Weekly Market Update: Expectations Vs Reality

It’s sometimes said “the secret to happiness lies in low expectations” – a philosophy that might have served us well at the outset of 2025, given how the year has unfolded so far.

Expectation: The Fed finally nails the ‘soft landing’

Picture this: Jerome Powell, shades on, sipping a cocktail, declaring: “Inflation? Under control. Recession? Nope… We’re good!” Markets cheer, stocks moon and the macro guys pop champagne. Everyone’s betting on 2% GDP growth, unemployment chilling around 4% and rates dropping.

Reality: Soft landing? More like a faceplant unfolding in slow motion!

Cut to today: Inflation’s playing whack-a-mole, down to 2.5%, then bam, 3.8% because supply chains are still hungover from 2024’s geopolitical chaos. The Fed’s juggling rate hikes and cuts, GDP’s sputtering at 1.2% (maybe going negative) and unemployment’s creeping up to 5.5%. Markets? They’re screaming “pivot!” while Powell’s muttering, “let’s wait and see.”

Expectation: Dollar’s dead, crypto’s king

The macro doomscrollers swore the USD was toast – hyperinflation, BRICS nations dumping it, and Bitcoin stepping up as the new reserve global currency. “Cash is trash!” they yelled, hoarding sats like digital gold.

Reality: Dollar’s like, “reports of my death were greatly exaggerated”.

The USD’s still flexing – sure, it’s wobbly, but it’s not dead. BRICS tried, but their “new currency” is a geopolitical memecoin with no liquidity. Bitcoin’s a hedge, but not as much as gold. Cash isn’t trash yet; it’s just… less sexy.

Macro’s messy and crypto’s chaotic!

Fear and uncertainty has entered the broad market as the real impact of President Trump’s great economic plan is starting to be felt around the world. Money is starting to rotate as investors seek to preserve capital and position for increased volatility.

Rationality seems to have abandoned the market, and a prime example of this is the past week in the cryptocurrency space. It has been one of the most bullish weeks on record, driven by the announcement of the U.S. establishing a strategic crypto reserve and the inaugural White House Crypto Summit. These developments signal a formalised and very promising future for digital assets – yet we saw a brutal sell off.

The key questions now facing crypto investors is whether the market has already priced in this bullish news, or if its significance was overshadowed by the surrounding chaos? And what could be the next bullish catalyst to spark a recovery rally?

Market sentiment is bouncing along rock bottom: Fear and extreme fear.

Highlights this week: 

• It was a week of highs, lows and more volatility as Bitcoin led the crypto market from a recovery on U.S. crypto strategic reserve news to a near $20k plunge on unmet expectations from the White House Crypto Summit and subsequent broad market sell off, with plenty of chop in between.
• Extreme Fear has gripped the market as traders were liquidated in record numbers. 
• Notably, BTC printed its biggest weekly candle decline ever (nearly -$14k) closing last week just above $80k. And recovering to $82.8k at time of writing.
• General sentiment across social media is back at bear market lows, and not just in crypto! But not everyone is selling – whales have been buying throughout the past week.
• Another tough week for many Altcoins facing double digit declines, some retracing to start of cycle lows: ADA -21.9%, JUP -20.1%, FET -19.9% and INJ -16.6%
• XRP and SOL have faced increasing sell pressure down -12.0% and -11.4% for the week (at time of writing).
• ETH continues to struggle as it broke a key support level to trade below $2,000 in the sell off, currently down -10.5% for the week.
• The top performer this week goes to BCH defying the market trend with +9.5% growth.

View all top gainers: Visit the top gainers page to find out more. 

Highlights from the crypto space

Speculation was running wild ahead of the first ever White House Crypto Summit on Friday, but if price is now any indication of success then it was a ‘sell the news’ event! The market was expecting a dazzling performance with promises of crypto tax cuts and bold visions of a new crypto golden age. But instead it felt like another rug pull, with endless stroking of President Trump’s ego, leaving many feeling disappointed. 

A highlight, Crypto Czar David Sachs said: “U.S. government crypto holdings will be audited to find out what digital assets we actually have.”

As the broad market faced a violent sell off earlier this week, Bitcoin longs got obliterated in the biggest wipeout since the crypto casino meltdowns (Celsius, 3AC, FTX) of 2022. Leveraged traders got rekt!

