April 7th Bitfinex alpha | Macros have arrived, but remain positive in the second quarter

After a relatively resilient performance last week, BTC is almost flat, dropping just 0.65% (better than traditional risk assets) by just 0.65%.

The market is currently selling, despite the BTC/S&P 500 ratio surges to a record high of 5%. We believe that stocks are in a very overloaded state, and that short-term relief gatherings could potentially squeeze this spread in the mid-term. However, the trends in short-term funding and open interest also suggest that BTC invasion collapses. Structurally, though, the foundation appears to be formed later in the second quarter for outperformance. As macro volatility cools, ETF influx resumes and the sovereign story reappears, Bitcoin is further detached from stocks and can regain leadership across global risk assets.

The US economy provided short-term optimism with stronger work and construction figures than expected in early 2025. However, the newly implemented tariffs weigh heavily on manufacturing, pricing and labor markets, bringing deeper structural challenges to emerge. Job growth in March, led by the private services sector, has shown signs of tension in the sector that maintains potential instability and manufacture and commodity-generating sectors.

At the same time, tariffs now average over 22% have increased input costs across the industry, fostering inflationary pressures and fostering retaliation from key trading partners. With mortgage rates eased construction spending increased in February, but costs inflation from materials such as steel, aluminum and wood have already tightened the affordable prices. Manufacturing activities are back to contraction, showing a tendency to soften labour market indicators, particularly job openings. The Federal Reserve continues to be cautious amidst uncertain inflation dynamics, but the big picture suggests that trade policy rather than monetary policy could be a greater risk to economic momentum for the coming quarter.

From a newsflow perspective, the industry continues to evolve proactively. Japan is leading regulatory modernization by classifying cryptocurrencies as financial instruments and suggesting that cryptocurrencies be reduced to 20%. Meanwhile, Grayscale has applied for Spot Solana ETFs, showing increased confidence in alternative layer 1 assets, potentially paving the way for wider ETF adoption beyond Bitcoin and Ethereum. Complementing these developments, BlackRock’s on-chain Buidl funds continue to dominate the tokenized financial market, paying $4.17 million in March dividends and gaining nearly 40% market share. These parallel marches highlight the convergence of traditional financial acceleration and blockchain technology, pointing to an increasingly accessible, compliant and investor-friendly mature market infrastructure.

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March 31st Bitfinex alpha | Waiting for macros

Bitcoin’s first quarter in 2025 has proven to be the weakest in nearly a decade, falling nearly 11% despite a strong start in January, when prices rose to an all-time high of $109,590. Optimism about President Donald Trump’s reelection and expectations for procrypted policies quickly gave way to the textbook “Certe News” deal as concrete regulatory changes had not been realized. As it was a record high, Bitcoin has fallen far, at $77,041, a drop of nearly 29%, and it vibrates primarily in the trading range of $78,000-88,000.

However, the market width continues to support Bitcoin, and BTC’s control has risen to over 61% despite a sharp decline in Crypto’s market capitalization. Ethereum, Solana and other Altcoins have reduced by more than 35-50% from their cycle peaks, strengthening Bitcoin’s status as a reserve asset in the digital market.

Once Q2 begins, price actions will remain responsive to macroeconomic signals, with Fed policies and ETF flows expected to determine direction. For now, signs of yield have eased, but the fluidity is still severe, so breakouts may require important catalysts.

As for the macro picture, some of the US economy shows signs of resilience, such as narrowing trade deficits and increasing durable goods spending, but these bright spots are hidden by deeper structural concerns. Inflation is partially driven by rising import costs associated with new tariffs, and in some cases accelerate faster than expected. Core inflation rose 0.4% in February, marking the sharpest monthly increase in over a year, but consumer expectations suggest that inflation can continue to rise in the future.

At the same time, growth is slowing down. Once government transfers were excluded, the actual revenue profits remained lukewarm, and service expenditures, the main economic factor, began contracts. Consumer trust is eroded, with conference committee indexes falling for two years, with many Americans expecting a rise in unemployment rates. These trends indicate a growing attention among households, reflected in the rise in individual savings rates.

Trade policy remains a central point of pressure. Recent tariff hikes and expectations for further measures in April and May have encouraged businesses and consumers to coordinate their actions, buying front-loads of purchases, delaying investments, or increasing adoption. The trade deficit narrowed in February, following a surge in imports in January, which is likely to have skewed GDP forecasts. As a result, growth in the first quarter is expected to slow sharply.

Despite these ongoing economic uncertainties, the broader cryptocurrency industry still benefits from an increased commitment to regulatory clarity based on increasing political support and institutional interest.

The Securities and Exchange Commission (SEC) has formally removed the lawsuit against three major players in the industry, Kraken, Consensys and Cumberland DRW. This move shows a major shift from the agency’s previous, more enforced stance to a more collaborative regulatory approach. It also foresees commitment to establish clear and constructive rules for the industry.

To further strengthen this direction, the SEC’s Cryptographic Task Force has announced that four round tables will be held between April and June 2025. These sessions involve stakeholders on important issues such as crypto trading regulations, custody of digital assets, symbolism, and the future of distributed finances. The event is open to the public and reflects the SEC’s intention to promote open dialogue and transparency in shaping Crypto policies.

In parallel, Trump Media & Technology Group (TMTG) announced a highly-profile partnership with Crypto.com, launching a series of Crypto-centric ETFs. The venture aims to capitalize on growing demand for digital asset investment vehicles as TMTG is showing its expansion into financial products. The initiative remains awaiting regulatory approval, but it could significantly improve the visibility of both TMTG and crypto.com within traditional financial circles.

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