Last week, both cryptocurrency and traditional risk markets showed relatively flat performance as participants were focused on the tariffs set to take effect on April 2nd. While markets remained relatively steady, underlying anxiety grew following former President Trump’s announcement of a 25% tariff on all imported cars and reciprocal tariffs on trading partners on March 27th. Much of the market’s resilience appears to stem from short covering rather than fundamental trading.
Trading volumes for BTC, ETH, and SOL across global centralized exchanges remained subdued. This is notable since this period typically sees increased liquidity due to end-of-month portfolio rebalancing.
Another technical factor influencing broader market activity was GameStop’s announcement of a $1.3 billion convertible preferred bond offering (0% interest, maturing in 2030) intended for future Bitcoin purchases as part of its treasury strategy. In recent months, several publicly traded companies—beyond MicroStrategy (now Strategy)—have announced Bitcoin acquisitions, including Metaplanet, Solidion Technology, and Semler Scientific.
Strong Regulatory Tailwinds in the U.S.
The regulatory environment for crypto remains favorable, particularly in the United States. This was underscored by former President Trump’s speech at a digital asset summit last week, where he emphasized U.S. dominance in the sector and highlighted ongoing efforts to pass stablecoin and market structure legislation.
In a related development, the SEC hosted the first of five crypto working group roundtables on March 21st, focusing on the criteria for defining certain digital assets as securities. These discussions could help shape the framework for crypto market structure legislation. Additional roundtables are planned on topics such as custody, tokenization, and DeFi, with conclusions expected by June 2025.
The Senate also recently passed a resolution (with 70 votes) to overturn the IRS’s DeFi reporting rules. The resolution now awaits former President Trump’s signature.
Stablecoins Go Multi-Chain
The stablecoin landscape saw significant movement last week. The House released the full text of the Stablecoin Transparency and Accountability for Better Ledger Economics (STABLE) Act on March 26th. The draft legislation outlines preliminary directions for upcoming laws, including a ban on paying interest or yields to stablecoin holders and a two-year moratorium on new collateralized stablecoins (i.e., algorithmic stablecoins). The bill also details reserve and transparency requirements for issuers and establishes an approval process for entities seeking to launch new tokens.
At the same time, several new stablecoin initiatives gained traction:
- World Liberty Financial announced plans to launch its own treasury-backed stablecoin.
- Fidelity Investments is testing a dollar-pegged stablecoin, though official launch plans are yet to be confirmed.
- The state of Wyoming is entering the test phase for its Wyoming Stable Token (WYST).
Wyoming’s approach is particularly interesting. The state has partnered with LayerZero as its token issuance partner to deploy WYST contracts on Avalanche, Solana, Ethereum, Arbitrum, Optimism, Polygon, and Base testnets. This multi-chain strategy signals that tokenization may evolve as a cross-chain phenomenon in the long run, even though current focus remains largely on Ethereum.
Similarly, BlackRock expanded its on-chain treasury fund, BUIDL, to the Solana blockchain. The fund is now accessible on Aptos, Arbitrum, Avalanche, Ethereum, Optimism, and Polygon, indicating a growing willingness among institutional players to embrace multiple chains.
Interest in tokenized treasury funds has accelerated noticeably. BUIDL’s assets under management (AUM) increased by $1.3 billion so far this month, bringing the total to $1.9 billion. Although 90% of BUIDL’s supply remains on Ethereum, proactive expansion to other networks suggests that issuers are prepared to follow user demand and liquidity trends.
Crypto and Traditional Asset Overview
Cryptocurrency markets have shown a rebound, tracking closely with U.S. equity markets. Bitcoin reclaimed its key 200-day moving average, signaling improved near-term momentum. The Coin 50 index also rose but remains in a downtrend, reflecting relative weakness in altcoins.
Barring unexpected economic data releases, we expect range-bound trading to continue at least until April 2nd—the deadline for the new tariffs. Low single-digit perpetual funding rates, near-all-time-high stablecoin AUM, and narrow futures basis indicate that traders are maintaining light positions as they await further data before committing to significant risk.
Historically, April, May, and June have been seasonally challenging months for crypto assets. A cautious positioning strategy may prove prudent under these circumstances.
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Frequently Asked Questions
What is driving the current stability in crypto markets?
Market participants are closely monitoring macroeconomic policies, including upcoming U.S. tariffs. Much of the recent price action is attributed to technical factors like short covering rather than strong fundamental demand.
How are U.S. regulations affecting crypto?
Recent regulatory developments, including proposed stablecoin legislation and SEC roundtables, are creating a more structured environment. These efforts aim to provide clarity while promoting U.S. leadership in digital assets.
Why are stablecoins expanding to multiple blockchains?
Issuers are adopting multi-chain strategies to enhance accessibility, interoperability, and resilience. This approach allows projects to reach users across various ecosystems and adapt to shifting liquidity patterns.
What are tokenized treasury funds?
Tokenized treasury funds like BlackRock’s BUIDL represent traditional financial instruments issued on blockchain networks. They combine the yield of traditional assets with the efficiency and transparency of digital tokens.
Is now a good time to invest in cryptocurrencies?
Market conditions are currently uncertain due to seasonal trends and macro policy risks. Investors should conduct thorough research, consider dollar-cost averaging, and only invest what they can afford to lose.
How can I stay updated on crypto market developments?
Follow reputable news sources, monitor regulatory updates, and use reliable data platforms. Engaging with informed communities and using professional tools can also help you make better-informed decisions.