Market Highlights
- President Trump’s “Liberation Day” announcement caused a sell-off across risk assets.
- The STABLE Act passed the House Financial Services Committee with a 32-17 vote.
- SEC Chair nominee Paul Atkins’ appointment passed the Senate Banking Committee vote.
- Ethereum’s Pectra Upgrade scheduled for 7 May launch on the Ethereum mainnet.
Markets Overview
Macro Market Updates:
Thursday, 2 April saw President Trump announce levies of over 10% on at least 180 countries, with China subject to the highest tariffs of 54% (see a country-by-country list here). China retaliated, announcing a 34% levy on all U.S. imports. The Dow Jones declined by 1,600 points, while the S&P 500 and Nasdaq suffered the worst losses since 2020 on Friday, 3 April, following the announcement. The S&P 500 and the Nasdaq finished the week down almost 10%, while the Dow Jones closed down 8.8%. Early trading on Monday, 7 April saw some of Friday’s losses regained after comments from Kevin Hassett, Director of the U.S. National Economic Council, were misinterpreted to suggest that President Trump would pause the new tariffs for 90 days while negotiations occur. The S&P 500 gained 8.5% on the rumours. The sell-off resumed after the White House denied the report.
In economic data, the U.S. non-farm employment change for March came in on Friday, 4 April, and it was above forecast at 228,000. The week finished with a statement from U.S. Federal Reserve Governor Jerome Powell, where he expressed further caution about inflation, distancing himself from the previous “base case” that inflation would be transitory. President Trump has made it no secret that he wants Powell to cut interest rates and “stop playing politics”. This week’s core consumer price index update on Thursday, 10 April will provide an indication of how inflation is tracking in the U.S., and potentially pave the path ahead for the Fed’s rate trajectory.
Crypto Market Sector Performance
It was another week of declines across all market sectors. Data availability, staking services and NFT applications saw the biggest losses. Celestia (TIA) saw the biggest losses within data availability, declining by 19.1% on the week despite asset manager VanEck listing a new exchange-traded product that tracks TIA’s price movements. This demonstrates that market-wide uncertainty is causing significant selling pressure.
Real-world assets (RWA) saw the smallest losses, though gains within the sector were minor. Clearpool (CPOOL) and Mantra (OM) gained 3.5% and 1.2%, respectively. Much of the gains came on Monday, 7 April, presumably due to Mantra’s announcing its US$108 million fund to support RWA tokenisation and DeFi projects.
Bitcoin (BTC)
Bitcoin reached a weekly high of US$88,530 before declining on President Trump’s tariffs announcement on 2 April. Opening the week at US$82,379, bitcoin declined to a low of US$74,420 on Monday, 7 April, as weekend liquidations exceeded US$590 million. Like other risk assets, bitcoin declined this week on the economic uncertainty caused by President Trump’s trade policy. Since the U.S. presidential election in November 2024, bitcoin and tech stocks have seen similar price action, with BTC falling almost 28% from its post-election highs, similar to the Nasdaq’s 25% decline over the same period. The similarities demonstrate that bitcoin currently trades like a risky tech stock, affected by global liquidity and risk, rather than a safe-haven asset. Bitcoin is currently trading at US$79,348, a decrease of 3.7% on the week.
Grayscale launched two new bitcoin exchange-traded funds (ETFs) this week. The Bitcoin Covered Call ETF (BTCC) and Grayscale Bitcoin Premium Income ETF (BPI) allow investors to gain exposure to bitcoin’s price movements using covered call strategies.
Miami-based mining company Hut 8 and American Data Centres Inc., a company backed by investors, including Eric and Donald Trump Jr., are merging. Hut 8 will contribute most of its Application-Specific Integrated Circuit (ASIC) miners to American Data Centres in exchange for an 80% ownership stake. The remaining 20% stake goes to American Data Centres, which has been renamed American Bitcoin. Hut 8 plans to go public in the future.
Minnesota and Alabama each introduced bills to authorise their State Boards to allocate public funds to investing in bitcoin and digital assets. Each state currently has similar bills before the House and Senate — a common method used to fast-track legislation. House File 2946 in Minnesota explicitly cites using public funds to acquire bitcoin, while Senate Bill 283 in Alabama states that public funds be used to acquire digital assets with a market cap of over US$750 billion.
In Texas, Senator Cruz introduced the Facilitate Lower Atmospheric Released Emissions (FLARE) Act. The FLARE Act seeks to capture gas that would otherwise be flared to power bitcoin mining in the state.
This week’s bitcoin buying news included Tether announcing that it added 8,888 bitcoins, worth US$735 million, to its books in the first quarter. Metaplanet used cash-secure put options sold by the company, resulting in 50.3 BTC as premiums, bringing the firm's BTC holdings to 3,896 BTC. Finally, Strategy announced that it recently bought 22,000 more BTC, worth US$1.9 billion, taking the company’s BTC holdings to 528,185 bitcoins.
Bitcoin asset investment products saw outflows of US$207 billion, taking year-to-date inflows to US$1.3 billion.
Past performance is not a reliable indicator of future results.
Ethereum (ETH)
Ethereum saw similar price action this week, starting with some growth before declining on the week’s news. Opening the week at US$1,807, Ethereum declined to a low of US$1,411 on Monday, 7 April.
After a series of issues on the Holesky testnet, the Pectra upgrade, the biggest for Ethereum since transitioning to a proof-of-stake consensus model in 2022, will go live on the Ethereum mainnet on 7 May. The Pectra upgrade will boost scalability on the network and increase validator staking limits to 2,048 ETH.
