A group of Democratic senators has reportedly sent a letter to leadership at the US Department of Justice and the Treasury Department expressing concerns about US President Donald Trump’s ties to cryptocurrency exchange Binance and potential conflicts of interest in regulating the industry.

According to a May 9 Bloomberg report, Democratic senators asked Attorney General Pam Bondi and Treasury Secretary Scott Bessent to report on the steps Binance had taken as part of its November 2023 plea agreement with US authorities, amid reports that Trump and his family had deepened connections with the exchange.

That settlement saw Binance pay more than $4 billion as part of a deal with the Justice Department, Treasury, and Commodity Futures Trading Commission, and had then-CEO Changpeng “CZ” Zhao step down.

However, since Trump won the presidency in 2024, many lawmakers have accused the president of corruption from profiting off crypto while being in a position to influence laws and regulations over the industry.

Trump has launched his own memecoin — which earns the project millions of dollars in transaction fees — and offered the top tokenholders the opportunity to attend an exclusive dinner in Washington, DC. His family-backed crypto venture World Liberty Financial also recently announced that an Abu Dhabi-based investment firm, MGX, would settle a $2 billion investment in Binance using the platform’s USD1 stablecoin.

“Our concerns about Binance’s compliance obligations are even more pressing given recent reports that the company is using the Trump family’s stablecoin to partner with foreign investment companies,” the senators said in the letter, according to Bloomberg.

Related: Trump tricked into pushing XRP for crypto reserve: Report

Stablecoin bill fails to pass the US Senate

The letter came less than 24 hours after some of the same senators blocked a crucial vote on a bill to regulate stablecoins, named the GENIUS Act. Senator Elizabeth Warren, who reportedly signed the letter and opposed moving forward on the stablecoin bill, suggested the Senate should not be aligned with “facilitat[ing] this kind of corruption” from Trump.

Bessent said the Senate “missed an opportunity” by not passing the stablecoin bill, but did not directly address any of the concerns over Trump’s crypto interests. It’s unclear if or when the chamber could consider another vote on the bill.

In an April 23 report, the nonpartisan organization State Democracy Defenders Action said roughly 40% of Trump’s net worth was tied to crypto. The group noted that the GENIUS Act, in its current version, “would not prevent President Trump from using his executive powers to establish a regulatory environment and enforcement agenda that prioritizes his personal enrichment over the broader interests of US stakeholders.”

Amid the concerns with the stablecoin and proposed market structure bills, Zhao reportedly applied for a federal pardon from Trump. Though the former CEO already served four months in prison, a pardon for his felony charge could allow him to get more involved with the crypto industry through a management position.

Magazine: Trump’s crypto ventures raise conflict of interest, insider trading questions

Ethereum’s Pectra upgrade doesn’t pose a threat to decentralization, according to Mallesh Pai, senior research director at blockchain software firm Consensys, describing the update as a cleanup of the behind-the-scenes “busy work” currently handled by validators.

During a May 9 Cointelegraph X Space, Pai said a validator’s chances of proposing a block or earning rewards remain tied to how much ETH they hold, adding that larger validators don’t gain any new advantages under the upgrade:

“Rewards continue to be proportional to the amount of ETH you have. […] it’s not the case that if you’re a big validator, you somehow have any more advantages than you did before.”

Pectra is Ethereum’s most extensive network upgrade since the Merge took place in September 2022. Pectra allows validators to stake as much as 2,048 ETH, up from the previous limit of 32 ETH. The new standard has raised community concerns about the risks of centralization on the network.

According to Pai, the Pectra upgrade has taken “a bunch of busy work that the network was doing behind the scenes and removed it.”

Pai noted that while there are about a million technical validators on Ethereum, many aren’t truly distinct — large validators often operate numerous virtual keys from a single physical machine. With the Pectra upgrade, those keys can now be consolidated — something he says they are already seeing.

“In the best case, we’ll get to about 30,000 validators,” he said, adding that this consolidation reduces auxiliary work and enables network stakeholders to focus on what matters, such as lowering gas limits.

Related: Ethereum Pectra upgrade adds new features — How long before ETH price reacts?

New Pectra staking limit paves the way for institutions

The new limit could pave the way for institutions to stake ETH, according to Artemiy Parshakov, vice president of institutions at Ethereum staking service P2P.org. “EIP-7002 makes institutional staking much easier to integrate without taking too much risk.”

Ether staking within exchange-traded funds has been a hot topic in 2025. BlackRock has said that the successful Ether ETFs are less perfect without staking, and multiple financial institutions have filed for amendments to their Ether ETFs to allow for staking.

If approved, investors might be more inclined to buy into the ETFs, as they could receive yield. The SEC has yet to rule on staking amendments.

