10-Point Stimulus

Daily Updates:

• Risk-off sentiment has prevailed for a second day in Wall Street as the S&P 500 and Nasdaq-100 each dropped close to 1% yesterday, ahead of today’s FOMC’s meeting where policymakers are expected to hold interest rates at 4.25%-4.50%. 
• President Trump’s White House comments were not enough to change the growing pessimistic outlook regarding his tariff policy – the US is “going to put very fair numbers down, and we’re going to say, here’s what this country, what we want. And congratulations, we have a deal. And they’ll either say ‘great,’ and they’ll start shopping, or they’ll say, ‘not good”. 
• He added that “we don’t have to sign deals. We could sign 25 deals right now if we wanted”. 
• Those comments consolidate statements Trump made to NBC last Sunday that the US “is losing nothing” by having a trade embargo with China, and that American consumers would be happy to pay slightly higher prices for goods that they have previously relied on China for, such as clothing and toys – “young girls don’t need “to have thirty dolls … I think they can have three dolls or four dolls, because what we were doing with China was just unbelievable”. 
• BTC was first to react to some positive developments announced late last evening on the US’s bilateral trade relationship with China. Both parties announced that Treasury Secretary Scott Bessent would be meeting with Chinese Vice Premier He Lifeng to discuss trade policy. The news came after the US equities market had closed, however, SPX and NDX futures rallied on the news alongside BTC.
• Speaking to Fox News, Bessent said “we don’t want to decouple, what we want is fair trade” and similarly, China’s Ministry of Commerce warned China will “never agree” to concessions with the US if it even attempts “to continue to coerce and blackmail under the guise of talks”. 

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• BTC’s spot price rallied from $94K to $97K after the meeting was confirmed – a range in which we have highlighted BTC has been trading between for most of May. 
• ETH rallied by less and has been consolidating within its own band of $1.8-1.9K. 
• Implied volatility across the term structure has bounced up, with volatility expectations for shorter-tenors now at 40%, back to levels we saw at the start of the month. 
• Complementing the higher vol expectations is a rebound in the put-call skew ratio, particularly at the front-end, which has shot up towards calls (at 2%) once again – after a brief bias towards OTM puts yesterday. 
• ETH skew saw a similar rebound from OTM puts now closer to neutral levels for tenors shorter than 30 days. 

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• Only a few hours after the two sides agreed to hold trade talks, China’s State Council held a press conference where the People’s Bank of China (PBOC) governor Pan Gongsheng outlined a 10-point stimulus plan to support financial and economic stability. 
• The PBOC cut the seven-day reverse repurchase rate from 1.5% to 1.4% and the reserve requirement ratio (RRR) for banks – the amount of cash that banks must hold as reserves – by 50 bps to an average level of 6.2%. 
• The last time the PBOC had cut both of these rates together came during the September stimulus blitz. According to Pan, the RRR cut will release about 1T yuan ($139B) in long-term liquidity for banks.
• Other measures in the 10-point policy include: A 0.25 percentage point cut in five-year personal housing provident fund loan rates, reducing first-home rates from 2.85% to 2.6% and the establishment of a new RMB 500B (US$69.0B) refinancing tool to promote loans in consumer services and elderly care.

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• Ethereum's major upgrade, Pectra has been successfully activated on the mainnet with testing and validating of all the features to continue throughout the day.

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• Bitwise has filed a registration statement with the SEC to launch Bitwise NEAR ETF, a spot exchange-traded fund that would provide investors with direct exposure to NEAR, the native token of the NEAR Protocol.
• The ETF aims to track the value of NEAR held by the trust, minus operational expenses and liabilities. The NAV will be determined using the CF NEAR-Dollar Settlement Price, calculated by CF Benchmarks Ltd., which aggregates trade data from major NEAR trading platforms.

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• Tokyo-based Metaplanet has purchased an additional 555 BTC for $53.4M, at an average price of about $96,134 per bitcoin, bringing the total holdings to 5,555 BTC – worth nearly $482M, at an average price of $86,672 per bitcoin.
• The firm is planning to reach 10,000 BTC by year-end. To fuel this growth, Metaplanet issued a new $25M bond – its 13th round – just one week after raising the same amount.
  
  
• New Hampshire has become the first U.S. state to enact a Strategic Bitcoin Reserve law, allowing up to 5% of public funds to be invested in digital assets with a market capitalization exceeding $500B. The law, HB 302, was signed by Governor Kelly Ayotte, and is set to take effect in 60 days.
  
  
• DogeOS has secured $6.9M in a funding round led by Polychain Capital to build a consumer all-layer on the Dogecoin blockchain.

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This Week’s Calendar:

Charts of the Day:

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