this month. Ionic Digital surges 26% on Nasdaq debut. Trade.xyz to cover $60M in liquidations.
The Federal Reserve announces its rate decision at 2 p.m. ET today, and for three reasons the outcome matters more than usual. First, markets are still pricing a 35% probability of a rate hike — an unusually high level of uncertainty so close to a decision. Citadel, one of the world’s largest hedge funds, is openly calling for an increase, arguing the move would end forward guidance as a policy tool. Second, both the 10-year and 2-year Treasury yields have broken above trendlines in place since 2023, signaling that the broader upswing in interest rates could soon accelerate. Third, WTI crude oil has surged nearly 20% this month with U.S.-Iran peace talks deadlocked, keeping inflation risk alive and leaving the Fed with little room for dovish talk. A hawkish outcome could push already-elevated bond yields sharply higher, creating a headwind for risk assets including crypto. A dovish surprise, on the other hand, could spark a sharp rally. Either way, stay alert. The Fed’s Chair Kevin Warsh holds his press conference at 2:30 p.m. ET.
Company behind AI trade that caused $60 million crypto liquidations to cover all losses.
Risk-on peace trades are back in vogue after the U.S. and Iran held fire for a second consecutive day, sending oil prices tumbling roughly 5% to around $85 a barrel for WTI. Bitcoin has reclaimed $65,000, up about 1.2% over 24 hours, while ether has surged over 3% to nearly $1,950 â outperforming BTC and hinting at a potential rotation into alternative cryptocurrencies. Solana, XRP, and other top-10 tokens posted 1â2% gains. Nasdaq and S&P 500 futures ticked half a percent higher, and the Aussie dollar and euro strengthened against the U.S. dollar, reflecting broad risk-on sentiment. The diplomatic situation remains fragile: Iran signaled it would continue to halt airstrikes as long as the U.S. did the same, marking a tenuous start to what could be another peace process. Despite etherâs outperformance, BTC dominance held at 58.6%, suggesting the altcoin rally is not yet broad-based. Traders are also keeping one eye on the Fed: markets are pricing a 36.3% probability of a 25-basis-point rate hike at the July 28â29 FOMC meeting, with Brent crudeâs 4.7% drop to $92.19 offering some relief on the inflation front.
Ionic Digital jumps 26% in Nasdaq debut, giving Celsius Network claimholders an exit route.
Ionic Digital (IOND), the bitcoin miner formed out of Celsius Network’s bankruptcy, surged 26% on its Nasdaq debut — the exchange’s largest direct listing since 2021. Shares opened at $50 and closed at $62.90, 19% above the $53 reference price set by Nasdaq, valuing the company at $2.8 billion. The listing gives an exit route to creditors who received Ionic stock as part of Celsius’ court-approved restructuring, with 37 million Class A shares distributed to eligible claimholders. Washington D.C.-based Ionic, which is pivoting from bitcoin mining to AI infrastructure, decommissioned mining at its Ward County, Texas, site in December and committed its 234 MW of capacity to Nscale under a 126-month lease worth $1.95 billion in contracted revenue. The company raised $400 million in June through convertible preferred shares, which converted to common stock upon listing. It holds 2,815.6 BTC worth roughly $192 million, carries no debt, and projects up to $195 million in revenue for 2026 — more than 90% from infrastructure leasing.
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