Were market expectations for the Summit grounded in reality? Traders were clamoring for a dramatic breakthrough – think a ‘moonshot’ like a 1 million Bitcoin acquisition or President Trump boldly opening a 50x leveraged long position. Anything less than a jaw-dropping revelation was almost certain to be labeled a letdown. In reality, the summit was evidence and proof that the U.S. now has a proper digital asset strategy – a far cry from where we were just 1 year ago.

One day ahead of the summit, President Trump signed an executive order creating a Strategic Bitcoin Reserve. The reserve is funded exclusively with Bitcoin seized in criminal and civil forfeiture cases, ensuring that taxpayers bear no financial burden. The order also established a U.S. Digital Asset Stockpile, managed by the Treasury Department, to hold other confiscated cryptocurrencies.

Michael Saylor says the US government should aim to hold a quarter of Bitcoin’s entire supply by 2035, when 99% of all BTC will have been issued. He also unveiled a plan to raise more capital to buy another $21 billion Bitcoin.

Whilst the U.S. crypto strategic reserve is not as bullish as expected for Alt Coins, it is still very  bullish for some very good reasons. It signals ‘official acceptance’, likely easing regulatory fears and boosting investor confidence. Global competition could follow, driving demand for Bitcoin’s limited supply. The government holding onto its 198,000 seized Bitcoins (rather than selling low) adds stability. The overall effect points to higher adoption and prices. 

In other bullish news, the Texas Senate passed the Bitcoin strategic reserve bill SB-21 in a 25-5 vote on March 6, following a fierce debate on the state Senate floor. Texas State Senator Charles Schwertner, who introduced the legislation, argued for the bill and said “we don’t have stacks of dollar bills and safes like we did in medieval times. What we have is digital currency.”

Despite the growing popularity, a new report shows that in 2025 only 4% of the global population currently holds Bitcoin (1% being governments & institutions), with the highest concentration of ownership in the United States estimated at 14% of individuals, and the lowest in Africa estimated at only 1.6%.

In a controversial post on social media, Binance founder CZ said too much money is spent chasing small, quick gains in crypto: “focus on ethical teams that build for the long term. Big money is built slowly with stamina.”

Bitcoin has underperformed in the face of rising economic uncertainty. In contrast, gold has strengthened as a safe-haven asset, surging in value amid growing demand for stability. A Bank of America fund manager survey from February indicated that only 3% of fund managers viewed Bitcoin as a reliable store of value.

In other crypto news…

• The U.S. Senate voted to overturn a controversial tax rule that requires “custodial brokers” to collect and report user data to the Internal Revenue Service – and is set to get President Donald Trump’s sign-off.

• The U.S. Office of the Comptroller of the Currency set out to clarify that crypto activities are allowed in the federal banking system, representing a major reversal of its previous position. In reference to the White House Crypto Summit: “today’s action will reduce the burden on banks to engage in crypto-related activities.”

• Japan’s ruling party seeks to reduce the tax rate on crypto to 20%, matching stocks. It currently imposes taxes of up to 55% on crypto gains.

• The IMF has issued new requests under its $1.4 billion deal with El Salvador, aiming to restrict BTC purchases by the public sector.

• Coinbase is optimistic about after discussions with the SEC’s new crypto task force about potentially introducing tokenised securities (i.e. Coinbase stock to trade in crypto markets) and international crypto products to the U.S. market.

• Hyperliquid has claimed over half of the on-chain perpetual market – in a 24-hour window, data shows total volumes sitting at $14.37 billion, with Hyperliquid capturing a staggering $9.30 billion; that’s 64.71% of the entire space!

• Bankrupt crypto exchange Mt. Gox transferred 11,834 BTC worth over $1 billion to an unmarked address last week. Are they getting ready to make more repayments and will this money flow back into the crypto market? 

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🌎 Macro news TLDR: …Recession? Not quite yet.

Global growth concerns have shot back onto the radar of financial markets as weakening US economic data and growing trade tensions hurt consumer confidence and business activity. And recession fears are starting to be heard worldwide.

Trying to make sense of it all… one needs to consider the question: does the U.S. government want a recession?

Nearly $3 trillion of U.S. debt is expected to hit maturity in 2025, much of it of a short-term nature. That could provide another downdraft should the market not be able to absorb what already is expected to be massive Treasury issuance to cover the near $2 trillion budget deficit – the quickest way to lower rates ahead of this massive refinancing could be a recession.

