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Crypto Daybook Americas: Forex Markets Signal Bitcoin Upside Amid Tariff-On/Tariff-Off Trading
By Omkar Godbole (All times ET unless indicated otherwise)
If you follow financial markets, you’ve probably come across the terms «risk-on» and «risk-off.» Now we seem to be entering a new era of «tariffs on/tariffs off.»
In a risk-on environment, growth-sensitive assets like stocks and cryptocurrencies tend to rise due to expectations of economic expansion or accommodative monetary policy. Conversely, risk-off situations reflects a lack of investor confidence, leading to sell-offs and a preference for safer assets.
But this week, President Trump’s tariffs announcement have single-handedly guided markets. Early Monday, bitcoin (BTC) plummeted to nearly $91,000 as Canada and Mexico retaliated against Trump’s tariffs. That was «tariffs on» trading.
Later, it rebounded above $100,000 after Trump paused the Mexico tariffs for the 30 days and announced the creation a sovereign wealth fund, which generated hopes of potential investments in BTC. That was «tariffs off.»
The bullish momentum ran out of steam early Tuesday as China retaliated against Trump’s import tax, reviving «tariffs on» trading. BTC fell over 3% to $98,000, dragging altcoins lower. Nasdaq futures dropped over 0.5% and the dollar drew haven bids.
Bitcoin and the broader crypto market will likely rebound should Trump announce an 11th-hour deal with China, just as he did with Mexico and Canada on Monday. Foreign-exchange market activity suggests that’s likely. The AUD/CAD is down just 0.3% for the day, a sign traders don’t expect a prolonged tariff war between the U.S. and China. (The Australian dollar is widely seen as a proxy for China).
«A cross like AUD/CAD should trade sharply lower in this situation given Canada has dodged tariffs and China has not, but it is only 0.5% lower on the day. That signals markets are pricing in a good chance that the US and China will also strike a deal and delay tariffs,» ING said in a note to clients.
That said, you can never be sure of Trump. So, expect heightened volatility and stay alert!
What to Watch
Crypto:
Feb. 5, 3:00 p.m.: Boba Network’s Holocene hard fork network upgrade for its Ethereum-based L2 mainnet.
Feb. 6, 8:00 a.m.: Shentu Chain network upgrade (v2.14.0).
Feb. 13: Start of Kraken’s «gradual» delisting of the USDT, PYUSD, EURT, TUSD, UST stablecoins for EEA clients. The process ends March. 31.
Macro
Feb. 4, 10:00 a.m.: The U.S. Bureau of Labor Statistics (BLS) releases December’s Job Openings and Labor Turnover Survey (JOLTS) report.
Job Openings Est. 7.88M vs. Prev. 8.098M
Job Quits Prev. 3.065M
Feb. 4, 2:30 p.m.: White House AI and Crypto Czar David Sacks, along with four congressional leaders, hold a press conference on digital assets cooperation. Livestream link.
Feb. 4, 7:30 p.m.: Fed Vice Chair Philip N. Jefferson is giving a speech titled «U.S. Economic Outlook and Monetary Policy.»
Feb. 5, 9:45 a.m.: S&P Global releases January’s US Services PMI (Final) report.
Est. 52.8 vs. Prev. 56.8
Feb. 5, 10:00 a.m.: The Institute for Supply Management (ISM) releases January’s Services ISM Report on Business.
Services PMI Est. 54.3 vs. Prev. 54.1
Services Business Activity Prev. 58.2
Services Employment Prev. 51.4
Services New Orders Prev. 54.2
Services Prices Prev. 64.4
Feb. 5, 10:00 a.m.: U.S. Senate Banking Committee hearing on “Investigating the Real Impacts of Debanking in America,” featuring four witnesses including Nathan McCauley, co-founder and CEO of Anchorage Digital. Livestream link.
Feb. 5, 3:00 p.m.: Fed Governor Michelle W. Bowman is giving a speech titled “Brief Economic Update and Bank Regulation.”
Earnings
Feb. 5: MicroStrategy (MSTR), post-market, $-0.09
Feb. 10: Canaan (CAN), pre-market, $-0.08
Feb. 11: HIVE Digital Technologies (HIVE), post-market, $-0.11
Feb. 11: Exodus Movement (EXOD), post-market, $0.14 (2 ests.)
