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This Week’s Top Stories

“New Hampshire Becomes the First U.S. State to Pass Strategic Bitcoin Reserve Bill into Law” – Tuesday, 6 May 2025

• On Tuesday, New Hampshire Governor Kelly Ayotte signed HB 302 into law, establishing the first ever policy framework for creating a Bitcoin and digital assets reserve fund for a U.S. state.
• The law authorized the New Hampshire Treasurer to purchase Bitcoin and other digital assets with a market cap above $500 billion, a threshold currently met only by Bitcoin. The bill caps the holdings at a maximum of 5 percent of the state's total funds and will take into effect 60 days after passage.

“No Fed Put until/unless Labor Market starts to Deteriorate?” – Wednesday, 7 May 2025

• On Wednesday evening, the Federal Reserve announced its interest rate decision, keeping the federal funds rate unchanged at the 4.25–4.50% target range.
• In the FOMC statement and the following press conference, the Federal Reserve noted that the risks of higher unemployment and higher inflation have risen, and Fed Chair Powell dismissed any notion of taking preemptive rate cuts for the time being. Powell also said that he still sees the economy in a solid position, while uncertainty about their outlook has increased further.
• Powell also commented on the current tariff situation, stating that the tariffs are significantly bigger than expected and that U.S. negotiations with key trade partners could have a material impact on the economic outlook.
• The Fed’s focus on the unemployment rate in their FOMC statement suggests that a “Fed put,” meaning that the Fed would step in to lower rates and prevent a sharp market decline, will not come until or unless the labor market starts to deteriorate.
• In other words, should tariffs cause significant layoffs, the Fed could be looking at an interest rate cut sooner rather than later.

“Tariff Negotiations Tactics à la Art of the Deal?” – This Week

• On Wednesday, Treasury Secretary Scott Bessent announced that he will be meeting with Chinese officials in Switzerland to begin trade talks with China on Saturday and Sunday.
• Just a little later, Trump mentioned that the U.S. is not open to pulling back on the 145 percent tariffs on China and that China should reassess who asked for the meeting, after Chinese officials said that the U.S. requested it.
• President Trump then announced a press conference on Thursday regarding a major trade deal with a big and highly respected country, mentioning that this is the first deal of many. The U.S. ended up announcing a trade deal with the UK. Taking a closer look, the deal is more like a framework and given that the UK represents only 3 percent and is the 11th largest trade partner of the U.S., this deal should be put into perspective.
• Nonetheless, the market perceived the news well, and Trump’s comment “better go out and buy stocks now” certainly helped in this regard as well. Yesterday, Trump’s administration said that China tariffs could in fact be slashed to 50 to 54 percent next week.
• Trump and his team seem to continue to follow the strategy of maximum distraction and confusion with different comments at different times. But now all eyes should be on the weekend: What will the meeting between the U.S. and China bring?

“GENIUS Act Fails to Pass Key Senate Vote” – Thursday, 8 May 2025

• On Thursday, the U.S. Senate failed to pass a key procedural vote on the much-anticipated GENIUS Act. This failure came as a surprise, as several previously supportive Democrats ended up voting against the bill. While the bill is not completely off the table, the chances of it passing into law have decreased significantly. The GENIUS Act would establish a legal framework for stablecoins in the U.S., and Treasury Secretary Bessent stated that the Senate missed an important opportunity with its decision, mentioning that without the bill, stablecoins will be subject to state regulations instead of a streamlined framework more conducive to growth and competitiveness.

A Quick Crypto Overview: $100k Long Time No See!

Yesterday evening around 5 p.m., Bitcoin crossed the magic $100’000 level once more after spending three months below the six-figure level. The move above $100’000 was accompanied by over $835 million in short liquidations across all crypto assets, with BTC and ETH short liquidations contributing more than half of the total amount.

The total crypto market capitalization is up more than 10 percent this week alone, adding over $300 billion in market cap since Monday.

The top performers of the week among the top 100 cryptocurrencies are PENGU (+48 percent), PEPE (+32 percent), and VIRTUAL (+30 percent).

The crypto market is currently outperforming the U.S. stock market. While the Nasdaq and S&P 500 did close yesterday’s session in the green, they are currently flat or even slightly down for the week. Gold, on the other hand, is currently up over 2.5 percent this week. Interestingly, the U.S. Dollar Index also appears to have put in a temporary bottom, up over 2.5 percent since the end of April.

Putting this into context, the current pump in the crypto market might largely be attributed to large short positions being forced to close or even getting liquidated. Also, when looking at the spot ETF flows this week, there were no significant inflows into BTC products compared to the last few weeks. Something to keep in mind?

Chart of the Week: Bitcoin at new all-time highs vs the S&P 500

Today, Bitcoin has finally reached a new all-time high relative to the S&P 500. We have discussed this chart a few times already and noted its recent strength, which has now led to a new all-time high, surpassing the January 2025 peak. The current weekly candle hints at higher prices, but it remains to be seen how the candle actually closes this coming Sunday.

We want to highlight another chart this week as we take a look at the 1-year-rolling correlation of Bitcoin compared to other traditional asset classes such as U.S. bonds, commodities, equities, gold and real estate. As the chart below highlights, Bitcoin remains structurally uncorrelated with traditional asset classes and the move to the downside in April is particularly noteworthy. In a world of crowded beta trades, Bitcoin continues to offer pure diversification right when it matters most.

