“Give us a pass”

Daily Updates:

• President Trump was elected into office on the back of a campaign that promised to “build the greatest economy in history” and “defeat inflation”. However just over 100 days into his second term, a slew of data releases yesterday showed anything but the fulfilment of those promises.

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• The BEA’s GDP report contained two huge blows to the economy. First, the US economy contracted by 0.3% in Q1 2025 – the first contraction since Q2 2022 and far below economists' expectations for growth of 0.3%.
• The decrease in real GDP was primarily a result of a surge in imports. Net exports subtracted 4.8 percentage points from the final GDP figure.

• Secondly, the report also contained the personal consumption expenditures (PCE) price index for Q1 (i.e., the PCE inflation for Q1). That came in at 3.6%, compared with an increase of 2.4% last quarter. The core PCE price index rose to 3.5% QoQ, compared to 2.6% in Q4 2024.

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• As mentioned, this report wasn’t the only one signalling a challenge for the Fed’s dual mandate either. PCE inflation for March showed headline inflation fell to 2.3% (slightly above expectations) and core PCE fell to 2.6%. However, both headline and core PCE for February were revised up.

• The labour market is also showing signs of slowing down too – we covered the JOLTS report earlier in the week which showed the weakest number of job openings since September. Yesterday’s ADP private payrolls showed the US economy added only 62,000 jobs in April, the lowest since July 2024 and far below the forecasted 125,000. 

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• President Trump’s first reaction to the data? “I have to start off by saying, that’s Biden. That’s not Trump” during a cabinet meeting yesterday. He added “let’s give us a pass on the first month” and on Truth Social he wrote “This will take a while, has NOTHING TO DO WITH TARIFFS … BE PATIENT!!!”

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• Markets might have given him that – despite dropping more than 2% following the GDP data release, the S&P 500 pared its losses to close 0.15% higher. 
• BTC posted a similar reversal too – over the past week its spot price has cycled between a floor of $93K and a ceiling of $95K. It dropped exactly to that lower bound and has now rebounded to trade back at the top of the range. 
• BTC’s implied volatility has continued to tail off and is approaching its own floor of 35% for short-tenors. This is a level that we have seen implied volatility touch and then rebound from consistently over the past 18 months. Volatility smile skews at longer tenors stills remain bullish, tilted towards OTM calls. 
• Implied volatility levels for ETH have trended lower alongside BTC too, with ETH maintaining a higher and flatter term structure, compared to BTC’s low and steeper shape. 
• Funding rates for both assets remain close to neutral levels too. 

• Nigeria has taken a landmark step in crypto regulation with the passage of the Investment and Securities Act (ISA) 2025, which officially recognises Bitcoin and other digital assets as securities.
• Signed into law by President Tinubu, the legislation marks the first time the country has enacted legal recognition for digital assets. 

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• North Carolina has officially entered the state-level Bitcoin reserve race with the passage of Bill HB92 through its House of Representatives. This marks a notable milestone, making it the 3rd U.S. state this week to advance BTC-related reserve legislation, following recent moves by Arizona and New Mexico.

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• Canary Capital has filed with the SEC to launch the first Staked SEI ETF. The ETF is designed to track the spot market price of SEI, as determined by CoinDesk Indices. This product will not use derivatives, instead, holding actual SEI tokens, custodied by  BitGo Trust Company and Coinbase Custody Trust Company.

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• Ripple has reportedly made an acquisition offer valued between $4B and $5B to acquire Circle Internet Financial, the issuer behind the USDC stablecoin. However, the offer was rejected by Circle, which considered the valuation too low given its trajectory and recent IPO filing.

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• Sony’s blockchain Soneium, which launched in January, has partnered with Plume to provide users direct access to tokenised asset-backed yield products, including tokenised U.S. Treasuries and private credit.

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• Truth Social, owned by Trump Media & Technology Group, is exploring the launch of a utility token as part of its rewards program. The token would initially cover Truth+ subscription costs and later expand to other Truth Social related services.

This Week’s Calendar:

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Charts of the Day:

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