Happy Monday everyone, and welcome back to this week’s market newsletter. Please see below this week’s market data.

Bitcoin Market Update and News

• Bitcoin rises to $85,000: Bitcoin suffered on Monday and Tuesday with the broader market, dipping to as low as $75,000, but it recovered by the end of the week for a 3% rise. Over the weekend, it surged to $85,000 and is $84,900 at the time of publication. Bitcoin’s volatility has actually been less than that of the S&P 500 over the last 10 trading days.

Source: Tephra Digital

• Trump dismantles DOJ’s crypto task force, signs bill to nullify IRS’s DeFi broker rule: The Trump administration has rolled back two Biden-era regulatory actions, one that broadened the scope of Federal prosecution power against cryptocurrency actors via the DOJ and another which expanded the IRS definition of a broker to include DeFi platforms. The DOJ is disbanding its Cryptocurrency Enforcement Team, established in 2022, with a mandate for the DOJ to only prioritize illegal cryptocurrency activity by cartels and terrorist organizations. President Trump also ratified a congressional bill which repeals the IRS tax rule that broadened the definition of broker to include decentralized exchanges as well as other DeFi platforms. The IRS implemented the crypto broker rule in the final days of Joe Biden’s presidency.
• Webull surges to open the week following Nasdaq debut last Friday: Trading platform Webull is experiencing an eye-popping rally to start the week, with the stock surging over 400% today with a $28 billion market cap at the time of publication. Webull debuted on U.S. markets last Friday with a Nasdaq listing after its SPAC merger with SK Growth Opportunities Corporation

Interesting Reads and Videos

• Bitcoin miners front run Trump tariffs with $3M chartered flights
• Bitcoin Hashprice Drops to Seven-Month Low, Pressuring Mining Margins
• When This Trade War Will End: Market Signals to Watch

 Bitcoin Mining Market News and Trends

• Senate Democrats introduce bill to establish emission standards, electricity use reporting for AI data centers,  bitcoin miners: Two Senate Democrats, Sheldon Whitehouse and John Fetterman, have introduced a new bill that would require reporting and emission standards for AI data centers cryptocurrency miners. If the bill becomes law, miners and AI data center operators would be required to submit data regarding their electricity consumption and meet emission standards for their sources of energy. The emissions caps would be region-specific and would be reduced by 11% annually until 2035, after which time data centers would be required to operate on 100% renewable energy. Any firm that exceeds their emissions limit would have to pay a fine.
• Bitdeer to acquire bitcoin mine in Ethiopia, won’t disclose future chip capacity for SEALMINERs: Bitdeer, a public bitcoin miner and ASIC manufacturer founded by former Bitmain frontman, Jihan Wu, is under talks to purchase a bitcoin mine in Ethiopia. The company plans to pay $7.5 million for the turnkey facility and to expand it to 50 MW. Bitdeer follows another Chinese public miner, BitFuFu, in expanding into Ethiopia. Bitdeer also mentioned in its March production update that it will no longer reveal its chip allocation for its SEALMINER ASIC line, citing “current market uncertainty and a significant slowdown in mining rig demand” which make disclosures “no longer … useful.” 

Market Overview

• Trump Administration pauses reciprocal tariffs for all nations but China, exempts computer electronics: President Trump is pausing the proposed reciprocal tariffs on more than 180 nations for 90 days, instituting instead a 10% flat levy during the grace period. China is an exception and has a 125% tariff as of April 9. This weekend, the administration announced that computing devices, such as desktop computers, laptops, smartphones, semiconductor chips, and the like would be exempt from tariffs. 
• Stocks swing wildly on shifting tariff news: Volatility, volatility, and more volatility. Equities suffered heavily on Monday and Tuesday, with the S&P 500 sliding 5% and 6% respectively. But they rallied hard on the tariff-pause news, with the S&P 500 rising 9.5%, the third highest single-day move for the index since 1950. Stocks were down again on Thursday, but climbed on Friday and finished the week in the green in response to the tariff pauses. Week-over-week change at Friday's close:
  • S&P 500: $5,363.36 (+5.7%)
  • Dow: $40,212.71 (+5%)
  • Nasdaq: $16,724.46 (+7.3%) 
  • Russell 2000: 1,860.20  (+1.8%)

