Weekly Market Update: Smoke, Mirrors and Seismic Shifts

A brilliant headline from The Guardian newspaper perfectly sums up the meta narrative this week: “The damage is done: Trump’s tariffs put the dollar’s safe haven status in jeopardy”.

Buckle up… the U.S. dollar’s reign as the world’s financial titan is a spectacular story of brilliance, swagger and a slow-motion collapse that’s upending the global stage.

It all kicked off at Bretton Woods in 1944, where a war-torn world crowned the U.S. dollar king, pegged to gold at $35 an ounce – a bulletproof vow of stability backed by America’s industrial power. Fast-forward to 1971, and the fairy tale cracked. Nixon, buried under Vietnam War bills and trade shortfalls, yanked the dollar off gold, kicking off the fiat free-for-all where money’s only as good as the trust behind it.

For decades, it worked like a charm. The dollar ruled oil trades, global commerce, and debt markets, cementing US dominance. But reserve currencies aren’t immortal! History’s graveyard holds Spanish Reales, Dutch Guilders and British Pounds to name a few – the fallen giants that whisper a timeless truth: every currency eventually crumbles under its own weight and inflation’s unyielding grip. 

It appears that the grave site may have already been marked out for a wobbly U.S. dollar. 

About every 50 years, the system chokes on its own excesses, with purchasing power fading and calling for a reset. The math is brutal: since 1975, the U.S. dollar has shed 83% of its purchasing power against everyday goods. $1 coffee in 1975 is $6 today. 

Gold paints a bleaker picture. An ounce cost $140 back then; now it’s over $3,000 – and not just sitting pretty, but sniffing out trouble and front-running the Fed’s next cash tsunami. But every Quantitative Easing binge dilutes the dollar further, printing trillions to prop up markets and service a runaway $36 trillion U.S. debt mountain. The quick fix is losing its kick – more money chases less growth.

Enter Bitcoin, the wild card. Could this decentralized, borderless digital asset elbow its way into the global reserve currency game? While gold’s the old guard, Bitcoin’s the rebel – its rise from zero to over $2 trillion (at its recent ATH) in 15 years has central bankers sweating. A global reserve? Not quite yet as volatility and scale are hurdles, but it’s whispering a future where trust isn’t owned by any one nation.

The dollar’s throne is shaky and the world is noticing. The unipolar and globalized era, where the US called the shots and supply chains hummed in sync, is shattering into a nationalist and fragmented slugfest. Tariffs are flying, trust is fading and production networks, once a global symphony, are quickly becoming geopolitical flashpoints.

China’s hoarding gold, BRICS are scheming dollar-free trades and allies are hedging bets. The U.S. dollar’s still king, but confidence is its only glue, and that’s fraying fast. 

This seismic shift isn’t just shaking markets – it’s rewriting the global order. 

Market sentiment is still showing: Fear

Highlights this week: 

• While BTC is not directly affected by tariffs, and the major sell-off from recent ATH happened before the peak of trade war chaos erupted, the uncertainty of it all has suppressed bullish appetite for the time being.
• BTC is currently stable in the mid-$80,000 range, with its market dominance climbing to 63.9% this week, marking a four-year high.
• Total Crypto Market Cap is at $2.6 trillion and down just over $1 trillion from recent highs.
• Market sentiment has recovered slightly but remains firmly in “Fear” – waiting for a clear breakout to fuel investor confidence to jump back in.
• Bitcoin ETF inflows have remained remarkably muted over these past 6 weeks despite the increase in board market volatility, which suggests many of the weak hands may have already been flushed out in the earlier 30% price retracement.
• Most of the top 100 coins clawed back to finish in the green this week (at time of writing).
• Of the major Altcoins, SOL, XRP and AVAX led the recovery this week posting strong double digit gains.
• The surprise winner of the week was FARTCOIN showing that hot air rises (again) and often on nothing more than pure hype, speculation and TA.
• Followed closely by JASMY up +43.6% this week.
• The biggest loser was MANTRA down -87.4% after what looks like a rug pull – more details in the following section.
• EOS also had a tough week down -12.0%. 

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

Highlights from the crypto space

Asset Manager Greyscale has claimed that trade tensions may be positive for Bitcoin adoption as increased tariffs could lead to stagflation and continued weakening of the U.S. dollar as the global reserve currency – leaving room for new reserve assets like gold and crypto.

