Daily Update:

• Scott Bessent was officially confirmed as the next Treasury Secretary by the U.S. Senate through a vote of 68 to 29 yesterday. The DXY rallied through the day as President Trump stated plans to place tariffs on “foreign production of computer chips, semiconductors and pharmaceuticals” as well as specific industries such as steel and copper. The Financial Times reported that Bessent is planning to gradually raise universal tariffs on U.S. imports on a monthly basis, starting at 2.5% and potentially going as high as 20%. That gradual increase will give time for businesses and consumers to slowly adjust and would be a more moderate policy than Trump’s pre-election campaign promises. Trump however responded saying that he wants tariffs “much bigger than 2.5%”, and that Bessent himself also would not support starting at 2.5%. 
• At market close yesterday, Nvidia had fallen 17%, with a near $600B loss in market cap – the largest ever single day loss for an individual company in U.S. stock market history. That decline was part of a wider 1.5% fall in the S&P 500 and 3.1% decline in the NDX 100. Nvidia said in  a statement that DeepSeek’s new model is an “excellent AI advancement”, “leveraging widely available models and compute that is fully export control compliant”. 
• BTC has been able to rebound from its fall, which was an in-tandem move with equity markets. Currently, spot price is up 3.5% on the day, back above the $100K mark. The implied vol term structure briefly inverted before quickly resolving. Volatility smiles continue to assign a vol premium to short-tenor puts. However, as we have noticed with previous sharp drops in spot price, longer tenors continue to exhibit a consistent call skew. ETH very much mirrors the same IV trends as BTC. See that in the ‘Charts Of The Day’. 
• Both the Spot BTC ETFs and ETH ETFs registered their largest day of outflows yesterday since the 8th of January 2025. The BTC products saw $457.6M leave the funds collectively and the ETH Spot ETFs had outflows of $136.2M. 
• Tuttle Capital has filed for 10 new 2x leveraged crypto ETFs, spanning a range of altcoins and meme-coins, from XRP and SOL, to MELANIA and BONK. 
• Russian state-backed power grid operator, Rosseti Group, creates plans to divert its unused electricity to Bitcoin mining in a bid to make use of the excess electricity supply while diversifying income and boosting BTC mining operations within the country.
• The FOMC meeting tomorrow will have four new voting members: Chicago Fed President Austan Goolsbee, Boston Fed’s Susan Collins, St. Louis Fed’s Gabriel Musalem and Kansas City Fed’s Jeffery Schmid. Goolsbee is viewed as the most dovish of the four and is replacing Cleveland President Beth Hammack, who was the lone dissenter in the December 2024 meeting, voting for no rate change. Schmid and Musalem have portrayed a more hawkish outlook recently and will replace Bostic and Daly, who were seen as more centrist voting members.

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This Week’s Calendar:

Charts Of The Day:

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