The Fifth Inning

Daily Updates:

• Treasuries across maturities ended a five-day selloff on Friday and continued that move yesterday with the 2Y yield, most sensitive to Fed policy, falling 12bps and the 10Y yield declining by 10bps closing at 4.38%. That follows a close to 70bps surge in the 10Y yield last week. 
• The relief in bond markets was extended into the equity and crypto markets too. The S&P 500 ended the day up 0.79% and the Nasdaq-100, consisting of a more tech heavy basket of companies that have been subject to the zigzagged electronics tariffs, ended the day 0.57% higher.  

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• BTC traded within a narrow bound of $83-85K and is currently at the upper end of that range while ETH spent most of the day around $1.6K.
• BTC’s term structure has now normalized following the flat structure of yesterday as implied volatility at all tenors across the curve declined, particularly at the front-end. 
• Seemingly at a lag to BTC, ETH’s term structure has now flattened, having spent most of the first half of April inverted.
• Additionally, ETH futures markets at 1 week expiries have now almost recovered from their discount to spot. 

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• Speaking to Bloomberg, Treasury Secretary Bessent stated he does not believe there has been a “dumping” of US treasuries and according to “tick data” that “foreign ownerships picked up”. 
• A similar message echoed from former Treasury Secretary Janet Yellen who said yesterday that she would not expect China to sell US treasuries either, as it “would be pushing up the value of their [China’s] own currency and creating risks to the Treasury market and to global financial stability that would harm them”. 
• Yellen also added that she does not think “we’re seeing dysfunction in the sense of liquidity completely drying up in the markets, but a pattern suggestive of a loss of confidence in US economic policy”. 
• Recently however we have been seeing investors rush away from US denominated assets – equities, US treasuries and the dollar itself – which is down 4% from where it was this time last month. Instead alternative haven assets have been outperforming: the Swiss franc is up +8.45% against USD in a month, Japanese yen +3.43% and gold +8.23%. 

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• Trading of gold in particular exploded last week in China as the Shanghai Futures exchange saw the highest trading volumes for the asset so far this year (see below). 
• That has resulted in gold prices in China carrying a $20/ oz premium compared to international prices. 
• We have noted in the past that gold buying in China has not just been limited to retail – the PBOC, The People’s Bank of China, purchased 2.8 tons of gold in March, a fifth consecutive purchase after the central bank purchased 316 tonnes in an accumulation period which began from 2022 and ended in May 2024. 

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• As ETH continues to trade without many of its own idiosyncratic drivers to push price upwards, the SEC has delayed what could be a significant tailwind for the asset. The SEC announced it has moved its deadline for approving Grayscale’s proposal to allow staking to its Ethereum Trust and Mini Ethereum Trust Spot ETFs to June 1, 2025. 
• The SEC also delayed a decision on whether it will allow in-kind redemptions for WisdomTree’s Bitcoin Fund and VanEck's Bitcoin Fund and Ethereum Fund.

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• Tether has partnered with OCEAN, a decentralized mining pool, to allocate its Bitcoin mining hashrate in an effort to enhance decentralization. Using the open-source DATUM protocol, the system is designed to deliver high-performance mining operations by allowing miners to build their own block templates, even in bandwidth-constrained environments.
• MicroStrategy Incorporated released a statement on April 14 disclosing the acquisition of 3,459 BTC between April 7 and April 13, 2025, for approximately $285.8M at an average price of $82,618 per Bitcoin. This brings Strategy's total Bitcoin holdings to 531,644 BTC, acquired at an aggregate purchase price of $35.92B, with an average purchase price of $67,556 per Bitcoin.

This Week’s Calendar:

Charts of the Day:

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