Michael Saylor has signaled that (Micro) Strategy plans to acquire more Bitcoin following a near two-week pause in purchases that left many speculating about possible liquidation risks if the price was to fall below their accumulation average of $68k. The company now holds 528,185 BTC.

A massive whale opened a 40x long position for nearly $200 million in Bitcoin over the weekend on Hyperliquid – leaving many retail speculators to wonder what he/she may know that we don’t!

Bitcoin has managed to outperform broader risk assets in April so far, posting smaller losses than U.S. tech equities:

The S&P Volatility Index has surged to its highest level since the Japanese ‘carry trade unwind’ last August, indicating increased market uncertainty.

But the BTC to VIX ratio has hit a long-term trendline, historically suggesting a potential bottom for Bitcoin prices – having previously marked the bottom for major market events.

The price of MANTRA token has collapsed in what is being called possibly the biggest rug pull since LUNA/FTX – falling from $6.3 to below $0.50 and losing over 90% of its $6 billion market cap.

The team claims there were forced liquidations by centralized exchanges that triggered a cascading price drop – but prominent industry figures have condemned the incident alleging that the Mantra team sold their tokens OTC and have abandoned the project.

We are just over one month away from the 21 May, 2025 deadline for the SEC to decide on Grayscale’s request to convert its XRP Trust into a spot ETF. Whilst, XRP (and SOL) stand out as two of the most popular assets for ETF applications because they are among the most liquid – the odds of approval before 31 July have continued to drop on Polymarket.

A report from the Wall Street Journal alleges Binance founder “CZ” provided evidence against TRON founder Justin Sun as part of his plea deal with the U.S. Department of Justice – he served just a four-month sentence after pleading guilty to violating the Bank Secrecy Act. Sun downplayed the rumors, calling CZ his “mentor and a close friend”.

Standard Chartered is working with crypto exchange OKX on a collateral mirroring programme, enabling institutional clients to utilise cryptocurrencies and tokenised money market funds as off-exchange collateral for trading.

Chief Crypto CIO from trading platform Robinhood claims the biggest barrier to crypto adoption in 2025 is user experience, not regulation or scalability.

The CEO of Kindred says “web3 needs to be more human” because the interfaces and user experience in Web3 tools are terrible when compared to their Web2 counterparts – and that leads to losing the attention of many users. But AI agents combined with emotional AI will be an excellent tool to overcome these weaknesses with potential to improve user experience.

In other crypto news…

• The US Senate has confirmed President Trump’s ‘pro-crypto’ pick Paul Atkins as chair of the Securities and Exchange Commission in a 51-45 vote.

• The SEC delayed decision on in-kind redemptions for Bitwise and WisdomTree’s crypto ETFs and postponed a ruling on Grayscale’s plan to allow staking in its Ethereum Trusts.

• Ethereum researcher Virgil Griffith was released from prison custody last week after he was arrested in 2019 for giving a lecture about blockchain technology and its power to circumvent US sanctions to an audience in North Korea.

• 21Shares has launched the first Dogecoin ETP (exchange traded product) on the SIX Swiss Exchange under the ticker DOGE – it’s 100% physically backed.

• South Korea is expanding a ban on digital asset firms’ applications as the country’s Financial Services Commission (FSC) announced that 14 crypto exchanges were blocked on the Apple store – among the affected exchanges are KuCoin and MEXC.

• The TRUMP memecoin will unlock 40 million extra tokens worth $320 million on Friday – the token has already lost 83% of its value since launch and investors have reportedly lost around $2 billion.

🌎 Macro news TLDR: Art of the Deal or Art of War?

President Trump’s trade war upended global supply chains, strained alliances, and triggered market turmoil, wiping out over $10 trillion in global wealth in a bid to close a $1 trillion U.S. trade deficit. 

Was this the triumph America sought – a reassertion of dominance? Or was it a calculated gamble to crash markets, drive investors into U.S. Treasury bonds, suppress interest rates, and refinance $9 trillion in U.S. debt at lower levels? 

With “Liberation Day,” Trump appeared to play a masterstroke, as allies and adversaries rushed to negotiate. Yet, in a stunning twist, he abruptly reversed course just hours after imposing the sweeping global tariffs.

Why the U-turn? Was it all a grand display of dealmaking bravado – or something deeper?