Source: Charlie Bilello

• U.S. bond market goes haywire: U.S. Treasury bonds declined last week, driving up yields for the 2-year, 5-year, 10-year, and 30-year. Bond holders have been selling ostensibly in response to uncertainty and shifting expectations regarding U.S. trade policy. Analysts speculated that selling came from European investors, as yields for German Bunds plummeted and the Eurozone 10-year fell, among others. Another hypothesis stipulates that hedge funds have been selling off bonds to meet margin calls triggered by the broader market sell off. Week-over-week change at Friday's close:
  • U.S. 30-Year: 4.88% (+0.46%)
  • U.S. 10-Year: 4.50% (+0.50%)
  • U.S. 5-Year: 4.17% (+0.46%)
  • U.S. 2-Year: 3.98% (+0.34%)
• Oil recovers slightly: U.S. oil prices recovered a sliver of their recent losses last week. WTI closed last Friday at $61.48/barrel, a 1.89% decline. The Dallas Federal Reserve estimates that oil firms need on average a price of $65/barrel to profitably drill, and some investments and operations have been halted during the market rout. 

Source: Dallas Fed via Marcelo Lopez

• Dollar plummets and loses ground against euro, pound:  The DXY declined substantially last week, falling 3.2% to 99.78, the lowest level since July 2023. The euro, pound, and yen respectively gained 3.6%, 2.3%, and 1.4% against the dollar last week.

Source: Noelle Acheson

• Market now pricing in four rate cuts: According to Fed Funds Futures, market participants expect four, 25 bps rate cuts from the Federal Reserve this year in June, July, September, and December. The call for rate cuts has been growing as Treasury yields spike amid the current sell-off. An aim of the Trump Administration’s tariff policy is to lower yields by increasing demand for bonds, driven by projections for an increase in government revenue, shifting capital from equities, and strengthening the USD. Treasury Secretary Scott Bessent emphasized that the government needs to lower current yields to refinance high-interest debt. Now that treasury yields are surging, some are calling for the Fed to step in to drive rates down. 

Source: Charlie Bilello

• Gold continues to shine amid uncertainty:  Gold climbed to yet another all-time high last week above $3,200, marking the fifth week of positive gains in the last six. Gold was up 7% last week at Friday's market close and 23% year-to-date.
• CPI cools to lowest level in nearly five years: March’s CPI print was the lowest since 2021. Headline CPI declined 0.1% month-over-month (versus expectations of a 0.1% rise) and 2.4% year-over-year (versus 2.8% in February). Monthly core CPI increased 0.1% instead of the expected 0.2% and 2.8% annually (versus 3.1% in February). Energy prices factored heavily into the fall in overall inflation levels, declining overall by 2.4% with gasoline falling 6.3%.

The week ahead in data:

• U.S. Bureau of Labor Statistics export and import prices (Tuesday)
• U.S. Census Bureau retail sales (Wednesday)
• U.S. Census Bureau business inventories (Wednesday)
• Federal Reserve industrial production and capacity utilization (Wednesday)
• National Association of Home Builders Housing Market Index (Wednesday)
• U.S. Census Bureau housing starts (Thursday)
• U.S. Department of Labor jobs report (Thursday)

Notable corporate earnings this week:

• Goldman Sachs (Monday)
• Bank of America (Tuesday) 
• Citigroup (Tuesday)
• Johnson & Johnson (Tuesday)
• United Airlines (Tuesday)
• CSX Corporations (Wednesday)
• Netflix (Thursday)
• TSMC (Thursday)
• UnitedHealth Group (Thursday)

Thank you for reading, and please feel free to reach out with any questions.

Christian Lopez