Bitcoin Bonanza: Trump’s Tariff Twist Transforms Crypto Chaos! 😂

by

On a rather peculiar Wednesday in April, the world of stocks and crypto decided to dance a wild jig. US President Donald Trump, in his inimitable style, put the brakes on tariffs for a cool 90 days (except, of course, for China—because why not?). Bitcoin, ever the opportunist, shot up 5% in the blink of an eye, flirting with that elusive $83,000 mark it hadn’t graced since April 6. 😏

Meanwhile, while the S&P 500 casually boasted an 8% gain, Bitcoin derivative metrics were muttering under their breath, “Hold on a minute, mate!” All the while, traders kept a wary eye on those long-term government bonds that seem to cause more sleepless nights than a British summer rain.

In a brief but theatrical moment—akin to an awkward dance move at a family wedding—the BTC futures premium waltzed above the comfortable 5% mark, only to lose its rhythm soon after. Investors smirked at the mere suggestion that the Federal Reserve might lower interest rates this year. Still, the premium dared to drift away from the March 31 safety net of 3%, perhaps signaling a tiny spark of hope among Bitcoin enthusiasts after several failed attempts to nudge prices above $76,000. 😂

Ah, the 10-year Yield Roller Coaster!

A fair dose of trepidation slithered into traders’ hearts after the release of those famously dramatic Federal Reserve meeting minutes from March 18-19. With a cameo from the ever-dreaded stagflation, the chance of interest rates dipping below 4% by September 17 nosedived from 97.6% on April 8 to a less-than-convincing 69.7% on April 9. Talk about mood swings!

As if reading a thriller, market pundits fretted over a weakened 10-year US Treasury yield—a telltale sign that confidence in managing America’s swelling debt was about as sturdy as a chocolate teapot. Economist Peter Boockvar even quipped that there’s a neat little line around 4.40%—beyond which, foreign investors might start ghosting US Treasurys. 🤨

It turns out that when bond yields rise, it’s the market’s cheeky way of saying, “We deserve a bit more for our troubles!” The rising cost of juggling debt might just turn the mighty US dollar into a slightly more anxious version of itself. Bitcoin options markets, not wanting to be left out, echoed this uncertainty with a dramatic flair.

The Puzzling Case of the Indifferent Bitcoin Bulls

In calmer—or at least more predictable—times, when traders sense an impending hiccup, put options typically trade at a premium, nudging the quirky 25% delta skew above 6%. In the midst of bullish exuberance, however, the same indicator usually dives below -6%, as if the market were on a seesaw of exuberance and caution.

On that famously unpredictable April 9, the Bitcoin options delta skew soared to a dizzying 12% after China decided to up its tariff ante with a sharp retort. But then, in a plot twist worthy of a holiday special, President Trump’s announcement of a tariff pause coaxed the figure right back down to a measured 3%. The options market, it seems, opted for an even-keeled approach, signaling the end of a bearish spell that had cast its gloom since March 29. 😜

Not to be left out of the fun, the realm of perpetual futures (or inverse swaps, for those in the know) beckons us to examine leverage demand. These contracts mirror spot prices with the precision of a well-rehearsed echo, all while relying on an 8-hour funding fee that typically lounges between 0.4% and 1.4% over a 30-day period.

In another twist on our April escapade, the 30-day Bitcoin futures funding rate climbed to 0.9%—its highest in over six weeks. This uptick, likely hinting at retail buyers tentatively dipping their toes into the market pool, still fell snugly within the neutral zone. It appears the tariff pause was about as effective as a lukewarm cup of tea in rallying market confidence, especially with the relentless trade war drama with China still unfolding.

In the end, the mystery lingers: what magical catalyst will finally coax Bitcoin traders into a bullish stance? Perhaps a reduction in macroeconomic uncertainty—say, a gentle dip in the US 10-year Treasury yield—might be the key. Only time (and a dash of serendipity) will tell. 🤔

A word to the wise: this little frolic through economic quirks is meant solely for your amusement and enlightenment—not as legal or investment advice. The insights shared here are as personal as an old friend’s ramblings on a rainy day.

Read More

2025-04-10 00:46