On Monday, US stock indices opened, with the Nasdaq down 1.3% during the session, the S&P 500 down 0.9%, and the Dow Jones down 0.4%. Gold rose 0.56% to $3,335 per ounce. Key data to watch this week: On Wednesday, Q1 US GDP previous value 2.4%, expected value 0.4%, with market expectations of a significant decline; on Friday, US non-farm employment previous value 228,000, expected value 135,000. The outlook for US economic and employment data is relatively poor.
Back to the point:
The Wall Street Journal: Kevin Warsh, a leading candidate for the Federal Reserve, stated that when the outcomes of monetary policy are poor, the Fed should accept rigorous questioning and strong oversight, and take responsibility when mistakes are made. The current predicament of the Fed is largely self-inflicted. To regain credibility, restore its position, and most importantly, avoid worse economic outcomes for citizens, a strategic reset is necessary. SEC member and head of the crypto asset working group Hester Peirce stated at the SEC’s 'Know Your Custodian' meeting that the current regulatory environment for US crypto assets is akin to playing a game of 'the floor is lava' in the dark, and there is an urgent need to establish clear compliance channels to provide guidance for crypto asset custody and trading to promote healthy market development. According to the Hong Kong Wen Wei Po, the Hong Kong police received nearly 100 reports of investment fraud in the past week, with total losses exceeding HKD 90 million, urging vigilance against low-risk, high-return investment scams on social platforms. Bloomberg: Elon Musk's AI startup xAI plans to raise $20 billion, potentially becoming the second-largest startup financing in history, second only to OpenAI's $40 billion financing earlier this year. On April 28, the crypto fear and greed index was at 54, indicating a return of neutral market sentiment.
Analyst ali_charts stated that nearly $9 billion flowed into the crypto market in the past week, indicating a resurgence of market interest. BlockBeats: The SEC approved three XRP futures ETFs, scheduled to launch on April 30, 2025. CryptoQuant analyst Julio Moreno indicated that the BTC bull market index reached 60, suggesting that market optimism is rekindling as demand for BTC and stablecoin liquidity begins to rise again. Matrixport analysis noted that after two months of sideways consolidation and slight increases, preliminary signs of a warming trend from dollars to cryptocurrencies are beginning to appear, with improved liquidity and a positive change in the overall environment. Bitcoin Laws reported that two BTC reserve bills in Arizona are scheduled for a third reading on Monday; if passed, Arizona is expected to become the first state in the US to officially establish BTC reserves, marking significant progress in state-level digital asset policy. IntoTheBlock indicated that short-term traders' positions in BTC significantly increased last week, reflecting a resurgence of speculative demand. If this influx of funds continues, it suggests that the current rise is not just a technical rebound but potentially the beginning of a broader uptrend.
Last week, US BTC spot ETF had a cumulative net inflow of $3.0629 billion. ETH spot ETF had a cumulative net inflow of $157.1 million. Grayscale met with the US Securities and Exchange Commission (SEC) crypto working group in Washington on April 21 to discuss the regulatory changes for staking ETH ETP, proposing to amend the 19b-4 application for ETH ETF to allow staking. BlackRock’s BTC spot ETF IBIT saw inflows for 9 consecutive days, increasing its holdings by $1.6 billion in BTC. Bitfinex analysts stated that inflows into the spot BTC ETF have increased, showing a moderate optimistic sentiment in the market, while price fluctuations may still occur in the short term. The market increasingly expects BTC to reach higher price levels in the second quarter of 2025. On April 28, Tether issued $1 billion in stablecoin USDT. The total market value of stablecoins increased by 1.61% in the past 7 days, reaching $238.101 billion. The Federal Reserve entered a quiet period before the interest rate meeting on May 7, with the market expecting the Fed to maintain stable rates for the third consecutive time. Barclays stated that recent mild tariff comments from Trump have calmed the market, but the outcome remains highly uncertain, and Barclays is skeptical about whether the US can avoid an economic recession this year, which increases the rationale for the Fed to cut rates. Bank of America warned that the dollar is undergoing long-term depreciation, and funds exiting the US will continue until the Fed starts to cut rates. LSEG data shows that the money market indicates that investors have fully digested expectations of a rate cut in July, with a possibility of a rate cut in June.
Economist Javier Bianchi stated that tariffs are a negative demand shock for the US, implying deflation. The Federal Reserve must implement expansionary monetary policy (i.e., interest rate cuts) through temporary inflation to avoid more severe economic consequences for the US. Economic and employment data to be released in the US this week: On Tuesday, March JOLTs job openings; on Wednesday, Q1 real GDP and core PCE price index; on Friday, non-farm unemployment rate. Previous GDP value is 2.4%, expected value 0.4%; Q1 core PCE previous value is 2.6%, expected value 3.2%; unemployment rate previous value is 4.2%, expected value 4.2%; previous non-farm employment value is 228,000, expected value 135,000. The outlook for US data this week is relatively poor, with expectations of significant declines in GDP and non-farm employment, while the unemployment rate remains stable and core inflation PCE rises. The probability of a rate cut in May is less than 10%, while the probability of a rate cut in June is between 60-70%, and the market fully prices in a rate cut for July. Last week, inflows into BTC spot ETFs exceeded $3 billion, with BlackRock’s BTC spot ETF increasing its holdings of BTC by $1.6 billion over the past 9 trading days, and Bitcoin rebounding to between $93,000 and $95,000. After the pause in rate cuts, hopes are that the cryptocurrency market will gradually heat up this summer.
