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Last Updated:  
March 14, 2025
2 mins

Crypto Markets Daily Mar 14 2025

The increasing worries surrounding an ever-evolving program of tariffs by President Trump continues to weigh on risk-on sentiment for US equities. The latest episode involves a potential 200% tariff on EU wine and alcohol products. The S&P 500 has officially joined the NDX in entering a technical correction, though crypto-assets on the other hand have slowly moved up through yesterday evening into today.

Daily Updates:

  • It’s another day, another tariff from the Trump administration, and another sign that a full tit-for-tat trade war is already underway. Yesterday the President threatened a 200% tariff on wine and alcohol from France and the rest of the EU on his social media platform, stating that the levies would be a retaliation to the EU’s potential 50% tax on American whisky exports. These were themselves a retaliation to Trump’s blanket metals tariffs that became effective Wednesday this week. 

  • The worries around tariffs have market participants already pricing in a greater weight to the downside growth risks that tariffs will bring compared to their potential upside inflationary pressures. That belief is what has caused bond markets to price in 3 rate cuts for the year – something we will be able to compare to the Fed’s March SEP. 
  • But it has also weighed heavily on risk-on sentiment. Whilst the NDX already entered a technical correction, the S&P 500 pushed 1.4% lower yesterday by the developments in the EU trade war, now 10% lower than its all-time high.
  • At-the-money implied volatility levels at all tenors for BTC have dropped off since yesterday, particularly at the front-end, which has resulted in a dissipation of its inverted term structure. While ATM vol levels for ETH have compressed, they remain inverted with 7-day tenors assigning a significant 20 point vol premium to their BTC counterpart. 

 

  • Ripple has received approval from the DFSA to provide regulated crypto payments in Dubai. They are set to roll out their cross-border transaction model while ensuring regulatory compliance, alongside driving stablecoin adoption for real-time settlement.

  • World Liberty Financial Inc., a nonstock corporation which owns the World Liberty Financial Protocol and is backed by the Trump family, is reportedly in discussions with the Binance exchange. One of the supposed topics of discussion surrounds the possibility of a Binance and WLF US-dollar backed stablecoin. 
  • It was also reported that representatives of the Trump family are in talks about acquiring a stake in Binance’s US arm, though Binance’s founder, Changpeng Zhao, dismissed the claims stating he has not held discussions about a Binance.US deal with anyone.

  • The Senate Banking Committee advanced a bipartisan stablecoin legislation bill called the GENIUS Act on Thursday with a 18-6 majority that will regulate private US dollar-based stablecoin issuers.
  • The Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act aims to split stablecoin regulation between state and federal authorities, formally define which entities can issue stablecoins, and introduce new enforcement and transparency requirements for stablecoin issuers. 
  • Smaller US stablecoin issuers (issuers of stablecoins with a market-cap below $10B) can operate under state supervision, giving states more power in regulating a portion of the stablecoin market, whilst larger stablecoin providers will be under federal jurisdiction.
  • The bill now needs to be passed by the overall Senate as well as gain approval in the House of Representatives before landing at President Trump’s desk. 

This Week’s Calendar:

Charts of the Day:

Figure 1. BTC at-the-money implied volatility across selected tenors. Source: Deribit, Block Scholes
Figure 2. ETH at-the-money implied volatility across selected tenors. Source: Deribit, Block Scholes
Figure 3. BTC 25-delta put-call skew ratio across selected tenors. Source: Deribit, Block Scholes
Figure 4. ETH 25-delta put-call skew ratio across selected tenors. Source: Deribit, Block Scholes
Figure 5. BTC Perpetual Swap Funding Rate. Source: Deribit, Block Scholes
Figure 6. ETH Perpetual Swap Funding Rate. Source: Deribit, Block Scholes
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