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 holds on Friday, falters over the weekend: Bitcoin was one of the few assets in the green last week, but the party didn’t last. It sold off over the weekend to $75,000, and at the time of writing, it is down 6% week-over-week to ~78,000. Many analysts heralded bitcoin’s performance last week – and on Friday especially – as evidence that king crypto is decoupling from the stock market, particularly with the Nasdaq. The weekend sell-off challenges these assumptions, but the coming months will be telling for whether or not investors are indeed evolving their view of bitcoin from a tech-stock adjacent asset to a risk-off one like gold. 
• Lowenstein Sandler releases crypto task force tracker: The Lowenstein Sandler lawfirm has released a crypto task force tracker for industry professionals to keep tabs on crypto policies coming out of D.C. The tracker lists notable meetings between crypto stakeholders and regulators and includes a summary of each meeting plus links to relevant materials. 

Interesting Reads and Videos

• The Emerging Bitcoin-Native Venture Capital Landscape
• AI’s Impact on the Investing Landscape
• American Compass Founder Oren Cass on Trump’s Tariffs

 Bitcoin Mining Market News and Trends

• Hut 8’s big bet on Trump-affiliated American Bitcoin: The Trump family officially has skin in the bitcoin mining game, adding to its growing portfolio of crypto-related ventures which includes the World Liberty Financial DeFi venture, memecoins, and NFTs. Last week, Hut 8 announced that it would be peeling off 10 EH/s of its self mining fleet – virtually all of its self-mining capacity – and allocating it to American Bitcoin, a subsidiary that is itself a rebrand of Eric Trump and Donald Trump Jr.’s American Data Centers Inc. Hut 8 will retain an 80% stake in American Bitcoin and Eric Trump will serve as the company’s chief strategy officer. Hut 8 CEO Asher Genoot expressed that the move allows the company to divide and conquer different aspects of the business, with American Bitcoin overseeing self-mining bitcoin operations while Hut 8 focuses on infrastructure and AI/HPC.
• Cango to sell its auto finance business for $352 million: Cango, a Chinese bitcoin mining company with Bitmain ties which operates 32 EH/s, is proposing to sell its auto finance business for $352 million to Ursalpha Digital Limited. Ursalpha shares an office and founding director, Chiu Chang-Wei, with Antalpha, the financial arm of Bitmain. An undisclosed amount of Cango will reportedly change hands if the transaction goes through.
• IREN to pause hashrate expansion once it reaches 52 EH/s: One of the largest public miners at 37 EH/s, IREN stated in its March update that it will put a hiatus on its hashrate expansion once it reaches 52 EH/s to focus on AI/HPC. IREN is currently developing 50 MW for AI load at its Childress, TX center, and it is in the planning stages to erect a 2 GW campus with two data centers dubbed Sweetwater 1 and 2 in Texas for AI load (estimated completion in 2027).

Market Overview

• Trump Administration introduces global tariffs: The Trump Administration rolled out blanket tariffs on all of the United States’ trading partners last week in a move that rocked markets. The vigorous tariff schedule includes a minimum 10% levy on all goods entering the U.S., plus a sliding scale for reciprocal tariffs and goods from specific countries. The methodology for the reciprocal tariffs essentially amounts to taking the trade deficit the U.S. runs with a given country and dividing it by that value of that country’s exports to the U.S., with a few notable exceptions for specific countries and certain products (U.K. goods, for example, are subject to 10% tariffs, while copper, pharmaceuticals, semiconductors, and lumber will not be subject to reciprocal tariffs and bullion will be exempt from tariffs). U.S. Economic Council Director Kevin Hassett reportedly claims that over 50 countries have reached out to negotiate trade deals following the mass tariff roll out.

• Stocks suffer through worst week in five years: Equities experienced a historic sell-off on the tariff news in the worst week for U.S. equities since the March 2020 COIVD crash. The Russell 2000 fell to its lowest level since December 2023, and futures for the index were down 4.4% in after-market trading hours on Sunday. The Dow fell 9.3% over Thursday and Friday, the 20th worst two-day decline in the index’s history. The bloodbath has officially pushed the Nasdaq and Russell 2000 into a bear market, with the indices down 22.2% and 25.8% from the all-time highs, respectively. 
  • S&P 500: $5,074.08 (-9%)
  • Dow: $38,314.86 (-8%)
  • Nasdaq: $15,587.79 (-10%) 
  • Russell 2000: 1,827.03  (-10%)