Feb. 12: Hut 8 (HUT), pre-market, break-even
Feb. 12: IREN (IREN), post-market
Feb. 12 (TBA): Metaplanet (TYO:3350)
Feb. 12: Reddit (RDDT), post-market, $0.25
Token Events
Governance votes & calls
Compound DAO is discussing the creation of Morpho-powered lending vaults on Polygon curated by Gauntlet. Polygon Labs is set to offer $1.5 million in POL, matched with $1.5 million in COMP to incentivize usage.
Arbitrum DAO is voting on whether to transfer 1,885 ETH in Nova transaction fees to its Treasury through the modernized fee collection infrastructure outlined in the ova Fee Router Proposal.
Aave DAO is nearing the end of a vote on deploying Aave v3 on Sonic, a new layer-1 Ethereum Virtual Machine (EVM) blockchain with a high transaction throughput.
Lido DAO is discussing distributing rewards to LDO stakers based on the protocol’s net revenue, as well as the use of a percentage of its annual revenue to buyback LDO tokens.
Feb. 4, 1 p.m.: TRON DAO and CryptoQuant to host a network review diving into performance, adoption and key metrics.
Feb. 4, 12 p.m.: Stellar to host its Q4 quarterly review.
Unlocks
Feb. 5: XDC Network (XDC) to unlock 5.36% of circulating supply worth $81.58 million.
Feb. 5: Kaspa (KAS) to unlock 0.67% of circulating supply worth $17.29 million.
Feb. 9: Movement (MOVE) to unlock 2.17% of circulating supply worth $31.60 million.
Feb. 10: Aptos (APT) to unlock 1.97% of circulating supply worth $68.20 million.
Token Launches
Feb. 4: Vine (VINE), Bio Protocol (BIO), Swarms (SWARMS), and Sonic SVM (SONIC) to be listed on Kraken.
Conferences:
Feb. 5-6: The 14th Global Blockchain Congress (Dubai)
Feb. 6: Ondo Summit 2025 (New York).
Feb. 7: Solana APEX (Mexico City)
Feb. 13-14: The 4th Edition of NFT Paris.
Feb. 18-20: Consensus Hong Kong
Feb. 19: Sui Connect: Hong Kong
Feb. 23 to March 2: ETHDenver 2025 (Denver, Colorado)
Feb. 25: HederaCon 2025 (Denver)
Token Talk
By Shaurya Malwa
Entities behind President Donald Trump’s memecoin TRUMP amassed nearly $100 million in trading fees within two weeks of its Jan. 17 introduction.
The fees were generated on Meteora, a DeFi exchange where the initial TRUMP coins were traded. Here, fees are charged for liquidity provision, which benefits the coin’s creators by allowing them to earn from trading activities indefinitely, according to Reuters.
A marketwide drop on Monday sent the token spiraling further down, bringing losses from the peak to a staggering 75%.
The president continues to endorse the token on his social media platform, Truth Social, where he posted «I LOVE $TRUMP!!» alongside a link to purchase the token over the weekend.
Derivatives Positioning
Perpetual funding rates for SOL, DOGE, ADA, LINK and AVAX remain negative, indicating a bias for short positions. These coins may see outsized gains on the back of a short-squeeze should the market environment flip back to «tariffs off» during the American hours.
Deribit’s ETH volatility index has retreated to 70% from above 100%. BTC’s volatility has faded from Monday’s spike to 61%.
The perpetual futures open interest-adjusted cumulative volume delta for most large-cap tokens, excluding TRX, is negative for the past 24 hours. That raises a question on the sustainability of the price recovery.
Deribit’s BTC, ETH options expiring this month continue to exhibit downside fears. The broader bias for bullish calls remains intact.
Block flows featured a bear call spread in SOL, a calendar spread in BTC and long positions in the ETH $3K and $3.2K calls.
