It’s the Stock Market, Stupid

Daily Updates:

• Chicago Fed President Austan Goolsbee advocated that the US economy is still solid underneath the surface and that “if we can get past this bumpy period, that the dual mandate still looks pretty good”. So far according to Goolsbee, there has been “surprisingly little direct impact in the data that’s coming out” and over a longer horizon “rates are going to be a fair bit below where they are today if we come back in 12–18 months”.
• Goolsbee also argued that the “stock market is not the economy” and that President Trump’s tariff uncertainty is creating “dirt in the air”. 
• Lorrie Logan, the Dallas Fed President also spoke yesterday at a banking conference where she maintained the view that both sides of the Fed’s dual mandate “appear fairly balanced”, meaning the Fed is “well positioned to wait for the data and to be patient”.

• US manufacturing data yesterday showed factory activity contracted in May for a third consecutive month. 
• The Institute for Supply Management’s Manufacturing Index dropped down 0.2 points in May to 48.5, below the reading of 50 which indicates a contraction, and below the expected 49.5.
• The ISM’s gauge of imports dropped 7.2 points to 39.9 – a 16-year low and a major departure from earlier in the year when imports spiked up as firms were importing more to get ahead of Trump’s tariffs. 
• Susan Spence, chair of the ISM Manufacturing Business Survey Committee said in a release that “imports continue to contract as demand has reduced the need to maintain import levels from previous months, as well as due to the impact of tariff pricing”.

• US treasury yields briefly pulled back following the manufacturing data release, but ended the day 4-7 bps higher across the curve. They have picked up where they left off in May, which was the first monthly decline in US treasuries so far in 2025 according to Bloomberg’s US Treasury Index.
• The move higher was led by longer-dated bonds, with the 10Y yield up 5bps to 4.46% and the 30Y yield at 4.99%. 

• US equities traded modestly, with the S&P 500 index ending the day +0.41% while the Nasdaq finished slightly higher at +0.71%.
• Bitcoin traded rangebound on Monday between $104K and $105K, however it is down -4% over the past 7 days. ETF outflows continued for a third day yesterday as spot ETFs saw $267.5M of outflows – we covered here that the shift in ETF flows has coincided with a drop in spot price, and a shift in options markets from OTM calls to OTM puts for short-tenor BTC options. 
• Front-end volatility across the term structure has fallen slightly over the last 24 hours – with 7-day options trading with an implied volatility of 37%. Put-call skew for 7-day options have skewed even more towards puts, now carrying a 2 point vol premium for 25-delta OTM puts relative to 25-delta OTM calls. 
• ETH’s term structure of volatility contrasts BTC’s steep and ‘normal slope’ – after many inversions in May, it currently trades flat – and skew is slightly less bearish for 7-day ETH options, though also skewed towards OTM puts. 
• ETH spot ETFs maintained their run of positive inflows netting $78.2M yesterday.
• 1M futures-implied yields for BTC and ETH have declined from their late May highs of 8.5% and 8.2%, respectively, to a still bullish but lower 6.3% and 4.9%.

• ETH spot has remained stable over this past week down -0.9% over the past 7 days, now trading at approximately $2.6k, up +5.3% in 24hrs.
• This comes as the Ethereum Foundation has announced a restructuring and rebranding of its Research & Development team. This includes tightening the operation by dismissing members and renaming the core team as “Protocol” with a realigned goal of their “three strategic goals: scaling the L1, scaling the blobs, and improving UX.”

• Robinhood Markets, a U.S.-based fintech company, announced on the 2nd of June the completion of its $200M cash acquisition of Bitstamp Ltd., a long-established global crypto exchange.
  
  
• UK-based FCA-registered crypto trading firm BCP Technologies has launched a Tokenised GBP (tGBP), a British pound-backed stablecoin issued as as an ERC-20 token on the Ethereum blockchain and fully backed 1:1 with GBP held in an independent holding account.
• The launch follows a 14-month review under the FCA’s regulatory framework and comes just days after the FCA launched a public consultation on stablecoin rules on May 28, 2025.
  

• UAE-based digital asset company Emirates Coin Investment LLC (EmCoin) has become the first firm in the country to receive a virtual asset services licence from the Securities and Commodities Authority (SCA)
• The licence authorises EmCoin to operate specific digital assets activities, including cryptocurrency trading within the UAE’s approved legal framework. 
• EmCoin is also working on launching the country’s first regulatory framework for Initial Coin Offerings (ICOs), potentially opening new avenues for capital formation and investment in the region.
• The Dubai Financial Services Authority (DFSA) has officially approved the use of Ripple’s stablecoin RLUSD, by DFSA-licensed entities within the Dubai International Financial Centre (DIFC).

• Educational technology company, Classover Holdings Inc. (NASDAQ: KIDZ) plans to raise up to $500M via secured convertible notes in partnership with Solana Growth Ventures, aiming to use 80% of the funds to purchase Solana tokens. This builds on a previous $400M equity deal, allowing for a SOL treasury worth $900M. 
• This adds to a number of publicly listed companies who have announced strategic crypto reserves over this past month, including Sharplink Gaming Inc (NASDAQ: SBET), Trump Media & Technology Group Corp (NASDAQ: DJT) and GameStop Corp (NYSE: GME).

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• Strategy is looking to raise further capital to expand Bitcoin holdings by selling 2,500,000 shares of 10.00% Series A Perpetual Stride Preferred Stock (STRD Stock). STRD is the third stock type issued by Strategy, following STRK and STRF and differs from MSTR by offering structured terms like non-cumulative dividends and redemption rights, rather than representing common equity.
• They have also added 705 BTC at an average price of $106,495 between May 26–June 1, now bringing total holdings to 580,955 BTC valued at over $40.68B as of June 1, 2025.

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