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Daily Updates:

• After the advance in risk-on sentiment last week, which saw the S&P 500 rally over 5%, this week has begun with a return to the ‘Sell America’ sentiment that gripped financial markets only a few weeks ago.
• Credit rating agency Moody’s Ratings downgraded the credit rating of the US from its highest level of Aaa down to Aa1. It cited a ballooning budget deficit, which is running close to $2T per year (6% of GDP) and a higher federal interest rate burden over the upcoming years as key reasons for the downgrade.  
• Moody’s Ratings is the last of the three big credit rating agencies to downgrade US debt – S&P downgraded the US back in 2011 and Fitch downgraded the US in August 2023. 

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• US equity-index futures have dropped this morning following the news, with S&P 500 futures trading 1.1% lower, and Nasdaq-100 futures declining 1.6%. The US treasuries yield curve has steepened, as the 10Y yield now once against trades above 4.5% and the 30-year equivalent briefly exceeded the psychological level of 5.00% before paring back. 
• Despite the volatile start to the week, Treasury Secretary Scott Bessent dismissed and downplayed the downgrade. In an interview on NBC, Bessent said “Moody’s is a lagging indicator, that’s what everyone thinks of credit agencies”. Trump’s administration has cited lower federal spending and a lower 10Y treasury yield as key goals – according to the Peter G. Peterson Foundation, $9.3T (⅓ of all existing US debt held by the public) is scheduled to mature between April 1, 2025 and March, 2026. 

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• After an early morning rally which saw it come within inches of $107K, signs of profit taking in spot has seen both BTC and ETH retreat from their midnight highs – and BTC has now joined the decline of US equity-futures, dropping down to $102K. 
• Despite the drop in spot price, sentiment in derivatives markets remains positive. Perpetual swap funding rates show strong demand for leveraged long exposure for both coins after ETH’s rate was intermittently negative throughout last week’s move.
• Front-end volatility in ETH also remains reactive to spot moves. While BTC’s term structure has flattened at the front-end, outright implied volatility levels remain between 40% and 50%.
• The rebound in one week tenor at-the-money implied volatility to 40% comes after a drop last week to 33%, the lowest level for ATM implied volatility since June 2024 for the 7-day tenor. 

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• DeFi Development Corp. (Nasdaq: DFDV) has partnered with the team behind the Solana-based memecoin BONK to jointly operate a validator node, sharing staking and rewards. This comes as DFDV takes steps to grow its validator operations to boost earnings and maximise yield on the SOL they hold.
  
  
• The Japanese investment firm, Metaplanet, often referred to as Asia’s “MicroStrategy”, has announced on Monday that it has acquired additional 1,004 BTC (at an average price of $103,873 per currency) as a part of its Bitcoin reserve strategy, which is worth approximately $104.3M.
• This brings the company’s total holdings to 7,800 BTC, purchased at $91,343 per Bitcoin, amounting to approximately $712.5M. At the current market valuations, Metaplanet’s BTC holdings have a value of approximately $806M.

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• As of last Friday, net inflows to BTC ETFs recorded a net $5.5B inflows since Trump’s “Liberation Day” tariffs on Apr 2, 2025, with $608M of those inflows coming in last week alone.

This Week’s Calendar:

Charts of the Day:

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