Bloomberg ETF analyst Eric Balchunas recently forecast in a podcast interview that if staking were to be approved for Ether ETFs, it would have “a little impact” on inflows. “The bigger problem with Ethereum is performance; it just doesn’t ever go on a nice long rally.”

Magazine: Pectra hard fork explained — Will it get Ethereum back on track?

Key takeaways:

Bitcoin’s price closely tracks global liquidity growth, with liquidity explaining up to 90% of its price movements, according to Raoul Pal.

In the long term, global liquidity continues to expand, driven by the increasing debt levels in many countries.

On a shorter timeframe, global liquidity follows a cyclical pattern, with Michael Howell projecting the current cycle to peak by mid-2026.

Bitcoin (BTC) price is notoriously sensitive to global liquidity. Some analysts go as far as calling their correlation near-perfect, with a lag of about three months. This relationship is fueling the current bullish narrative as BTC price soars back above $100,000, but how long can this trend last?

Liquidity is Bitcoin’s silent price driver

Raoul Pal, the founder of Global Macro Investor, recently gave a speech on the strong correlation between Bitcoin and global M2 liquidity. In a recap posted by Paul Guerra, Pal’s message refers to: despite looming concerns—recession risks, geopolitical tensions, and other global stressors—rising liquidity as the dominant force behind asset price action. 

According to Pal, expanding liquidity backs up to 90% of Bitcoin’s price action and as much as 97% of the Nasdaq’s performance. Indeed, a chart comparing global M2 (with a 12-week lead) and Bitcoin’s price shows an almost uncanny alignment.

Global M2 and BTC/USD. Source: Real Vision

Pal also frames the issue in personal finance terms. He says there’s an 11% “hidden tax” on all of us, composed of 8% currency debasement and 3% global inflation. He notes,

“If you’re not earning more than 11%/yr, you’re getting poorer by definition.”

Bitcoin has returned an average of 130% annually since 2012, despite dramatic drawdowns. That makes it one of the most asymmetric bets of the past decade—and it’s outperformed the Nasdaq by over 99%.

What drives global liquidity?

At its core, global liquidity is fueled by expanding the money supply. As independent investor Lyn Alden puts it,

“Fiat currency systems are primarily based on ever-growing debt levels. The money supply continuously grows in every country for this reason.”

This offers a high-level view of global liquidity and suggests its long-term expansion is structural. However, this growth isn’t linear. Over shorter time frames, it fluctuates based on specific drivers. Michael Howell, author of “Capital Wars,” identifies three main drivers currently impacting global liquidity: the US Federal Reserve, the People’s Bank of China (PBoC), and banks lending through collateral markets.

Global liquidity drivers. Source: Michael Howell

Howell also points to indirect influences that act with a lag of 6 to 15 months. These include the world business cycle, oil prices, dollar strength, and bond market volatility. A weak global economy and a softening dollar typically boost liquidity. But rising bond volatility tightens collateral supply and chokes lending, undermining liquidity.

Related: New bull cycle? Bitcoin’s return to $100K hints at ‘significant price move’

How long will global liquidity rise?

Michael Howell believes that global liquidity moves in roughly five-year cycles, and is now on the way to its local peak. He projects the current cycle to mature by mid-2026, reaching an index level of around 70 (below the post-COVID index of 90). That would mark a turning point, with a subsequent downturn being a likely outcome.

Global liquidity cycle. Source: Michael Howell

The recent growth in global liquidity stems from the rapidly weakening world economy, which is likely to prompt further easing by central banks. The People’s Bank of China has already begun injecting liquidity into the system. The Fed now faces a tough choice: continue fighting inflation or pivot to support an increasingly fragile financial system. At its May 7 meeting, rates were held steady, but the pressure on Chair Jerome Powell is mounting, especially from US President Donald Trump.

At the same time, economic uncertainty is driving up US Treasury yields and fueling bond market volatility, both indicators of collateral scarcity and tightening credit conditions. Over time, these pressures are likely to become headwinds for liquidity expansion. Meanwhile, a looming recession is expected to weaken investor risk appetite, further draining liquidity from the system.

Even if a downturn lies ahead in 2026, global liquidity still has room to run, at least through 2025. And that matters for Bitcoin.

Howell notes,

“The likely inevitable policy response of ‘more liquidity’ is a great future omen. It establishes the upward path of persistent monetary inflation that ultimately underpins hedges such as gold, quality equities, prime residential real estate, and Bitcoin.”

Interestingly, Howell’s liquidity cycle roughly aligns with Bitcoin’s four-year halving cycle. The former points to a potential peak in late 2025, and the latter in early 2026. If history rhymes again, that convergence could set the stage for a major price move.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.