Is President Trump actually playing 4D chess with his tariff threats – causing 10 year bonds to drop, inflation to slow, the US dollar to drop and markets to sell off – and forcing the Fed to take action on further rate cuts or economic stimulus? 

Could this be a play out of President Regan’s playbook, a ‘controlled demolition’ and short term pain to spur a faster economic recovery? Or is President Trump just an agent of chaos and confusion. At this point it’s anyone’s guess! 

U.S. economic news

President Trump is still ‘all in’ on his trade war and trading blows with Canada this week: “All I know is that we’re gonna take in hundreds and billions of dollars in tariffs and we’re going to become so rich, you’re not gonna know where to spend all that money.”

A trade group representing nearly all major automakers warned that the new 25% tariffs on imports from Canada and Mexico will lead to drastic price hikes. In response, President Trump announced that automarkers would be exempt for another month – and all goods under the North American Trade Pact too. It’s hard to keep up!

Many U.S. equities and major indices are quickly entering correction territory on declining consumer sentiment and nervous markets – Tesla shares have given up almost all their post-election gains, declining over -50% since their December peak.

On Tuesday, the sell off intensified as the US stock market had its biggest daily decline since 2022, erasing more than $1.7 trillion.

A U.S. recession is not the base case but it’s not off the radar! Jerome Powell says the Fed can wait to see how President Trump’s aggressive policy actions play out before it moves again on interest rates: “we do not need to be in a hurry, and are well positioned to wait for greater clarity.”

A big CPI release is on the way later this week… and if the Republican-controlled U.S. Congress can keep the government funded and avert a partial shutdown.

Across the border, in Canada, Former central banker Mark Carney won the race to become leader of Canada’s ruling Liberal Party and will succeed Justin Trudeau as prime minister, in the midst of a trade war – they must still hold a general election soon.

Over in Europe….

“I am very concerned about the European economy,” said senior European Central Bank policymaker Mário Centeno Centeno to CNBC on Friday.

In a widely expected move, the European Central Bank (ECB) cut rates by a further quarter-point to 2.5% on Thursday citing “huge uncertainty” – but in a more hawkish tone also signalling a possible slowdown in future rate cuts stating “monetary policy is becoming meaningfully less restrictive”.

Germany announced plans for an unprecedented spending spree that sent bond yields to historic jumps last Wednesday – their political establishment tentatively agreed to all but dismantle the country’s ‘debt brake’ with plans to spend over €1 trillion over the coming decade on defence and infrastructure that could revive the Eurozone economy.

President Macron, in a televised address to the nation (and all of Europe) last week, described Russia as a “threat to France and Europe” and said he had decided “to open the strategic debate on the protection of our allies on the European continent by our (nuclear) deterrent.”

European leaders backed plans to spend more on defence and continue to stand by Ukraine at the European Union’s defence summit in Brussels – amid fears that Russia, emboldened by its war in Ukraine, may attack an EU country next and that Europe can no longer rely on the U.S. to come to its aid. 

And in Asia Pacific…

China’s CPI fell into negative territory in February for the first time since January last year – it comes as investors continue to look for signs that Beijing’s stimulus measures can help to boost the country’s struggling economic recovery. China’s growth target of around 5% this year may be challenging to achieve, particularly amid an escalating trade dispute with the U.S.

The shutdown of south-east Queensland and northern NSW for Cyclone Alfred will cost the Australian economy several billion dollars in lost activity, but economists said work to repair and rebuild the damage would boost growth this year.

Australian pension funds record the biggest fall in asset values in nine months as the impact of President Trump’s economic policies are felt around the world.

NZ breathed a sigh of relief last week when Adrian Orr, Governor of the Reserve Bank of NZ, finally resigned. Collective cheers of “farewell and thanks for the inflation” could be heard as the country continues to grapple with a cost of living crisis. Orr will be remembered for his famous quote: “It’s a great business to be in central banking, we print money and people believe it”. 

Floating rate mortgages surge as ANZ and BNZ bosses suggest that reduced capital requirements could make loans cheaper. 

The latest figures from Statistics NZ show just 35 consents were issued for new retail premises in Q4 of 2024, down -24% from Q4 of 2023 – that was the lowest number of consents issued for new retail premises since Statistics NZ began publishing the data in 1990.

That’s a wrap for this week!

Stay tuned for the next update

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