Market Movements:
BTC is down 1.85% from 4 p.m. ET Monday at $99,347.23 (24hrs: +4.4%)
ETH is up 2.3% at $2,777.08 (24hrs: +7.45%)
CoinDesk 20 is down 2.21% at 3,154.76 (24hrs: +5.33%)
CESR Composite Staking Rate is up 88 bps at 3.91%
BTC funding rate is at 0.0035% (3.76% annualized) on Binance
DXY is down 0.39% at 108.57
Gold is down 0.16% at $2,814.16/oz
Silver is up 0.18% at $31.65/oz
Nikkei 225 closed +0.72% at 38,798.37
Hang Seng closed +2.83% at 20,789.96
FTSE is down 0.12% at 8,572.97
Euro Stoxx 50 is up 0.13% at 5,224.71
DJIA closed on Monday -0.28% at 44,421.91
S&P 500 closed -0.76% at 5,994.57
Nasdaq closed -1.2% at 19,391.96
S&P/TSX Composite Index closed -1.14% at 25,241.76
S&P 40 Latin America closed +0.25% at 2,376.48
U.S. 10-year Treasury is up 2 bps at 4.58%
E-mini S&P 500 futures are down 0.16% at 6012.75
E-mini Nasdaq-100 futures are unchanged at 21,398.50
E-mini Dow Jones Industrial Average Index futures are down 0.21% at 44,472.00
Bitcoin Stats:
BTC Dominance: 61.70 (1.06%)
Ethereum to bitcoin ratio: 0.02750 (-3.27%)
Hashrate (seven-day moving average): 833 EH/s
Hashprice (spot): $57.5
Total Fees: 6.1 BTC / $592,574
CME Futures Open Interest: 164,925 BTC
BTC priced in gold: 35.0 oz
BTC vs gold market cap: 9.94%
Technical Analysis
Bitcoin’s daily chart shows a classic «stair step» bull run, characterized by price rises followed by consolidations, representing accumulation periods.
The latest consolidation between $90,000 and $110,000 is the third such pattern since 2023. A breakout would mean continuation of the uptrend.
Note, however, that gains seen after the second consolidation between $50,000 and $70,000 were significantly less than those seen after the first breakout in late 2023.
Crypto Equities
MicroStrategy (MSTR): closed on Monday at $347.09 (+3.67%), down 1.35% at $342.40 in pre-market.
Coinbase Global (COIN): closed at $284.41 (-2.38%), down 0.47% at $283.08 in pre-market.
Galaxy Digital Holdings (GLXY): closed at C$28.02 (-1.62%)
MARA Holdings (MARA): closed at $17.95 (-2.13%), down 1.23% at $17.73 in pre-market.
Riot Platforms (RIOT): closed at $11.99 (+0.93%), down 0.58%% at $11.92 in pre-market.
Core Scientific (CORZ): closed at $12.33 (+0.49%), down 1.05% at $12.20 in pre-market.
CleanSpark (CLSK): closed at $10.59 (+1.44%), down 0.85% at $10.50 in pre-market.
CoinShares Valkyrie Bitcoin Miners ETF (WGMI): closed at $22.69 (+0.62%).
Semler Scientific (SMLR): closed at $50.46 (-2.89%).
Exodus Movement (EXOD): closed at $59.59 (+19.47%), unchanged in pre-market.
ETF Flows
Spot BTC ETFs:
Daily net flow: -$234.4 million
Cumulative net flows: $40.26 billion
Total BTC holdings ~ 1.177 million.
Spot ETH ETFs
Daily net flow: $83.6 million
Cumulative net flows: $2.84 billion
Total ETH holdings ~ 3.648 million.
Source: Farside Investors
Overnight Flows
Chart of the Day
Google trends for the worldwide search query «how to buy crypto» shows retail investor interest in digital assets has cooled since hitting a peak of 100 last month.
While You Were Sleeping
Ethereum Raises Gas Limits for First Time Since 2021, Boosting ETH Appeal (CoinDesk): Ethereum’s gas limit rose to nearly 32 million units, which should help increase the network’s throughput and potentially lower transaction costs during periods of high demand.
Lending Protocol Aave Processes $200M in Liquidation Without Adding to Bad-Debt Burden (CoinDesk): Aave processed $210 million in liquidations on Monday, the most since August, without adding new debt. Strong risk controls reduced existing liabilities by 2.7% amid market volatility.
TRON, Movement Labs Deny ‘Token Swap’ Deal for World Liberty Financial Inclusion (CoinDesk): Representatives from TRON and Movement Labs rejected allegations of token swap deals for treasury inclusion with World Liberty Financial (WLFI).
Yuan Extends Loss With China Proxies as US Trade War Reignites (Bloomberg): China’s retaliatory tariffs on U.S. coal, LNG, oil and agricultural equipment spooked Asia-Pacific markets, pressuring offshore Chinese yuan. Talks between the U.S. and China could help deescalate the trade war.
Stocks Erase Gains After China Retaliates Against U.S. (Financial Times): Shortly after Trump’s 10% tariff on all Chinese goods took effect on Tuesday, Beijing hit back by imposing import tariffs on various U.S. goods, causing global stocks to give back some of Monday’s gains.
