Bitcoin Bets Remain Ahead of Key Data, Earnings Barrage

While Bitcoin has somewhat disengaged its correlation with tech stocks, last week, the OG crypto token led the gains among risky assets and marked its best week of gains since Trump's election win in November, far outpacing the recovery in Wall Street stocks.

The question doing the rounds now is whether Bitcoin is a risky asset or a hedge against geopolitics similar to gold. Gold lost some of its allure late last week after hitting $3,500 an ounce for the first time ever as news of China looking to ease the trade war rhetoric emerged.

But Bitcoin continued its climb from last week into Monday, recovering significantly to nearly $95,000 after falling below $75,000 earlier this month. Still, the crypto token is well below its all-time high of over $109,000, which it hit on the day of Trump's inauguration earlier this year.

As investors evaluate the implications of Trump's trade war, the tech-focused Nasdaq 100 index has increased by approximately 5%.

Nonetheless, Bitcoin has experienced a 12% rise since last week and is approaching the $95,000 price threshold again, a trend not observed since early March.

Suggested relationships within the cryptocurrency space continue to intensify amidst the ongoing fluctuations. While market breadth has improved, macroeconomic and geopolitical factors continue to be the main influences on flow.

The creation of a Bitcoin reserve and the assurance that any remaining Bitcoin would be "made in the USA" were central to Donald Trump's platform throughout the presidential campaign.

The industry's increased involvement in the election through substantial political donations may have encouraged Trump to change his initial skepticism to support digital assets during his campaign.

Consequently, Bitcoin reached a new all-time high of approximately $109,000 on January 20, coinciding with Trump's inauguration.

However, concerns that the administration's implementation of trade tariffs could lead to potential disruptions in the global economy and inflation resulted in a price decline of up to 30% in the subsequent weeks.

Bitcoin and other cryptocurrencies are exempt from taxes, unlike many companies whose stocks are included in the index.

However, it has been moving like other risky assets recently, and even with the latest split, it still has a significant connection with stocks, which are usually evaluated over long periods to smooth out short-term volatility.

Bitcoin surfaced as a decentralized digital currency as a reaction to the financial turmoil of 2008. The digital currency is seen as a refuge when other assets decline in value. Many individuals perceive the token as an excellent option for value preservation, akin to digital gold. Recently, Bitcoin has outperformed gold in terms of performance.

With bullion reaching unprecedented heights last week, the trading volume of options on the SPDR Gold Shares ETF exceeded 1.3 million contracts, marking a historic milestone.

Simultaneously, the expense of protecting against downturns in the exchange-traded fund is at its lowest point since August, while implied volatility has experienced a significant increase, creating an atypical scenario.

As investors rebalanced their holdings, fold has declined over 6% from its intraday high last week, reflecting indications that certain trade tensions might be subsiding.

According to the latest data from the Commodity Futures Trading Commission (CFTC), hedge fund managers have reduced their net long futures and options positions on the metal to the lowest level in over a year.

Gold has significantly outperformed other asset classes this month, including US equities and Treasuries, due in part to the current trend toward caution caused by tariffs and the idea that "US Exceptionalism" is fading.

Nevertheless, strategists at Barclays say the yellow metal is outperforming its fundamentals. As a recent note pointed out, the current monthly gold buys are in line with the historical pattern of central banks investing in the asset.

Stefano Pascale of Barclays highlighted that the recent outperformance has generated significant speculation. Interest in the gold ETF surging after Trump's "Liberation Day " led to an inversion of skew.

The analysts cautioned that this, combined with the recent decline in bullion and a reduction in hedge fund positioning, should prompt investors to exercise caution—at least for now.

While the market fluctuations triggered by President Trump's tariff announcements on April 2 have diminished, stakeholders will be attentively monitoring the earnings reports from key corporations this week to assess the impact of US trade policies on their financial performance.

Recent information regarding the US economy could support the notion that the Federal Reserve may lower interest rates earlier than expected.

Investors are meticulously monitoring any updates regarding the US trade negotiations, especially in light of Trump's suggestion that he is unlikely to delay the implementation of his increased tariffs for an additional round.

The Asian economies are at the forefront of trade negotiations with the administration despite encountering some of the most challenging US "reciprocal" tariffs.

The Trump administration has developed a strategy to engage in negotiations with approximately 18 countries. The strategy features a framework that outlines shared interests to guide the discussions, which will assist in strategizing the forthcoming actions.

Elsewhere

Blockcast

How Startale Group is Building "Web3 for Billions of Users"

Ever wondered how Web3 will reach billions? Tune in as we chat with Sota Watanabe, CEO of ⁠Startale Group⁠ about his ambitious vision. Startale's portfolio includes Astar Network and the exciting new Ethereum Layer-2, Soneium, developed in partnership with Sony Group using Optimism's OP Stack for faster and cheaper transactions.

We unpack Soneium, their new cost-effective Ethereum Layer-2, the groundbreaking collaboration with Sony, and Sota's insights on the future of blockchain. Get ready for a deep dive into the next evolution of the internet!

Blockcast is hosted by Head of APAC at Ledger, Takatoshi Shibayama . Previous episodes of Blockcast can be found here , with guests like Jacob Phillips (Lombard), Chris Yu (SignalPlus), Kathy Zhu (Mezo), Jess Zeng (Mantle), Samar Sen (Talos), Jason Choi (Tangent), Lasanka Perera (Independent Reserve), Mark Rydon (Aethir), Luca Prosperi (M^0), Charles Hoskinson (Cardano), and Yat Siu (Animoca Brands) on our most recent shows.