The cracks started to appear when China refused to blink, matching U.S. tariffs tit-for-tat. The real fracture came with a sell-off in Treasury bonds, spiking yields and a plummeting U.S. dollar, that exposed the fragility of America’s financial dominance. 

For decades, the U.S. has leaned on its global reserve currency status to borrow heavily, outsource production, and sell off assets to sustain an ‘unsustainable lifestyle’. Now, the world order is shifting beneath our feet.

Does President Trump have another ace up his sleeve? The answer is coming – and fast.

U.S. economic news

In a dramatic reversal, mere hours after new global tariffs triggered a chaotic ‘sell-everything’ market plunge, President Trump took to Truth Social to announce a temporary rollback, slashing tariffs to 10% for most nations while ramping up pressure on China with a steep 125% rate – which later increased to 145%.

In a cryptic move, President Trump posted on Truth Social at 9:37 AM ET today, declaring “it’s a great time to buy.”

Hours later, his announcement sparked a market explosion, with the Nasdaq soaring 12% and the Dow skyrocketing a historic 3,000 points, adding over $3 trillion in value in just 10 minutes. Was this the boldest insider trading signal ever?

U.S. 10-year Treasury yields registered the biggest weekly rise in more than two decades on Friday, while the dollar fell as Trump’s trade war caused a loss of appetite for some U.S. assets – and Gold prices hit another record high.

The U.S. Dollar, as measured by the DXY index, has now depreciated 9.2% to 99.9 since the high of 110.0 that it reached just three months ago at the time of President Trump’s inauguration – signalling a crisis of confidence and possible accelerated de-dollarisation. Making a 3 year low against the Euro.

Susan Collins, head of the Boston Fed said The Federal Reserve would absolutely be prepared and ready to help by deploying its firepower to stabilise financial markets should conditions become disorderly.

A better-than-expected Producer Price Index showed that prices paid to producers fell 0.4% in March from the month before and slowed sharply to an annual rate of 2.7%, a snapshot before President Trump’s aggressive trade policies fully kicked in.

Over in Europe…

The U.K. economy unexpectedly grew by 0.5% in February amid a jump in the services output – the British pound jumped against the dollar after the data release, rising 0.6% against the greenback.

Russia and Ukraine’s top diplomats on Saturday used a high-level conference in Turkey to once again trade accusations of violating a tentative U.S. brokered deal to pause strikes on energy infrastructure, underscoring the challenges of negotiating an end to the 3-year-old war.

The European Union has secured “two-thirds” of the money necessary to deliver two million artillery shells to Ukraine, High Representative Kaja Kallas said on Monday, urging countries to ramp up their military support as the United States takes a step back. An estimated €5 billion will be required to meet the target by the end of the year.

And in Asia Pacific…

Beijing increased its tariffs on U.S. imports again to 125% on Friday, hitting back at President Trump’s decision to raise duties on Chinese goods and increasing the stakes in the trade war.

On Saturday, the Trump administration said it would exempt technology products like the iPhone, PCs and chips from much of the recently imposed Chinese tariffs.

But for most businesses in the U.S., orders from China are being canceled and Chinese freight being shipped could be abandoned – which could lead to ‘irreversible damage’.

China’s Commerce Ministry called the U.S. tariff exemptions a “small step” and urged U.S. President Donald Trump to “completely abolish” the reciprocal tariffs, which include a 145% duty on imports from China.

Over in AU, Labor’s latest budget reveals plans to push ahead with their controversial unrealised capital gains tax on superannuation balances over $3 million dubbed an “economy killer” – taking a page out of Kamala Harris’ playbook.

In NZ, the services sector is struggling to gain traction and is weighing on the pace of economic recovery according to BNZ Performance of Services Index (PSI) which edged fractionally higher in March to 49.1, after falling back into contraction in February – a reading below 50 shows activity is slowing in the sector.

And the ‘tentative recovery’ in retail spending stalled again last month – after dipping in January, retail spending had risen again slightly in February – washed away with a 0.8% seasonally adjusted decline in spending in March.

Annual net migration for the February 2025 year showed a more modest gain of 32,900, comprising a net gain of 77,000 non-New Zealand citizens and a net migration loss of 44,100 New Zealand citizens, down -71% from prior year.

That’s a wrap for this week!

Please note, there will be no Weekly Market Update next week due to the shortened week in New Zealand. Our next edition will be published on Wednesday, 30 April.

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