Euro Stays Weaker Amid Tariff Risks (The Wall Street Journal): Danske Bank’s Stefan Mellin says Trump’s threats of tariffs on EU imports are likely to keep the euro under pressure over the next several weeks even though these might just be «primarily a negotiating tool.»
In the Ether
Traditional U.S. assets are going haywire as U.S.-China trade tensions continue to rattle global markets, now coupled with fresh data of tumbling sentiment towards the U.S. economy and mounting inflation concerns.
The most recent University of Michigan survey, published on Friday, found that consumer sentiment fell to 50.8 from 57.0, nearing the most depressed level in three years and far below that seen during the 2020 Covid shutdowns. Year-ahead inflation expectations surged to 6.7%, up from 5% in the prior month and the highest read since 1981.
On the back of the data, investors resumed selling long-term U.S. government bonds and the greenbacks, two assets traditionally considered as safe havens. The 10-year Treasury yield soared above 4.55% during U.S. morning hours, up more than 50 basis points in just a week. Meanwhile the dollar index (DXY) sank below 100 to a three-year low. Gold, meanwhile, hit a fresh record of $3,240 per ounce.
After a wildly volatile past few sessions, U.S. stocks were trading in a far tighter range on both sides of unchanged on Friday. At press time, the Nasdaq was higher by 0.6%
Meanwhile, cryptocurrency markets were moving higher, with bitcoin (BTC) holding just above $82,000, gaining 4% over the past 24 hours. The broad-market CoinDesk 20 Index was up 3%, with altcoin majors Solana’s SOL, Avalanche’s AVAX leading with 6% gains.
Signal or noise?
While some macroeconomic analysts are fearful that the recent surge in government bond yields is threatening the future outlook of the U.S. economy, others believe investors are reading too much into short-term market swings.
«U.S. dollars and U.S. government debt, two of the market’s most liquid safe haven categories, are going haywire,» Noelle Achison, analyst and author of the Crypto is Macro Now newsletter, said in a Friday note. «This is not the case for other safe havens, however, just those directly tied to the U.S.»
“I believe that it is much more likely that recent sharp moves in these asset classes is due to highly leveraged market participants being forced out of positions than due to fundamentals,” said billionaire investor Bill Ackmann in a post on X.
“Technical factors are driving the dramatic market moves,» Ackman continued. «As a result, markets have become increasingly unreliable as short-term indicators of the impact of policy changes.»
When the U.S. government sanctioned the Ethereum-based crypto mixing service Tornado Cash in 2022, it ignited a debate within the crypto community that continues three years later.
Tornado enabled users to transfer crypto anonymously. The government contended that the service facilitated money laundering, prompting some of Ethereum’s validators and block builders to take steps to avoid engaging with Tornado-linked transactions, which made the service slower and costlier to use.
Advocates argued that complying with the sanctions amounted to censorship — undermining a fundamental cypherpunk principle. President Donald Trump supported the cypherpunks and lifted the sanctions on Tornado Cash in March of this year, but for some Ethereum developers, the situation highlighted a flaw within the network that still exists today: Why should users depend on third-party apps to transact privately on the network?
«Publicly accessible transaction graphs allow anyone to trace the flow of funds between accounts, and balances are visible to all participants in the network, undermining financial privacy,» crypto security researcher Pascal Caversaccio explained in a blog post on Wednesday. «While the Ethereum network’s transparency fosters trustlessness, it also opens the door to potential surveillance, targeting, and exploitation.»
Perhaps emboldened by the recent Tornado Cash developments, Ethereum developers and researchers have once again begun discussing ideas for making the Ethereum network private at its core.
«Privacy must not be an optional feature that users must consciously enable — it must be the default state of the network,» said Caversaccio, whose post outlined his vision for a privacy-oriented Ethereum roadmap. «Ethereum’s architecture must be designed to ensure that users are private by default, not by exception.»
Caversaccio’s post identified several potential interventions — some new, some old — that could, according to him, would make Ethereum more private for end-users. One idea is to encrypt Ethereum’s public mempool — where transactions are sent before they’re recorded permanently. Another involves making Ethereum transactions confidential through zero-knowledge cryptography, new transaction formats, and other methods.
