Executive Summary
- Market trading color: Crypto whipsaws on tariffs, rebounds on policy clarity; BTC dominance rises, ETH surges, alts struggle
- Theme of the week – Washington pushes crypto regulation, stablecoins, and a potential Bitcoin reserve to secure U.S. dominance
- Links of the week: BTC cycle holds, ETH outflows, SOL rebound, DeFi resilience, U.S. Bitcoin Reserve
Market Trading Color
The digital asset market is still feeling the lingering effects of this past weekend’s trade war scare. News broke late Friday of tariffs being placed on Mexico, Canada, and China. Given the crypto market was the only one open on Saturday to feel the effects of this news, it was hit hard. Low weekend liquidity and mass liquidations sent BTC and ETH spiraling towards $99,000 and $3,000 respectively. However, the futures market opening late Sunday provided a double whammy and crypto assets were hit hard once again. This time BTC and ETH sank toward $91,000 and $2,100. While liquidations were reported by Coinglass to be around $2B, many suspect that these figures were north of $10B. $2B alone would be the record for 24-hour liquidations (larger than FTX or LUNA). ETH was particularly hit hard, seeing its largest one-day slide since May 19th of 2021. ETHs ATM implied vol spiked above 180% on Sunday as price collapsed. Retail darling XRP gave back all of its Trump pump, sinking to a low of $1.70 before recovering to where it’s trading now near $2.38. These last two points lead to a highlight of Bitcoin and its dominance during this volatility and throughout this cycle. BTC dominance spiked to as high as 64%.
Tuesday’s reversal of these tariffs for the time being were all majors needed to flip direction and print daily green candles. While BTC ran out of the gates with speed, crossing $102,000, it was ETH that finished the race in the lead, outpacing BTC by nearly double with a 10% 24-hour rise. ETH maxis could thank Eric Trump for the bump after he tweeted, “In my opinion, it’s a great time to add $ETH.” This came after World Liberty Finance moved $212M of ETH into Coinbase custody. This positive momentum was short lived as the market sold off heavily during Wednesday’s press conference held by new Crypto Czar, David Sacks.
If you only tracked price, you might think the lofty expectations heading into the press conference were not met. However, we believe this was a very positive event and a step in the right direction. A White House Czar stood alongside multiple government Chairs and proclaimed that crypto clarity and turning America into a crypto powerhouse are key themes for this administration. “We look forward to creating a Golden Age for Bitcoin and digital assets in the U.S.” The two main points discussed were stablecoin regulation and clearer rules for crypto entrepreneurs. Crypto is here to stay.
Separate from the press conference, but adding to the bullish momentum, Hester Peirce released a statement regarding the SEC’s approach to the industry. Titled “The Journey Begins,” the statement outlined key topics, including coin and token offerings, security classifications, registered offerings, special-purpose broker-dealers, crypto lending/staking, and custody for investment advisers.
It’s a choppy market right now. There’s no strong buyer present. Offshore exchanges such as Binance have seen heavy sellers of late. Many are waiting to see how Trump reacts to China’s tariff retaliation. In the meantime, alts continue to bleed. Memes were taken to the woodshed. Sentiment on crypto twitter is near lows right now. Resistance above for BTC and ETH is growing around $100,000 and $3,000. All this while we are about to live through the Golden Age for crypto in America. The tokens that have outperformed of late are the ones providing utility and producing revenue. These tokens include HYPE, JUP, RAY, and LDO.
Key Takeaways:
- Navigating stablecoin legislation - David Sacks collaborates with lawmakers to pass stablecoin legislation, focusing on regulation and new strategies, including the 'bitcoin reserve' feasibility and the SEC's engagement.
- Enhancing onshore innovation - The administration is prioritizing stablecoins to foster innovation within the US. The GENIUS Act and new legislation aim to boost demand for the US dollar and introduce additional market features.
David Sacks, recently appointed as the White House’s key advisor on AI and crypto, has teamed up with lawmakers to shape regulations for digital assets—particularly stablecoins. He joined Senate and House leaders in a press conference Tuesday, where they announced their intention to push forward comprehensive legislation within six months, aiming to promote innovation in digital assets remains in the United States.
A focal point is the new stablecoin bill from Senator Bill Hagerty, which aims to cement stablecoins’ role in strengthening U.S. dollar dominance. Supporters argue that U.S.-regulated stablecoins could trigger massive global demand for the dollar and help reduce long-term interest rates.
During his remarks, Sacks emphasized that one of his task force’s initial priorities is examining the feasibility of a national “bitcoin reserve,” an idea proposed by President Trump during his campaign.
The SEC under renewed leadership, simultaneously announced a more open-door policy toward crypto, creating a dedicated Crypto Task Force. SEC Commissioner Hester Peirce said this group’s goal is to clarify which tokens qualify as securities, establish a clear approval path for token issuers, and ensure protective measures without stifling innovation.
Legislative leaders from the House Financial Services Committee, Senate Banking Committee, House Agriculture Committee, and Senate Agriculture Committee also unveiled a bipartisan and bicameral working group. Their aim is to unify oversight between the SEC and the CFTC, providing a single, transparent framework for the crypto industry.
The joint press conference also discussed the GENIUS Act, legislation intended to regulate stablecoin issuance procedures and assign regulatory jurisdiction by issuer size. Lawmakers view stablecoins as vital to maintaining the global influence of the U.S. financial system, a stance our team has taken for years.
While crypto markets reacted negatively, reflecting a desire for more immediate announcements like a possible government Bitcoin holding, policymakers stressed that establishing a legal foundation is crucial before the U.S. government can hold or transact in digital assets on a large scale.
Links of the Week
- StoneX Digital Top 10 Links of the Week
- Bitcoin ($BTC): Bitcoin Still Following Previous Cycle's Trajectory Despite Price Drop: Van Straten link)
- Ethereum ($ETH): Ether Worth Nearly $1B Left Exchanges Monday as Trade War Fears Sent Prices Crashing (link)
- Solana ($SOL): Time for a Solana price rebound? SOL futures are mixed, but onchain looks bullish (link)
- MicroStrategy halted Bitcoin purchases, says it will hodl $30B BTC (link)
- Founders say liquidations from tariff-led market selloff shows DeFi is working: 'Better than TradFi in times of crisis' (link)
- Helium Mobile introduces free plan, hikes price for unlimited data (link)
- Failure or 5D chess? El Salvador IMF deal walks back Bitcoin adoption (link)
- U.S. Bitcoin Reserve May Be Coming, But States Are Winning the Race (link)
- SEC Commissioner Hester Peirce Lays Out 10 Priorities for New Crypto Task Force (link)
- Trump's Crypto Czar Sacks Says 'Golden Age' Coming (link)
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