• International stocks share in the market rout: The panic that infected U.S. equities pervaded markets around the world. Popular indices in Europe and Japan absorbed heavy losses, while indices in China declined slightly. Below are some weekly changes to notable international indices:
  • Europe: STOXX Europe 600 (-8.4%)
  • Italy: FTSE MIB (-10.6%)
  • Germany: DAX (-8.1%)
  • France: CAC 40 (-8.1%)
  • U.K.: FTSE 100 (-7%)
  • Japan: Nikkei 225 (-9%)
  • Japan: TOPIX (-10%)
  • China: CSI 200 (-1.4%)
  • China: Shanghai Composite (-0.3%)
  • Hong Kong: Hang Seng Index (-2.5%)
• Oil takes a beating:
  • U.S. oil prices didn’t escape the market route. WTI closed last Friday at $62.32/barrel, a 10.3% decline which puts oil at its lowest point since April 2021 and marking the worst weekly sell-off since 2023. 
• Treasury yields slip: U.S. Treasury Bonds gained last week as investors flocked to safety, pushing their yields down to their lowest levels in recent months. The 10-Year, 5-Year, and 2-Year respectively hit local peaks of 4.79%, 4.59%, 4.40% in January. Week-over-week changes:
  • 10-Year: 4.00% (-0.20%)
  • 5-Year: 3.71% (-0.23%)
  • 2-Year: 3.64% (-0.24%)
• Dollar falls amid market panic:  Tariff-inspired trade uncertainty to a toll on the dollar last week, with the DXY falling 1.5% over the week. The index is down 5% year-to-date and 1.22% year-over-year.
• Canada, Mexico GDP 2025 forecasts plummet: Forecasts for this year’s GDP for Canada and Mexico have fallen off a cliff in light of the Trump Administration’s tariffs. The United States is a key trading partner and net importer of goods from both nations, and economists now anticipate that the slew of tariffs against both countries will meaningfully hamper their GDP for 2025. Economists surveyed by Bloomberg forecast 1.45% and 0.52% GDP growth respectively for Canada and Mexico, versus roughly 1.7% for each nation in July 2024. 

• Manufacturing activity contracts in March as prices rise:  The Institute for Supply Management’s March Product Manufacturing Index (PMI) revealed that manufacturing capacity contracted last month amid rising prices. PMI came in at 49, down from 50.3 in February and entering contraction territory. The index for new orders dropped significantly to 45.2 from 48.6 and the production index fell to 48.3 from 50.7 as demand softens; relatedly, employment dipped to 44.7 from 47.6. Price paid jumped significantly to 69.4, a 33-month high according to the report. 
• Employment rises significantly in March: One silver lining in a week of bearish news, employment was up substantially in March. According to the Labor Department’s most recent update, nonfarm payrolls increased by 228,000 last month, a big jump from February’s revised read of 117,000 and March expectations of 130,000. Even so, unemployment rose to 4.2%. 

The week ahead in data:

• Federal Reserve Consumer Credit report (Monday)
• NFIB Small Business Optimism Index (Tuesday)
• U.S. census Bureau Wholesale Inventories (Wednesday)
• Federal Reserve March 18-19 meeting minutes release (Wednesday)
• U.S. Treasury Department federal budget (Thursday)
• U.S. Bureau of Labor Statistics CPI (Thursday)
• U.S. Department of Labor jobs report (Thursday)
• U.S. Bureau of Labor Statistics PPI (Friday)
• University of Michigan Consumer Sentiment Index preliminary result (Friday)

Notable corporate earnings this week:

• Levi Strauss (Monday)
• Dave & Busters (Monday) 
• The Greenbrier Companies (Monday)
• CWD-40 Company (Tuesday)
• Tilray Brands (Tuesday)
• Cal-Maine Foods (Tuesday)
• Delta Air Lines (Wednesday)
• Constellation Brands (Wednesday)
• Walgreens Boots Alliance (Thursday)
• CarMax (Thursday)
• Aehr Test Systems (Thursday)
• Applied Digital (Friday)
• JPMorgan Chase (Friday)
• Wells Fargo (Friday)
• BlackRock (Friday)
• Morgan Stanley (Friday)
• The Bank of New York Mellon (Friday)
• Fastenal (Friday)

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

Christian Lopez