Nine Session Break

Daily Updates:

• The US stock market’s two-week surge, which saw the S&P 500 Index recover its April 2 losses and rally for nine consecutive trading sessions, came to an end yesterday.
• The longest winning streak in the index since 2004 was broken by a 0.64% drop, with the Nasdaq-100 ending the day 0.67% lower too.  

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• BTC had also been rallying alongside US risk-on equities, consolidating above $90K since the start of May. That rally saw spot price surge from an April 7 low of $76K, with prices now holding between a floor of $93K and a ceiling of $97K. 
• Most interesting is the decline in volatility levels despite the April tariff uncertainty continuing into this month. The administration has not yet confirmed a trade deal between the US and any of its partners, however volatility expectations, particularly at the front-end, continue to drop towards their 18-month lows. 
• Realised volatility over the past seven days is at 30%, also a respective 18-month floor. 
• The premium that traders had assigned to out-the-money BTC calls at the start of the month has now faltered closer to neutral for short-tenors. This is a move that has been even stronger for ETH, where skew is now tilted towards puts for tenors shorter than 30 days, after a late April surge towards OTM calls.

• April was characterised by a simultaneous selloff in stocks, bonds, and the US dollar. However, the treasury market reaction is the one that surprised most observers. US treasuries, long seen as the haven asset in times of shock, sold off along with risk-on assets and the 10-year treasury yield surged to 4.5%. 
• Together with a selloff in the US dollar, those moves were taken as signs of a capital flight away from the US. 
• Longer-term yields have since abated in their surge and Treasury Secretary Scott Bessent said yesterday that the US is still the “premier destination” for global capital despite April’s “sell America” narrative.

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• After last Friday’s US nonfarm payrolls (NFP) showed the US economy adding a robust 177,000 jobs in April (above expectations of 130,000) and an acceleration in the services sector, US treasuries sold off with yields across the curve moving up – traders are now pricing in three rate cuts over the rest of the year against the four cuts expected prior to the NFP release. Markets expect those rate cuts to come in the second half of the year however, with a 96.8% probability for a pause in tomorrow’s FOMC meeting. 
• The NFP report also showed the unemployment rate has held steady at 4.2%, the same level that caused an initial scare last August before the Fed’s first rate cut of the cycle in September.
• Governor Christopher Waller recently argued that the Fed would likely step in if faced with a “serious deterioration of the labour market”. 
• Florida’s strategic Bitcoin reserve bill, which proposed allowing public funds to be invested and managed in Bitcoin, has been “indefinitely postponed and withdrawn from consideration” as of May 3, 2025. 

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• Strategy has expanded its Bitcoin holdings with the purchase of an additional 1,895 BTC between April 28 and May 4, 2025, at an average price of $95,167 per coin. 
• The $180.3 million purchase brings the firm’s total Bitcoin stash to 555,450 BTC, worth over $38 billion, acquired at an average cost of $68,550.

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• The SEC has released the agenda and panellists for its upcoming May 12 round table on tokenisation, titled “Tokenization — Moving Assets Onchain: Where TradFi and DeFi Meet.”, highlighting its focus on the intersection of traditional finance and blockchain

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• Tether has minted another $1 billion USDT on the Tron network, bringing its total to $71.4 billion. This leaves the Tron network $1.4B shy of surpassing Ethereum’s $72.8B USDT supply and potentially reclaiming its position as the network holding the largest  stablecoin supply.

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• VanEck has filed a registration statement with the U.S. Securities and Exchange Commission (SEC) for a new exchange-traded fund (ETF) called the VanEck BNB ETF, marking the first U.S.-based ETF tracking the price of BNB, the native token of Binance’s BNB Chain. 
• The fund intends to list its shares on a national securities exchange under a yet-to-be-determined ticker symbol. According to the preliminary prospectus filed on May 2, 2025, the ETF will value its shares daily based on an index calculated from prices on leading BNB trading platforms.

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This Week’s Calendar:

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Charts of the Day: