The Cracks Are There

Daily Updates:

• Bitcoin has consolidated at $94K, up significantly from a month low of $75K. The largest cryptocurrency has outperformed gold, tech stocks and the S&P 500 index in April. 
• We’ve highlighted in previous reports that since the beginning of the month, Bitcoin has abjured its near-linear relationship with the S&P 500. 

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“While the strong relationship might not be definitively broken, it has definitely bent. A previously linear relationship between US equities and BTC that had held in the post-election period broke down in April, leading to BTC rallying while the SPX crashed.”

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• Since President Trump’s jawdropping reciprocal tariff announcement on April 2, the S&P 500 is down 2%, the Nasdaq-100 has pared back most of its losses and down only 0.18%, however BTC stands out significantly: despite initially following risk-on assets down, it quickly took a separate path and has since rallied close to 12%. That rally has in part been supported by a weakening in the US dollar as a simultaneous selloff in both the greenback and US treasuries was a signal of diversification away from US denominated assets.

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• BTC has also been supported by an 8-day consecutive run of positive inflows into the Spot BTC ETF products. Yesterday those products netted $172.8M, driven by large inflows from BlackRock’s IBIT fund – which saw its second-largest inflows on record earlier this week too.

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• Despite US risk-on assets trading with a cautious sense of optimism, posting their largest six-day advance since early 2022, signs of weakness in the US economy are growing. 
• The JOLTS report showed 7.19M new job openings in March, a decline from the downwardly revised 7.48M job openings in February. That marks the lowest number of jobs since September 2024 and close to levels not seen since December 2020, when job openings came in at 6.7M. 
• The “low hiring, low firing” narrative Chair Powell has reiterated was also on display in the report: the hiring rate in March remained flat at 3.4% while the number of layoffs dropped. 
• The so-called quits rate – a proxy of worker confidence – did tick up slightly by 0.1%, offering some relief in the report. 

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• However, the JOLTS was not the only pessimistic data release of yesterday. US consumer confidence fell close to a five-year low in April, according to the Conference Board’s gauge of confidence. That index saw confidence drop 8 points to 86, the lowest recording since May 2020.
• Survey participants were also very worried about their job prospects – “Notably, the share of consumers expecting fewer jobs in the next six months (32.1%) was nearly as high as in April 2009, in the middle of the Great Recession.”
• Chair Jerome Powell said during the FOMC press conference in mid-March that the hard data still showed that the US economy was “solid” and, at the time that the University of Michigan inflation and consumer sentiment survey was “an outlier”. Since then, the same Michigan surveys have shown continued drops in sentiment and other consumer surveys are also mirroring that decline now.

• On the tariff front, President Trump has provided some relief for automakers after signing an executive order that exempts automakers from certain car and parts tariffs. Companies already paying the 25%  tariff for importing a vehicle will not be subject to other tariffs, such as the steel and aluminium tariffs on top – a policy being referred to as ‘de-stacking’ by the White House.
  
  
• New Mexico’s introduction of Senate Bill 57 represents a major move towards incorporating cryptocurrency into state financial planning, coming right after Arizona’s recent announcement on its own Bitcoin reserve.
• The bill, known as the “Strategic Bitcoin Reserve Act,” aims to establish a secure Bitcoin reserve fund managed by the State Investment Officer and overseen by the State Investment Council, proposing to allocate 5% of its public funds to BTC. 

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• El Salvador continues its Bitcoin accumulation strategy, despite conditions set by the International Monetary Fund (IMF) as a part of a $1.4B loan agreement.
• While the IMF stipulated that the fiscal sector should halt voluntary BTC accumulation and scale back involvement in related projects, the country has persisted in its purchasing strategy.

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• NASDAQ has filed a 19b-4 form with the U.S. SEC to list 21Shares Dogecoin ETF. The ETF would use Coinbase Custody Trust as its custodian.
• Meanwhile, the SEC delayed its decision on Bitwise’s proposed spot Dogecoin ETF until June 15, 2025, causing DOGE to dip slightly, currently trading at $0.18. 

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• The SEC has postponed decisions on proposed Franklin Templeton XRP and NYSE Arca Dogecoin ETFs, moving the deadlines to June 17 and June 15, 2025, respectively. The commission cited the need for additional time to thoroughly evaluate the rule changes and related concerns.

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• Libre (who specialise in bringing Real World Assets on chain) and the TON Foundation have unveiled a $500M Telegram Bond Fund ($TBF), tokenising Telegram's debt on the TON blockchain. $TBF offers on-chain access to a portion of Telegram’s $2.35B debt issuance for institutional and accredited investors.

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• BlackRock is seeking to tokenise its $150 billion Treasury Trust Fund, as disclosed in a recent SEC filing. The tokenised shares will utilise blockchain infrastructure provided by BNY Mellon to maintain share ownership records.
  

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