Weekly Highlights

Macroeconomic Environment and Policy Developments

• Core PCE Surprise Fuels Macro Caution

On March 28, the U.S. released its February Personal Consumption Expenditures (PCE) data, showing signs of accelerating inflation—a notable contrast to the prior month. While headline PCE met expectations at 0.3% month-over-month and 2.5% year-over-year, both core PCE readings came in 0.1% above forecasts, indicating persistent underlying inflation pressure.

The current macroeconomic trajectory suggests a potential stagflationary backdrop, weighing on risk assets. Bitcoin’s recent price action reflects a typical “market cooldown,” with volatility continuing to decline. Although BTC has held above $80,000 for several consecutive weeks, it remains in a consolidation phase, with investor sentiment still cautious.

• U.S. Regulators Ease Crypto Restrictions for Banks and Derivatives

The U.S. Federal Deposit Insurance Corporation (FDIC) announced that institutions under its supervision, including banks, may now engage in crypto-related activities without requiring prior approval. Simultaneously, the Commodity Futures Trading Commission (CFTC) stated that digital asset derivatives will be treated the same as traditional derivatives, with no special restrictions.

Previously, the FDIC removed “reputational risk” as a factor in bank examinations, opening a path for banks to work with digital assets.. These regulatory shifts from both the FDIC and CFTC reflect a more favorable environment for digital assets under the current U.S. administration, potentially opening new avenues for institutional participation in crypto.

• Trump Launches Baseline Tariff Policy, Signaling Start of Global Trade War

On April 2, former President Donald Trump formally announced a sweeping shift in U.S. trade policy, unveiling a new 10% “universal baseline tariff” on nearly all imported goods, along with higher retaliatory tariffs targeting dozens of countries and regions. The announcement signals the official launch of what may become a full-scale global trade war.

According to documents released by the White House, the tariffs will be implemented in two phases: the 10% baseline tariff will take effect on April 5, while higher reciprocal rates for selected countries will be enforced starting April 9.

• Stablecoin Legislation Gains Momentum as House and Senate GOP Bills Advance

On April 3, the U.S. House Financial Services Committee passed the Republican-backed “Stablecoin Transparency and Accountability for a Better Ledger Economy” (STABLE) Act. The bill will move to the House floor for a full vote and aims to regulate payment stablecoins by requiring issuers to disclose information about their business operations and the assets backing their tokens.

Last month, the U.S. Senate Banking Committee advanced a similar GOP-led bill, the “Guiding and Establishing National Innovation for US Stablecoins” (GENIUS) Act, which outlines reserve and oversight requirements for stablecoin issuers.

• UAE Sets Q4 2025 Target for Digital Dirham Launch

The Central Bank of the United Arab Emirates is expected to launch its central bank digital currency, the “Digital Dirham,” in Q4 2025. Developed in collaboration with R3 and G42 Cloud, the CBDC initiative aims to enhance domestic payment infrastructure and enable modernized cross-border settlements as part of the UAE’s broader digital transformation agenda. In parallel, the UAE continues to strengthen ties with major crypto firms—including discussions with Tether and other stablecoin issuers—reflecting its open approach to building a diversified digital financial ecosystem alongside the CBDC rollout.

• SMBC Leads Effort to Commercialize USD and JPY Stablecoins in Japan

Sumitomo Mitsui Financial Group (SMBC), a major Japanese banking conglomerate, has signed an agreement with business systems provider TIS Inc, Avalanche developer Ava Labs, and digital asset infrastructure firm Fireblocks to explore the commercialization of stablecoins in Japan. According to a joint statement, the collaboration is based on a memorandum of understanding (MoU) and will focus on developing strategies for issuing and circulating stablecoins pegged to the U.S. dollar and Japanese yen.

The partnership will also examine using stablecoins as a settlement mechanism for tokenized real-world assets such as stocks, bonds, and real estate, aiming to bridge traditional finance and Web3 ecosystems.

Institutional Capital Flows and ETF Developments

This week, the cryptocurrency ETF market experienced notable volatility. After three consecutive days of net outflows totaling $311 million, spot Bitcoin ETFs recorded a $334 million net inflow on April 3, continuing the broader trend of sustained inflows. Meanwhile, Ethereum ETFs saw $50 million in net outflows, larger than the previous week's amount.

BlackRock’s spot Bitcoin ETF (IBIT) showed a 70% correlation with the Nasdaq-100 Index this week—a level reached only twice before. This highlights the continued influence of macroeconomic forces on Bitcoin’s short-term price action and suggests its behavior remains closely aligned with tech stocks. Supporting this, ETF data showed that despite strong weekly inflows, spot Bitcoin ETFs posted a $93 million net outflow on March 28. The total assets under management in Bitcoin ETPs dropped to $114.5 billion—the lowest level in 2025 so far.

Although Bitcoin is still widely viewed as a speculative proxy for tech, structural shifts are underway. An increasing number of corporations are adopting Bitcoin and related ETFs as part of their balance sheet diversification strategies, potentially signaling a move from trading asset to allocation asset.

In addition, leading digital asset manager Grayscale announced the launch of two new outcome-oriented Bitcoin ETFs: the Grayscale Bitcoin Covered Call ETF (BTCC) and the Grayscale Bitcoin Premium Income ETF (BPI). According to Grayscale, both products aim to generate income by systematically capturing BTC volatility through options strategies. The firm highlighted that the funds will offer monthly distributions and are designed to provide a differentiated income stream with low correlation to traditional yield-oriented investments.

