Like Liberation Day Never Happened

Daily Updates:

• If you took a brief hiatus from the financial markets at the start of April and returned today, you would find the S&P 500 trading just slightly higher than where you left off. A 90-day detente between the world’s two largest economies, the US and China, has ignited another leg up in the equities rally – with the SPX surging 3.26% yesterday, brushing past its “Liberation Day” lows as if they never occurred. 
• In that same period of time, BTC fell by 10% to $75K at a slight delay, before surging to $105K. 
• However, while SPX had its best sessions since April 9 and the Nasdaq-100 advanced over 4%, BTC and ETH pared back their gains on Monday. BTC briefly dropped back to $100K before rebounding to $102K, while the second-largest cryptocurrency is below $2500 (-3.2% over the past 24 hours), after a 40% rally up over the past week.  

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• Over the past 24 hours, short-tenor volatility for both BTC and ETH has come crashing down by 8 and 17 percentage points respectively. The sharp and swift move down in volatility implied by ETH options of a 7-day tenor contrasts past moves where the term structure has stayed inverted over fears of further sudden moves in spot price. 
• Short-tenor implied volatility for ETH has now fallen to match the levels implied by longer tenors, resulting in a compressed and flat term structure of volatility. 
• Volatility smiles for BTC at all tenors remain skewed towards OTM calls, however for ETH, the 14-day and 30-day tenor skew has dropped, now holding a slight bias towards OTM puts of -1.44% for the latter tenor. 

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• The bounce in risk appetite and moderation in the trade war now has markets pricing in only 55bps of rate cuts for the year (2 rate cuts, with the first in September 2025), down from the 4 rate cuts that were priced in one month ago. The two-year treasury yield, most sensitive to changes in monetary policy, rose 10bps yesterday, touching 4.0% and another sign of traders pulling back their expectations for rate cuts.   

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• On Monday, Arizona Governor Katie Hobbs vetoed two crypto-related bills that aim to expand the state’s involvement with digital assets, including the high-profile Arizona Strategic Bitcoin Reserve Act.”
• Senate Bill 1025 would have allowed up to 10% of the state’s treasury and retirement funds to be allocated to BTC, rejected the bill, citing cryptocurrency market volatility, stating that such assets “do not make a prudent fit for general fund dollars.”
  
  
• Cboe BZX Exchange has filed a proposal with the SEC to list and trade the Canary Staked TRX ETF, which would give investors exposure to TRON (TRX) – a blockchain platform – along with potential staking rewards.
• The ETF would be structured as a Delware statutory trust – referring to the U.S. state of Delaware and is not classified as a mutual fund or commodity pool.
• While its registration statement (Form S-1) has been filed with the SEC, it has not yet been approved.
  
  
• Nasdaq-listed GD Culture Group (GDC) has entered into a stock purchase agreement to raise up to $300M through a share sale to a British Virgin Islands-based investor.
• The company states it will use a "significant portion" of the proceeds to acquire BTC and the Official Trump memecoin, as part of its broader strategy to integrate crypto assets into its treasury operations.

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• DeFi Development Corporation continues its Solana accumulation strategy with a $23.6M purchase of 172,670 tokens, now bringing their total holdings to 595,988 SOL valued at approximately $50.42 each. 

This Week’s Calendar:

Charts of the Day:

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