HTX DeepThink: Tariff Shift and Capital Inflows -- A Brief Window for Crypto Opportunity
SINGAPORE, April 29, 2025 /CNW/ -- HTX DeepThink is dedicated to exploring global macro trends, key economic indicators, and major developments across the crypto industry. In a world where volatility is the norm, HTX DeepThink aims to help readers " Find Order in Chaos."
This week, Bitcoin surged to $95,000 as President Trump signaled a softer stance on tariffs, boosting market sentiment. However, uncertainty around trade negotiations persists. With critical economic data releases on the horizon, early May may offer a brief but significant liquidity window for crypto markets. In this edition of HTX DeepThink, Chloe (@ ChloeTalk1) from HTX Research breaks down the shifting macro landscape and outlines key risks and opportunities for the digital asset space.
Trump's Second 100 Days Agenda: Delivering on Promises, Catching the Next Wave
In his first 100 days, President Trump swiftly implemented several crypto‐friendly measures, including refining the stablecoin regulatory framework and cutting government spending via DOGE. Next, the White House will focus on finalizing trade agreements and advancing a Russia–Ukraine peace effort, while pushing through the "Big, Beautiful" package—featuring large tax cuts, robust border security measures, and regulatory rollbacks—and securing Senate passage of the FIT21 bill to provide a clear framework for U.S. digital‐asset regulation.
Last Week's Market Recap: Decoupling and Key Drivers
Last week, crypto markets initially decoupled from U.S. equities, driven by a weakening dollar, increased crypto allocations from traditional firms and financial institutions, rising on‐chain stablecoin issuance, and continued net inflows into Bitcoin ETFs—pushing Bitcoin up to $88,000. Later, softened rhetoric on tariffs from President Trump and Treasury Secretary Bissenet further boosted sentiment. However, while signals of trade progress were encouraging, actual agreements remain months away, and hard‐line tariff hawks within the administration continue to exert significant influence, posing major uncertainty for the outlook.
Key Data Ahead: Short‐ and Medium‐Term Inflection Points
This week's macro calendar is pivotal.
April 30 @ 12:30 UTC: U.S. Q1 GDP (expected 0.2–0.4%, down from 2.4%) and Core PCE (month-over-month: ~0.1%)
May 2 @ 12:30 UTC: April nonfarm payrolls (estimated 130K vs. 228K prior) and unemployment rate (steady at 4.2%)
If the data shows weakening growth but easing inflation, it will bolster mid-year rate-cut expectations and likely lift risk assets such as Bitcoin and Ethereum in tandem. Conversely, if all metrics exceed forecasts, rate-cut hopes may be delayed or rate-hike fears revived, driving Treasury yields and the dollar higher and weighing on the crypto market in the short term.
In extreme cases:
Negative GDP + job losses → panic sell-off, rebound on easing bets
Hot inflation + stalled growth → stagflation risks emerge
Fed Holds Steady: The "Self‐Preservation" Behind a Technically Valid Rate Cut
As of now, the Fed's reserve balances stand at about $3.3 trillion, overnight reverse repos at $94 billion, and the Treasury General Account remains high—conditions that technically allow for a rate cut. Yet in FY 2024, the Fed paid $226.8 billion in interest on reserves and RRP, while earning only $158.8 billion on Treasuries and MBS, resulting in a $77.5 billion net loss. A 0.3 ppt rate cut would reduce annual portfolio income by roughly $20 billion on $6.7 trillion of assets, widening losses and slashing remittances to the U.S. Treasury. To preserve its financial sustainability and political independence, the Fed has chosen to keep rates unchanged.
Liquidity Window & Summer Risks: Timing the Optimal Entry
If this week's data align with a slowdown, May may offer a brief liquidity window as funds rotate back into crypto. However, once the debt ceiling is raised—likely in June to July—the Treasury will refill its TGA to $50–60 billion via new bond issuance, draining equivalent liquidity from markets. Short‐term rates will rise, and risk assets will come under pressure; historically, Bitcoin and the broader market have fallen about 5%–10% in the weeks following such TGA rebuilds. Investors should therefore capitalize on the early‐May window while hedging for the summer liquidity drain.
Outlook: Stay Disciplined, Follow the Trend
Against a backdrop of intersecting policy catalysts and liquidity shifts, near‐term tactics should focus on key data releases and the May liquidity window, while longer‐term attention centers on FIT21 implementation and continued institutional adoption of BTC and other assets like Solana. The next major uptrend may well arise under these dual tailwinds—seize the opportunity.
*The above content is not an investment advice and does not constitute any offer or solicitation to offer or recommendation of any investment product.
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