Crypto Markets Daily Mar 6 2025

Daily Updates:

• BTC has been able to continue the recovery that it began on Tuesday amidst a wider breath of relief for risk-on assets as President Trump announced intentions to exempt automakers from his recently imposed tariffs on Mexico and Canada for one month. That temporary reprieve gave US equities a boost – SPX rose 1.1% and the Nasdaq-100 ended the day up 1.36%. 
• The term structure of volatility for both BTC and ETH still remains inverted, though skew for short tenor BTC options is now positioned closer to neutral, relative to much of this week which saw put options in far higher demand than calls.

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• Macro data released yesterday from the US showed a more mixed picture: the ISM’s Services Index rose from 52.8 to 53.5 in February, exceeding economist expectations of a drop to 52.7 and signalling continued expansion in US services. 
• ADP jobs data, however, disappointed – private hiring at US companies slowed to its lowest pace since July, with private payrolls rising by 77,000 in February, significantly lower than the expected 141,000.

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• The EU has proposed plans to send loans totalling up to €150B ($158B) to the governments of the 27 EU countries in a bid to help them boost military defense spending, following President Trump’s intentions to pause the flow of all US military aid into Ukraine. This marks a major pivot point for the EU which has traditionally provided financing for infrastructure and agriculture projects, as opposed to financing military spending. Additionally, the EU is exploring a fiscal escape clause, which would allow European countries to use their national budgets to spend an additional €650B (separate to the €150B above) on defense over the next four years.

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• Separately, the German government is also planning its own so-called fiscal bazooka. Friedrich Merz, the Chancellor in-waiting, announced a plan that would amend the German constitution to exempt spending on defense and security from the usual limits on fiscal spending. The end goal? A “whatever it takes” measure to defend Europe’s largest economy and allow for uncapped military spending. We also covered previously that Merz, together with the Social Democrats party, plans to create a €500B ($528B) infrastructure fund for domestic investment in transport, housing and energy over the next 10 years. 

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• In response to the pledge of huge spending, Euro-area bond yields have skyrocketed as investors anticipate a huge supply of bond issuance. The rally in yields began with 10-year bunds which rose 30bps – the largest one–day move since 1990. As the day continued however, 10-year bond yields in France, Spain, UK and Italy all rallied by 25-30bps. In contrast, US 10 year yields ticked up only 3bps. But it wasn’t just bond yields in Europe that rose dramatically yesterday: the 10-year yield on Japanese sovereign bonds rose over 7bps, crossing 1.5%, a level last seen in June 2009.

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• The guestlist for Trump’s White House Crypto Summit continues to grow with some of the biggest players in the industry confirming attendance. From the likes of Michael Saylor, Founder of Strategy and Brian Armstrong, CEO of Coinbase to JP Richardson, CEO of Exodus. 

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• Noble launched its yield-bearing stablecoin, USDN ("Noble Dollar"), on March 5th, offering a 4.15% yield backed 102% by US Treasury bills.
• According to on-chain data from Arkham Intelligence, World Liberty Financial, the Trump family backed DeFi protocol has increased its ETH holdings in the past week from 2,200 to over 7,000 ETH, purchased by its USDC holdings. 
• The Bybit Team has submitted a proposal to DeFi protocol ParaSwap on March 3, requesting them to compensate them the 44.67 wETH earned as transaction fees from swaps of the illicit Bybit hack funds. This has sparked split opinions amongst governance voters with no resolution yet.

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This Week’s Calendar:

Charts of the Day: