Weekly Market Update: Wild Swings & Market Mayhem

The past week in global macro and crypto markets has been another wild ride, to put it mildly!

After a strong Nvidia earnings report mid last week, the market was breathing a sigh of relief and there was hope that a deal may be struck to avoid the Trump tariffs. But that was short lived, as the plot twist unfolded: prices didn’t just dip – they plunged, staged a recovery and then plunged again – with no clear direction in sight.

Bitcoin kicked off the chaos, shedding chunks of its value in a flash crash below $80,000, while Ethereum, Solana and other Alts followed and accelerated the decline.

Trump’s tariff threats aimed at Mexico, Canada and China didn’t exactly soothe nerves. Trade war fears rippled through the markets, nudging stocks lower and leaving risk assets like crypto to fend for themselves.

X posts captured the mood with dramatic flair: “sea of red,” “BTC nuked,” “ETH wrecked”, “It’s been a pleasure trading with you” – you get the picture. The swings weren’t just noise; they were fueled by a mix of overleveraged bets and jittery traders.

And then came Monday morning…

Crypto traders across the country woke up to news of the US crypto strategic reserve. Bleary-eyed, sipping coffee that hadn’t yet kicked in, Bitcoin’s up +10%, XRP’s spiking +34%, and the portfolio’s doing somersaults – yet somehow, still wondering if this is genius or just the latest episode of “The Trump Show.”

At the time of writing the dust still hasn’t settled, leaving markets in a state of dazed uncertainty as tariffs are confirmed for Mexico and Canada. The sell off starts again, this time led by the S&P erasing $1.5 trillion in market cap in a matter of hours. 

We’re all going to need to see the chiropractor for the whiplash in pricing action this week! It’s a stark reminder that in this world, stability is fleeting, and the only constant is the next surprise.

What happens next – quite frankly it’s hard to keep this newsletter up to date as the markets swing wildly by the day and hour. At this point in time, we’ve just come to expect the unexpected!

On a positive note, the crypto world got a break: the SEC’s easing up. After years of playing hardball, the agency’s dropping lawsuits left and right – quietly backing off like it’s tired of the fight.

Market sentiment plunged, then recovered and then plunged again: Extreme Fear.

Highlights this week: 

• In a week of wild swings & market mayhem we saw Bitcoin break down below $80k on continued negative economic sentiment – followed by a face melting rebound to over $95k after the US crypto strategic reserve announcement – and then another massive sell off back to $85k on confirmation of the Mexico and Canada tariffs going ahead
• Key momentum indicators also swung wildly with the Fear and Greed index plummeting as low as 10 with record ETF outflows
• After a ‘week of two halves’ the price action is similar, with roughly half of the top 100 cryptos in the green for the last 7 days
• BTC wasn’t spared the volatility, trading in a range of $78k to $95k and now at the mid point at $86k at time of writing
• Notably, BTC printed its biggest daily candle ever (first time +$10,000 in one day) up and then retraced all the way back down!
• In a surprise turnaround to its price action as of late, ADA came out on top this week after the announcement of its inclusion in the US crypto strategic reserve, up +23.3%
• Other top performers include HBAR +25.9% and COTI +18.6%
• Just as ETH was starting to stabilise after last week’s ByBit hack news, it took the elevator down in this week’s sell off to finish in last position, down -14.8%

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

Highlights from the crypto space

Since the start of the Trump administration on 20 January, the crypto markets had erased more than $1 trillion until a surprise announcement on Truth Social sparked a furious rebound.

On Sunday, President Trump confirmed that the Working Group on Digital Assets has been directed to ‘move forward’ with a crypto strategic reserve including Bitcoin, Ethereum, XRP, Solana, Cardano and possibly more to be added.

Some crypto experts are not a fan of President Trump’s idea of a crypto reserve. Gemini Founder, Cameron Winklevoss, said:

“Bitcoin is the only asset that meets the bar for a store of value reserve asset… maybe Ethereum could qualify besides digital oil and digital gold, but overall it’s a very high bar for other crypto assets that have been included in the reserve list.”

Standard Chartered Bank said that the Bitcoin Strategic reserve play puts $500k BTC back on  the table. 

Rumours are circulating as the White House prepares to host its first Crypto Summit on Friday 7 March – will there be more news on the crypto strategic reserve, crypto capital gains taxes and/or possible new crypto legislation?

Perfectly aligned with President Trump’s announcement of the Crypto Reserve, a whale went 50x long on BTC and ETH, using just $4M to create a $200M position closing out most of these trades with over $6.8M in a day. If crypto had dipped even a tiny bit, he would have been liquidated! Coincidence, or something more?

Hacked crypto exchange, ByBit, has now repaid Bitget’s 40,000 ETH loan and stabilised liquidity.  In their attempt to trace the stolen funds they have offered a $140M bounty!

The ByBit Bounty page says that every time someone traces and freezes some of the stolen funds, 5% of that amount goes to the person who found them and 5% goes to the “entity” that froze said funds.

The SEC is closing its investigation into OpenSea, Gemini, Consensys and Metamask. The decision is seen as positive for the cryptocurrency industry and comes shortly after the SEC moved to end its lawsuits against Coinbase and Uniswap. Could the long awaited Ripple XRP case be next?

The SEC has also confirmed that memecoins are “collectibles” and don’t fall under securities laws, which means that they don’t have to be registered with the regulator. Any fraudulent tokens could still be subject to enforcement actions by other regulators.

Lawmakers have been ‘getting cracking’ on crypto legislation with hopes that bills can be signed by President Trump before the end of this year. Senator Lummis said: “we’re on the precipice of finally creating a bipartisan legislative framework for both stablecoins and market structure.”

In other crypto news…

• Michael Saylor buys more Bitcoin adding to the company’s stash now valued at $33 billion, as it now holds more than 499,000 BTC.

• Bank of America CEO said they are preparing to launch their own USD-pegged crypto stablecoin.

• The Ethereum Foundation announced a new leadership structure, welcoming Hsiao-Wei Wang and Tomasz Stańczak as co-Executive Directors effective March 17th.

• Former Binance CEO CZ believes crypto wallets should be used for daily transactions, while exchanges should serve only professional traders and liquidity providers.

• Uniswap has added its first native fiat off-ramps, according to an announcement on Thursday. The new tool will be powered by integrations with MoonPay, Robinhood and Transak.

• To fight against scams, Sen. Dick Durbin announced legislation that would institute sweeping new regulations for the nation’s crypto ATM industry.

Struggling with crypto taxes in New Zealand? We’ve got you covered! Check out our tax guide to simplify the process, and as a bonus, new Koinly users get 20% off their crypto tax reporting.

🌎 Macro news TLDR: …Fireworks and Threats!

It was the President Trump show again this week dominating the headlines and fueling more market mayhem.

Fireworks erupted in the White House over the weekend as he traded blows with President Zelensky over the Ukraine critical minerals ‘peace deal’. Which then sent the EU into full panic mode on the back of renewed tariff threats.

The rest of the world is both trying to make sense of it all and trying to keep its head down… to not become the next tariff or takeover target!

China however has not capitulated yet, threatening its own batch of tariffs. We’re now bordering on a trade war free-for-all, and the tension’s enough to keep global markets on edge.

The chaos is best summarised by the latest Nvidia earnings report – the world held its breath again and Nvidia somehow managed to beat expectations with Q4 2024 sales growing +78% on AI demand. But the market is ‘not buying the news’ as the stock has taken a sharp dive in the days following as growing recession fears loom. 

U.S. economic news

The US and Ukraine had agreed on the terms of a draft critical minerals deal until a fiery clash in the oval office ended with President Zelensky ‘walking out’.

A path to a peace deal to end the war is now uncertain – and the US State Department has moved to terminate funding for the restoration of the Ukraine energy grid and paused military aid.

A new poll from Harvard CAPS/Harris revealed 7 out of 10 respondents think that government expenditures are filled with waste, fraud, and inefficiency with 69% supporting $1 trillion in spending cuts. It seems the people are behind DOGE.

The US 10-year Treasury yield passed below the 3-month note in trading last week – known as an “inverted yield curve” and an ominous measure that the Federal Reserve considers a near surefire recession signal. The Atlanta Fed also published an updated GDP model predicting -1.5% growth in Q1.

US House Republicans got a narrow approval (217-215) to advance the $4.5 trillion tax-cut and border security plan. Will this be too little, too late?

Oh, and the US is on track for a government shutdown at the end of next week. You won’t be surprised to hear that the Democrats and Republicans can’t seem to agree on the way forward. 

Cracks are starting to grow as U.S. consumer spending fell for the first time in two years in January, and US Credit Card debt hit a record $1.2 trillion in Q4 2024, rising +7% over the last year.

Over in Europe….

President Trump vowed to slap 25% tariffs on the EU claiming that the 27 country bloc was ‘formed to screw the United States’. These tariffs are expected to be generally applied with more details coming soon… 

The European Central Bank (ECB) is set to reduce its interest rate further this week due to economic concerns. With CPI still declining, they probably have room to move . 

British Prime Minister Keir Starmer told leaders gathered for a summit on the war in Ukraine that they need to step up in a ‘coalition of the willing’ and continue to support Kyiv – saying that he is ready to put “boots on the ground” to support a peace deal. 

Starmer also announced a loan of 2.2 billion British pounds ($2.8 billion) to support Ukraine, funded through the freezing of Russian assets.

He highlighted a new deal that would allow Ukraine to use 1.6 billion pounds ($2 billion) in export finance to buy missiles made in Northern Ireland.

Deutsche Telekom CEO, Tim H, made an impassioned plea for deregulation saying “what Europe needs is a DOGE’.

And in Asia Pacific…

President Trump dashed any hopes of a last minute deal as he confirmed that tariffs on Mexico and Canada will go into effect on Tuesday 4 March – and then went on to threaten China with an additional 10% tariff.

China has vowed to retaliate saying “if the U.S. insists on its own way, China will take all necessary countermeasures to defend its legitimate rights and interests.”

Australia’s monthly CPI inflation steadies at 2.5% YoY in January vs. 2.6% expected. President Albanese is set to call the general election in April.

Over in NZ, the latest ANZ Business Outlook survey claims the ‘recession is over’ as the economy returned to growth in the last quarter of 2024 and “remains on the path to recovery” whilst “businesses remain hopeful that lower interest rates will help to revive the economy in the year ahead”.

Stats NZ January employment indicators showed all industries up +0.3% compared to the prior month – which is a good leading indicator of a continued turnaround in the labour market.

The housing market is still in the ‘turnaround’ phase, as NZ home buyers were spoiled for choice in February with stock for sale up +13.6% and average asking prices down -4.6% year-on-year. This as mortgage arrears reached an 8 year high.

That’s a wrap for this week!

Stay tuned for the next update

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