The special occasion this week leaves us with no other choice but to include a third chart this week. Ethereum is up more than 30 percent since yesterday. Yesterday’s gain of more than 21 percent marks Ethereum’s best day since 2021. ETHBTC is also up more than 22 percent since yesterday.

What’s Happening On-Chain? Percentage of Supply in Profit

Let’s take a look at the percentage of circulating supply in profit, meaning the percentage of existing coins whose price at the time they were last moved was lower than the current price. For Bitcoin, roughly 90 percent of the supply is currently in profit, up from 76 percent a couple of weeks ago. For Ethereum, this number is substantially lower, as currently only 51 percent of the supply is in profit, down from 96 percent in December.

Vitalik published another blog post calling for a significant simplification of the Ethereum protocol over the next five years, highlighting the beauty of Bitcoin’s simplicity. Vitalik suggests that Ethereum draw on Bitcoin’s minimalist design to reduce development costs and security risks caused by Ethereum’s complexity. He further brings up ideas to set a maximum code line limit for the long-term Ethereum specification, with the goal of making Ethereum's consensus-critical code nearly as simple as Bitcoin's.

Additionally, this week Ethereum’s Pectra upgrade went live on the Ethereum mainnet on Wednesday, 7 May 2025.

Digital Asset Fund Flows: The Brown University bought BlackRock’s IBIT

Last Friday, the Ivy League school Brown University disclosed in its latest 13F filing that it owns roughly $5 million in shares of the IBIT Bitcoin spot ETF as of 31 March 2025. The position is a new one, which means it was acquired in January, February, or March of this year.

Last week, digital asset investment products continued to attract new inflows, bringing in $2 billion in net new money in the third consecutive week with inflows. As always, Bitcoin led the charge with $1.8 billion of inflows, followed by Ethereum with $150 million.

Yesterday, Coinbase announced the acquisition of options trading platform Deribit for roughly $2.9 billion in cash and stock. The move underscores a push by crypto firms to widen their institutional investor base, while also catering to retail traders who are becoming more sophisticated.

Market Sentiment: Markets are Green and Greedy

When prices go up, market participants tend to become greedier. Interestingly, the crypto market is currently “only” in Greed territory at 73, compared to Extreme Greed levels when we passed the $100’000 mark for the first time toward the end of last year. Still, it's something to keep an eye on. The Crypto Fear and Greed Index is trending higher but clearly has room to move further to the upside, based on the chart below.

The stock market has recovered significantly in terms of sentiment. Last week, we mentioned that the CNN Fear & Greed Index was still in fear territory; today, it sits in greed, having skipped the neutral level entirely. Sentiment has risen in a straight line, aligning with the price action of major U.S. stock indices. Interestingly, when it comes to individual investors, the AAII Investment Survey shows that over 50 percent of respondents still say they are bearish on the stock market over the next six months.

Other Relevant News

• Warren Buffett announced on Saturday that he will retire at the end of this year. – Link

• Strategy has acquired 1’895 BTC for $180.3 million at $95’167 per Bitcoin. – Link

• According to Bitcoin Laws, Arizona's HB 2749 has been signed into law, officially establishing the state's first crypto reserve. While the law does not permit investment, it allows unclaimed assets, airdrops, and staking rewards to be transferred into the reserve. – Link

Looking Ahead: Can Bitcoin Hold $100k?

Going forward, it will likely be key to watch whether Bitcoin manages to stay above $100’000 for the time being. The whole world seems to be watching the asset, as it has been playing on its own playing field lately, outperforming everything, no matter the environment. Bitcoin seems to be evolving into a Swiss Army Knife asset, behaving like a macro-hedge alongside gold but also acting like a high-conviction growth asset, such as the Nasdaq.

This move above $100’000 has certainly drawn the attention of investors toward Bitcoin and likely also the broader crypto market, with the second-largest cryptocurrency moving more than 30 percent to the upside in a matter of less than two days.

While everything looks positive right now, we should keep in mind that the U.S. stock market has not performed particularly well this week, gold is still slightly up, and the U.S. Dollar Index seems to have found a bottom, at least temporarily.

Given the large number of short liquidations over the past 24 hours, it remains to be seen how the crypto market continues to trade without more power from additional short positions, as many underwater shorts were either forced to reduce exposure due to risk management or got liquidated today and yesterday.

The crypto market has moved up in a straight line since its bottom on 7 April. Sentiment analysis shows signs of greed, and memecoins have been performing well over the past days. There might still be some room left to the upside on a short-term basis, but chances for a pullback and a retest of lower levels are increasing.

All eyes are on this weekend's potential meeting between the U.S. and China and on next week’s economic releases, such as the U.S. inflation data on Tuesday, or the Initial Jobless Claims and Fed Chair Powell’s speech on Thursday, alongside GDP data from Japan and the UK.

Below, you can find some of the key data releases and events to watch out for next week.

Tuesday, 13 May 2025

• USA – CPI, Core CPI

• Japan – PPI

Thursday, 15 May 2025

• UK – GDP

• Switzerland – PPI

• Eurozone – Unemployment data, GDP

• USA – PPI, Core PPI, Initial Jobless Claims, Fed Chair Powell Speech

• Japan – GDP