“They want the tariffs”

In case you missed it! Our recap of last week’s reports:

• Why is Bitcoin Bearish Despite a Dovish Fed?
• Bybit x Block Scholes July Volatility Review

Daily Updates:

• The month of September has begun with considerable risk-off sentiment across Wall Street, with US equities joining the global selloff in government bonds.
• 30-year US treasury yields jumped 5bps to end the day at 4.97%, further steepening the yield curve, while the S&P 500 ended the day down -0.69% (after making a modest recovery later in the day from the session lows). 
• Earlier today, the selloff in US debt deepened further, and 30-year treasury yields rose past 5% for the first time since mid-July 2025.

• President Trump’s reaction to the selloff in equities was to tell reporters that “The stock market’s down because the stock market needs the tariffs. They want the tariffs”. 
• Trump added: “We would have to give trillions and trillions of dollars back to countries that have been ripping us off for the last 35 years, and I can’t imagine it happening on a legal basis”. 
• Among various other drivers of the rise in long end US treasuries, such as increased long-term inflation expectations and term premia, lower income from tariffs could result in the US treasury department issuing more debt to cover the spending deficit in the US. That would add to already existing fiscal concerns which have also driven longer-dated bond yields higher.
• In fact, earlier in the year Trump touted his tariffs as a key driver to reducing the US debt: tariffs will bring in “trillions of trillions of dollars to reduce our taxes and pay down our national debt”.

• The rise in longer-dated government bonds was not just on display in the US.
• The yield on 30-year gilts rose to its highest since 1998 along with a drop in the pound amidst fiscal pressures and budget concerns in the UK. 
• French 30-year government bond yields rose past 3.58%, a level last seen in 2009, while Japan’s 30-year government bond yield jumped 8bps to 3.28% yesterday and is now trading at 3.29%— the highest ever on record. 

• President Trump also added that his administration will ask the US Supreme Court to expedite its ruling on whether his imposition of tariffs over the past few months have been legal. 
• A ruling from the Supreme Court would help Trump overturn the decision of a federal court on Friday that deemed Trump had wrongfully invoked an emergency law to impose his program of reciprocal tariffs.

• The selloff in stock and bond markets did also see investors push towards typical safe haven assets. The US dollar rose 0.7%, its biggest intraday gain since late July, while gold rose to another record-high.

• Crypto options markets also continue to reflect a sense of lingering pessimism. Downside protection continues to trade at a premium to call options. In BTC, 25delta put-call skew is trading at -4.08% for 7-day options, compared to a -4.75% skew in similar dated ETH options. That’s a change from what we observed last week, where skew in BTC carried a stronger tilt towards puts than it did in ETH options. 
• Yesterday, BTC fell to $108K before bouncing back to $110K and trading flat at those levels. ETH dropped off from its ATH of $4,900 on Aug 24 to $4,300 by Aug 29, however since then, it has traded sideways between $4,200 and $4,400. Nonetheless, its spot price is down 6% over the past week. 
• The more recent resilience in ETH stands out given that Spot Ethereum ETFs have seen outflows both on Friday last week (-$164.6M) and yesterday (-$135.3M), which is usually correlated with a sell-off in spot price.
• Spot Bitcoin ETFs on the other hand did not see outflows yesterday, starting the month with $332.8M of bitcoin purchases – again notable for its minimal impact on price.

• Cryptocurrency exchange Gemini Space Station Inc. is looking to raise as much as $316.7M in its initial public offering, as it becomes the latest crypto firm joining the surge for a public US listing. 
• According to its filing with the SEC, the exchange plans to market 16.7M shares at a price between $17 and $19 each in its IPO. 
• The company expects to list on the Nasdaq Global Select Market under the symbol GEMI.

• Publicly listed BNB treasury strategy CEA Industries Inc. (Nasdaq: BNC) has announced a further purchase of 38,888 BNB ($33M USD) tokens, bringing its total holdings to 388,888 BNB ($330M USD).
• They are already the world’s largest corporate BNB treasury and this purchase comes as part of the company’s publicly stated goal of owning 1% of BNB’s total supply by the end of 2025. 

• Crypto exchange Crypto.com and fantasy sports and gaming company Underdog Sports have launched a new sports-based prediction market which will be available in 16 states across the US.
• The prediction market will be hosted on Underdog’s platform while Crypto.com Derivatives North America (CDNA), which is currently registered with the Commodity Futures Trading Commission (CFTC), will provide the underlying trading contracts.

• The Ethereum Foundation has announced the sale of 10,000 ETH tokens via centralized exchanges to fund ongoing Research and development, grants, and donations.
• The sales will be broken into multiple smaller orders, rather than as a single large transaction.

This Week's Calendar:

Charts of the Day: