Market News

Last week was one of consolidation as the market recovered from the biggest liquidation event in crypto history while digesting tariff and foreign policy news out of the U.S. Bitcoin drifted to the lower end of the 90-110k range, where it's been floating for some time, SOL hovered between $190 and $210, and XRP settled in the $2.25-$2.50 area. Foreign exchange markets and interest rates remained where they’ve recently settled after a period of USD strength and higher yields that occurred after the November election.  

In crypto news, 27 states introduced Bitcoin reserve bills and the Japanese stock Metaplanet climbed 3,600% after announcing Bitcoin investment strategy. Last week, Microstrategy (now “Strategy”) acquired 7,633 BTC for about $742.4 million at an average price of $97,255 per coin, so says this press release.  Also, Michael Saylor wrote posts about JetKing, the first Indian public company to introduce a Bitcoin treasury strategy.  

Robust jobs data out of the U.S. last week had a marginal positive impact on the USD, sending U.S. yields 5 basis points higher across the curve, but the single data point won’t have a great effect in the market in consideration of the macroeconomic policies announced by the Trump administration.  

While we started the year fearing an inflationary impulse fueled by trade wars and fiscal spending, the narrative around this has shown signs of tempering as President Trump and Treasury Secretary Scott Bessent show a willingness to compromise. Firstly, the inflationary impulse expected to come from tariffs has not yet been confirmed. Instead, we have seen President Trump using tariffs as a bargaining chip to achieve his foreign policy goals and implementation being delayed in the case of the first round of tariffs announced on Canada and Mexico. That being said, Trump’s next round of tariffs — 25% on steel and aluminum — won’t be so easily averted. 

When it comes to fiscal policy, Scott Bessent has been on the wires shifting the narrative towards fiscal prudence and a lower deficit. While Trump has been quite vocal around his desire for lower interest rates, Bessent has clarified that the US Treasury will be focused on bringing longer term interest rates lower (i.e., 10-year U.S. Treasury yields) by lowering inflation expectations and stimulating non-inflationary growth.  

Bessent has outlined his plan to achieve this through fiscal policy and deregulation, namely with a 3-3-3 economic plan that would seek to reduce budget deficits while boosting growth and energy production. The plan involves cutting the budget deficit to 3% of gross domestic product (GDP) by 2028, boosting GDP growth to 3% through deregulation and other policies, and increasing U.S. energy production to the equivalent of an additional 3 million barrels of oil per day.  

Overall, the administration has been vocal about its goals to increase oil and lower inflation expectations, which they hope will push yields and the USD lower while maintaining a strong U.S. economy. If successful, the result would be a bullish environment for risk assets, including equities and crypto markets, where there's room to grow after last week’s liquidations. 

Source: Investing.com

Scott Bessent Can Walk the Trade Tightrope - WSJ 

Bitcoin poised for breakout as bond market conditions favor digital assets, says Standard Chartered | The Block 

Crypto Industry Looks to New SEC Task Force for Quick Action in Its Favor - WSJ 

Crypto prices slide as Trump announces new 25% tariffs on steel, aluminum | The Block 

SEC Ousts Top Litigator Who Battled With Crypto Giants - WSJ 

Wall Street eyes significant upside for Strategy's stock as reserves near 500,000 BTC | The Block 

BlackRock now owns 5% of Strategy as the latter's bitcoin exposure grows | The Block 

Data wise, the focus this week will be on U.S. inflation on Wednesday and U.S. Retail Sales on Friday. 

Source: Investing.com

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