Market Analysis – Bitcoin (BTC)

Weekly Market Overview

Bitcoin experienced heightened volatility this week, with prices trending downward amid renewed macroeconomic pressure. On March 28, BTC fell over 2.5% to around $85,000, breaking below its 20-day exponential moving average. The decline coincided with a broad equity market sell-off, driven by former President Trump’s announcement of sweeping new tariffs, reinforcing Bitcoin’s increasing sensitivity to macro events.

On March 30, market sentiment weakened further as traders reacted to Trump’s proposal of a 25% import tariff on foreign automobiles and a potential extension of tariffs to the pharmaceutical sector. His repeated reference to April 2 as “Tariff Liberation Day,” when retaliatory tariff rates would be assigned to various countries, added to the uncertainty. BTC fell to $81,656 on the day, marking its seventh consecutive daily loss and extending the downtrend.

On April 2, the White House formally announced a 10% “baseline tariff” on most imported goods, effective April 5. While the market had largely priced in the move, the lower-than-expected rate (some forecasts had projected 15–20%) temporarily eased panic. Bitcoin briefly surged over $1,500 to touch $88,000, but the relief rally proved short-lived, as the price pulled back to around $82,500 by day’s end, posting a loss of more than 5%.

Market Sentiment and External Influences

On March 31, Bitcoin fell to $81,222, capping off its worst quarterly performance since 2018. Still, on-chain indicators show signs of underlying accumulation. Notably, wallet addresses holding between 1,000 and 10,000 BTC have continued to rise, mirroring behavioral patterns seen during the early stages of the 2020 bull cycle. Analysts note that these entities tend to exhibit strong hands and long-term accumulation strategies, hinting at a potential structural shift beneath the surface volatility.

ETF flows remain a key driver of short-term sentiment. BlackRock’s IBIT ETF has reached a 70% correlation with the Nasdaq-100 Index—one of the highest levels on record—underscoring that institutions still perceive Bitcoin as a high-beta tech proxy, rather than a standalone macro hedge.

From a technical perspective, multiple short-term indicators suggest BTC is in oversold territory. However, upward momentum has yet to build meaningfully, and key resistance levels remain unbroken.

Looking ahead, market participants will closely watch the April 4 release of U.S. non-farm payroll (NFP) data, unemployment figures, and remarks from Federal Reserve Chair Jerome Powell. These macro events are likely to drive continued volatility, and traders should prepare for sharp moves in either direction.

Market Analysis – Ethereum (ETH)

Weekly Market Overview

Ethereum (ETH) came under notable pressure this week, posting a weekly decline of over 10%. On March 28, ETH dropped more than 5%, hitting a low of around $1,900. It continued to fall to $1,781 on April 2 and further to $1,751 intraday on April 4, marking the lowest level in nearly a month. The persistent downtrend reflected a clear lack of support and growing technical weakness.

On March 28, ETH fell by more than 5% to around $1,900. The decline was in line with the broader weakness across the crypto market, primarily driven by growing macro uncertainty following Trump’s tariff rhetoric and bearish technical signals. A significant liquidation event also occurred on the same day, contributing to the heightened volatility.

Within 24 hours, more than $97 million in ETH positions were liquidated, with long positions accounting for 91%—approximately $88.7 million. The forced unwinding of leveraged longs accelerated the price drop, which in turn triggered further selling from non-leveraged spot holders, amplifying the downside pressure. Across the entire crypto market, total liquidations reached $353 million, reflecting a concentrated deleveraging event.

Market Sentiment and External Influences

This week’s ETH price action remained highly correlated with BTC, and both were heavily influenced by macroeconomic concerns. Trump's sweeping new tariff policy, which reignited global trade war fears, weighed on risk assets broadly. Although the 10% baseline tariff announced on April 2 was slightly lower than some investors had anticipated (15–20%), the short-lived relief failed to reverse the prevailing bearish trend for ETH.

On-chain metrics also revealed signs of weakening sentiment. Large ETH holders became less active, DeFi total value locked (TVL) contracted slightly, and Layer 2 activity—including stablecoin volume—declined, indicating reduced risk appetite across the Ethereum ecosystem.

A key signal of Ethereum's relative weakness came on March 30, when the ETH/BTC ratio dropped to 0.021—the lowest in five years. The last time this ratio was at that level was in May 2020, when ETH was trading between $150 and $300. This highlights ETH’s underperformance against BTC and raises questions about whether a structural bottom is forming. ETH fell 18.47% in March alone, marking the fourth consecutive monthly red candle. The current downtrend, with each monthly close lower than the previous month’s low, resembles a bearish structure not seen since the 2022 bear market. Analysts are now divided—some see signs of bottoming, while others caution that further downside may lie ahead.

Overall, Ethereum has yet to establish a meaningful technical support structure. Although rising network activity and declining exchange balances may lay the groundwork for a potential recovery, ETH remains in oversold territory with limited upward momentum. In the near term, macroeconomic variables continue to dominate price action, with markets closely watching the April 4 release of U.S. non-farm payroll (NFP) data, unemployment figures, and remarks from Federal Reserve Chair Jerome Powell.