«Today, Ethereum operates in a partial, opt-in privacy model, where users must take deliberate steps to conceal their financial activities — often at the cost of usability, accessibility, and even effectiveness,» wrote Caversaccio. «This paradigm must shift. Privacy-preserving technologies should be deeply integrated at the protocol level, allowing transactions, smart contracts, and network interactions to be inherently confidential.»
In response to Caversaccio’s post, Ethereum co-founder Vitalik Buterin left a comment on the network’s main developer forum with his own much shorter privacy-oriented Ethereum roadmap.
Buterin suggested focusing on privacy for on-chain payments, anonymizing on-chain activity within applications, making communication on the network anonymous, and privatizing on-chain reads.
To achieve all of this, Buterin listed various steps like integrating certain third-party privacy features into the core network.
One of the more substantial interventions suggested by Buterin involves moving the network towards a “one address per application” model — a departure from today’s system, where a single application may employ dozens of wallets for different features. “This is a major step, and it entails significant convenience sacrifices, but IMO this is a bullet that we should bite, because this is the most practical way to remove public links between all of your activity across different applications,” Buterin wrote.
According to Buterin, if all of his suggestions are implemented, private transactions could be the default on Ethereum.
The privacy discussion comes a few weeks before Ethereum’s next major upgrade, Pectra, which doesn’t have a major focus on privacy. Ethereum developers are also currently planning the network’s following upgrade to Fusaka. The changes to be included in that hard fork are not yet set in stone.
Read more: Vitalik Buterin Disappointed With Embrace of Blockchain “Casinos”
The complex pipes that keep derivatives trades moving are about to get a major efficiency boost in DeFi, according to Crypto Valley Exchange.
Crypto Valley Exchange’s «smart clearing» protocol will lower the capital requirements for derivatives traders by setting collateral levels in light of the traded assets’ correlations in price. In doing so, it could make DeFi more competitive with the mainstream financial markets crypto trying to replace, according to CEO James Davies.
The service is a new take on an age-old problem in DeFi: how to sufficiently mitigate counterparty risk in a trustless environment.
Traditional financial markets like CME and NYMEX rely on clearinghouses to be a trusted counterparty for every buyer and seller. They demand some collateral, but hardly 100%. DeFi markets, meanwhile, definitely lack a trusted middleman, and so can’t afford to require anything less than full collateral.
This system works, but hardly well. More collateral requirements means traders have less capital to deploy elsewhere. Davies claims this severely limits the market’s growth.
«This is the one place where all of crypto is much more conservative than TradFi,» Davies said. «We’re really, really undersized in this space, and that’s because clearing is needed to create this efficiency.»
He pointed to the seeming lunacy of requiring full margin for trades involving highly correlated assets, like forms of oil.
«If I was to go to, say [commodities exchange] NYMEX as an oil company and want to buy oil and sell jet fuel, and you asked me to put down full margin on both parts, I’d laugh at you, because those things are 90% correlated,» Davies said.
He believes the same logic should apply in DeFi. «Ethereum isn’t going to 10,000 on the day Solana goes to zero,» he said. Because of the correlation, a trader betting that ETH will rise relative to SOL shouldn’t need to post full collateral.
In his telling, clearing is the missing piece in DeFi’s effort to gobble up traditional finance. If protocols gain an ability to better manage the risk, and also do so transparently, on a blockchain, so that everyone can see what’s happening and how, then they’ll become competitive with the financial rails they’re trying to replace.
«You can’t just build a perps DeFi platform for, say, treasuries or commodities, go up against NYMEX or go up against CME, and expect to win when you have to lock up so much more collateral than you would do to trade on those platforms.» Davies said.
If crypto’s real-world asset (RWA) subsector delivers on its promise of bringing tokenized versions of everything on-chain then, according to Davies, DeFi will need a solution to the clearing efficiency problem such as this. Institutional investors won’t put up with requirements for triple the collateral capital they’re used to – especially on correlated trades, he said.
The first user is Crypto Valley Exchange itself. Already, the Arbitrum-based futures and options DEX is running dated futures orders through its smart clearing. More capabilities are coming later this year to support commodities markets beyond crypto, and Davies hopes for other protocols to plug into smart clearing, too.
U.S. Consumer Sentiment Craters in First Post-Tariff Read, but Crypto Is Holding Up
Can Ethereum Be Truly Private? Developers Push for Encrypted Mempool, Default Privacy
Crypto Valley Exchange Bets ‘Smart Clearing’ Is DeFi Derivatives’ Missing Link
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