🔥 This is fine

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Today’s the day. 

Tariffs are front and center, especially now that China’s retaliated with an 84% tariff. Bitwise’s Hunter Horsley noted that this is giving March 2020 vibes, and I have to agree.

Tie that into the fact that we’re seeing corporations pull their guidance (something we typically only see when the outlook gets murky and they’re not sure what could happen) and I’d prepare for some rough waters ahead. 

The fact that both Tether Gold and PAX Gold are in CoinGecko’s top 10 100 coins is a good vibe check at the moment. 

Meanwhile:

• Bitcoin’s dropped to $76,000, a 4.5% decrease in the past 24 hours.

• Total liquidations are at $443 million in the last day, per CoinGlass data.

• DEX volumes are down to $7.8 billion, a 34% decrease in the past 24 hours, according to Blockworks Research.

✅ Checking in

Good news: The crypto market’s been holding up better than Kraken global economist Thomas Perfumo thought it would. 

He thinks the timing of the tariffs — while a total coincidence — is interesting for the crypto market because it comes just as crypto nears the 12-month mark post-Bitcoin halving. In the past, this is when the cycle would have peaked. 

Obviously, we’re in uncharted waters here, and I’m not even talking about the macro environment. There’s plenty of evidence to suggest crypto’s either in the process of breaking out of its cyclical behavior, or has already broken it. 

But the impact we’re seeing is that folks — for the most part — are staying put instead of swapping out of bitcoin to chase the next big narrative.

“Everyone's just kind of frozen and saying, ‘all right, I need a little bit more certainty around the medium term to even debate putting more money on the table anywhere,” Perfumo explained. 

“When it comes to bitcoin, it has two favorable advantages: one is this kind of historical presence as the store of value that people hunker back into so it's a defensible crypto asset. And then the second part is that it also has a deeper connection to capital flows from the traditional investment community through the ETFs.”

Now here’s the big thing: Because of this new mindset for bitcoin, any further pullbacks could have negative impacts on altcoins. 

Perfumo cautioned that further pullbacks could be on the horizon if bitcoin sells off more. With their higher beta, altcoins could then potentially see more aggressive selling.

For altcoins to really stage their comeback tour, he added, there’ll have to be some sort of catalyst that drives demand forward. Right now, that’s lacking, which is leading to folks taking risk off the table. 

The overall tone of our conversation was positive, with Perfumo noting that he was cautiously optimistic about the flows both in and out of the bitcoin ETFs. And while we may see crypto IPOs like Circle hit pause in the near term, he’s not expecting fallout from that. 

Outside of the public markets, I’ve heard takes from some venture capitalists. Basically, it’s a bit soon to gauge the impact that both the tariffs and macro environment may have on crypto investing. But the impact may only hit certain rounds — such as late stage versus early stage. 

Right now, crypto — as an industry —  seems to be protected despite its risky nature. But don’t count your blessings yet, because things could quickly change.

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• DeFi’s defi-ying (see what I did there?) the odds right now, as it manages to hold up despite macroeconomic pressure. 

• Another one: BlackRock tapped Anchorage as a custodian for its crypto ETFs.

• M^0’s making some moves and expanding to Solana, per Blockworks’ Jack Kubinec.

🤨 Cautiously optimistic

When looking at data throughout the market, it’s fairly easy to find some bright spots right now. 

For example, BTC volatility offers a “sharp contrast” to equities, according to K33. 

“Following its massive sell-off, the S&P 500 recorded its largest one-week volatility since April 2020, whereas BTC’s 7-day volatility of 3.1% sits moderately above its 1-year average 7-day volatility level of 2.5%,” analysts wrote. 

“This orderly and relatively regular 7-day volatility of BTC amidst the broad market chaos is an unusual sight to behold, as steep movements in equities tend to be mirrored by even sharper BTC moves.”

This supports another piece of data you all know I’m fond of: CME trader sentiment. As of last week, traders were holding on to their defensive positions, but seemed relatively unfazed by what was happening in equity markets. 

“CME yields are starting to show a mild uptrend over recent weeks, indicative of slightly improved market sentiment. However, current premiums remain soft at 6.3%, reflecting cautious positioning while open interest remains flat at 11-month lows. VolatilityShares outflows largely offset inflows from active market participants, as the futures-based ETF now holds 43,930 BTC – its lowest level since July 2024,” the analysts wrote. 

The real test will be looking at this same data in a week to ensure it’s holding up, given that volatility has taken us on some wild rides so far this week. My read right now is that cautious positioning without panic is a good sign. Though, after this week (and, yes, it’s only Wednesday), I’m not sure that’ll still be the case.

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On my mind: Narratives

Katherine:

I’m curious to see what will emerge as the next big crypto narrative in light of all that’s happening. 

CT seems, at least to me right now, distracted by what’s occurring in the macro lens. We’re all trying to figure out what all this could mean for the industry. 

It feels like the current economic turbulence could boost the RWA and stablecoin narrative that started to emerge just before Liberation Day. As far as I’m aware, the bullishness from institutions remains, and this will continue to be an area they look into even as they try to manage the macro situation. 

But I think we’re going to continue to see risk appetites adjusted as headlines pour in. And that could have negative consequences for crypto. Wouldn’t be surprised if we started to hear folks in the industry reiterate their long-term bullishness — but urge short- to medium-term caution. 

I’m curious to get your thoughts on narratives and how they evolve as crypto grows and matures.