The burn rate for Ethereum, the metric that tracks how much ETH is removed from circulation, declined to its lowest level since August 2021 this week. Around 53 ETH were burned per day last week, while the supply increased by 3%. Ethereum’s declining burn rate highlights the increasing difficulty for ETH to accrue value since layer-2 scaling solutions gained popularity last year.
Ethereum asset investment products saw outflows of US$37.7 million.
Ethereum is currently trading at US$1,568, a decrease of 13.8% on the week.
Past performance is not a reliable indicator of future results.
Altcoins
Way to go AERGO
- Aergo (AERGO) gained 90.6%, taking its market cap to US$51.5 million. After recently being delisted from Binance, the scalable hybrid blockchain completed a contract address migration, indicating that perhaps active development is occurring on the network. This presumably boosted investor interest.
Single chain gains
- EOS (EOS) gained 25.1%, which takes its market cap to almost US$1.2 billion. The smart contract platform’s gains are presumably due to increased investor interest upon the announcement of the network’s rebranding to “Vault,” as well as the announcement of its new partnership with Canadian crypto exchange VirgoCX to power stablecoin transfers.
DeFi declines
- LeverFi (LEVER) declined by 46%. This takes its market cap to US$15.4 million. The AI-powered DeFi network saw its biggest losses on 1 April, presumably as investors and traders deleveraged ahead of President Trump's tariffs announcement on 2 April.
- Flamingo Finance (FLM) lost almost 37%, which takes its market cap to US$10.1 million. The interoperable DeFi protocol presumably saw losses due to Binance placing a monitoring tag on the network, which signals FLM’s volatility may pose a risk to investors.
Digitisation declines
- LTO Network (LTO) declined by 40.8%, taking its market cap to almost US$14.3 million. The layer-1 network for real-world assets also received a monitoring tag from Binance.
Computer says no
- NKN (NKN) lost 38.9%. This takes its market cap to almost US$20 million. Like FLM and LTO, Binance assigned a monitoring tag to the peer-to-peer network connectivity protocol.
Past performance is not a reliable indicator of future results.
In Other News
Digital asset investment products saw outflows of US$240 million this week due to the economic uncertainty brought about by President Trump’s tariffs. Despite the sell-off across risk assets and crypto ETF outflows, total assets under management (AuM) is relatively stable at US$132.6 billion, a 0.8% increase on the week. Throughout the same week, other asset classes saw AuM shrink, such as the MSCI World index, which saw an 8.5% decline in AuM.
Altcoin digital asset products were mixed this week. Solana and Sui saw outflows of US$1.8 million and US$4.7 million, respectively. Ton Con saw inflows of US$1.1 million, while blockchain equities had their second consecutive week of inflows, with US$8 million flowing into these products.
Other crypto news
- The U.S. SEC announced that it will host its April roundtable on Friday, 11 April, focused on establishing a framework for crypto regulation. The roundtable titled “Between a Block and a Hard Place: Tailoring Regulation for Crypto Trading” will be attended by industry professionals and policymakers, and it will also be available for live stream via the SEC’s website.
- Brian Armstrong, CEO of Coinbase, called for U.S. policymakers to ensure consumers can earn interest on stablecoins, saying that the stablecoin legislation before both houses shouldn’t just focus on protecting banks. Currently, the yield from stablecoins backed by reserve assets such as short-term Treasuries is often awarded to issuers.
- In ETFs, Grayscale filed to register its Grayscale Solana Trust (GSOL) as an ETF on the NYSE Arca. The fund will not participate in staking. It follows the asset manager’s December filing of a 19b-4 form for its Solana Trust. Grayscale also filed to convert its Private Digital Large Cap Fund to an ETF that provides exposure to bitcoin, Ethereum, XRP, Solana and Cardano. Similarly, Fidelity’s filing for a Solana ETF was recognised by the U.S. Securities and Exchange Commission (SEC) this week.
Regulatory
- Paul Atkins, President Trump’s nominee to be the next Chair of the U.S. SEC, passed the U.S. Senate Banking Committee vote 13-11. Atkins’ appointment will now proceed to the Senate floor for a vote.
Stablecoin developments this week:
- First, the U.S. SEC released a statement outlining that the agency generally doesn’t consider the issuance of stablecoins an offer or sale of securities, and that persons involved in minting stablecoins don’t need to register the transactions with the SEC under the Securities Act.
- The U.S. House Financial Services Committee advanced the STABLE Act on Friday, 3 April, with a 32-17 vote. The bill will now proceed to a House vote before progressing to the Senate for consideration and potential vote. The GENUIS Act, the Senate’s version of stablecoin legislation, is due for a Senate vote shortly. The differences between the two acts will need to be reconciled before they pass final votes and proceed to President Trump for signing.
- First Digital USD (FDUSD), a dollar-backed stablecoin, lost its dollar peg this week when Tron founder Justin Sun claimed that the issuer, First Digital Trust, is effectively insolvent. First Digital Trust denied the allegations.
Disclaimer: This assessment does not consider your personal circumstances, and should not be construed as financial, legal or investment advice. These thoughts are ours only and should only be taken as educational by the reader. Under no circumstances do we make recommendation or assurance towards the views expressed in the blog-post. Past performance is not a reliable indicator of future results. The Company disclaims all duties and liabilities, including liability for negligence, for any loss or damage which is suffered or incurred by any person acting on any information provided.
from Caleb & Brown Cryptocurrency Brokerage.
