This report is for professional investors and information purposes only. Persons without professional investment experience should not rely on it. Not investment advice or a personal recommendation. Cryptoassets are high risk and volatile and you may lose all capital invested. See full risk information at the end of this document.
- Performance: Cryptoassets delivered positive returns last week, broadly in line with US equities and gold, supported by a temporary US-Iran ceasefire. However, markets remain highly headline-driven, with renewed escalation risks (e.g. maritime blockade) continuing to inject volatility.
- Cryptoasset Sentiment Index: The Cryptoasset Sentiment Index increased only marginally and continues to signal neutral positioning, reflecting a balance between improving risk appetite and persistent macro/geopolitical uncertainty.
- Chart-of-the-week: The model-based ‘quantum discount’* for Bitcoin relative to Bitcoin Cash has narrowed to around -10%, indicating that markets currently assign only limited quantum risk. While recent progress in quantum resilience is supportive, unresolved vulnerabilities (e.g. ~4.5 million BTC potentially exposed) remain a longer-term tail risk.
Chart of the Week
*Model assumes that the relative performance between BTC and BCH since Oct 25 fully reflects a quantum discount and disregards other factors for simplicity.
Performance
Last week, cryptoassets performed positively alongside US equities and gold. One of the key macro catalysts was the temporary agreement on a ceasefire between the US and Iran that has supported a recovery in cross asset risk appetite.
The latest maritime ship tracking data provided by Bloomberg also show that commercial vessel crossings in the Strait of Hormuz have increased to the highest level since the 1st of March – essentially since the US-Iran escalation started.
That being said, both traditional financial markets and cryptoassets continue to be very headline-driven due to the ongoing dispute between the US and Iran. The latest developments point towards a renewed escalation of tensions as the US just recently announced to implement a maritime blockade of Iranian vessels.
However, a more idiosyncratic performance driver for bitcoin and cryptoassets was the release of a new proposal to make bitcoin holdings quantum-resistant.
The key highlight of the proposal is that, if adopted, quantum-resistant transaction authorisation for Bitcoin could be implemented without modifying the protocol, and would be compatible with the current system.
In the existing design, transactions are authorized using digital signatures derived from private keys. These signatures could, in the future, be compromised by quantum computers capable of forging them.
The alternative approach replaces signatures with a hash-based method. Instead of signing a transaction, the user searches for a public key whose hash output coincidentally matches the format of a valid signature. Because this outcome is extremely unlikely (roughly 1 in tens of trillions), it requires significant computational effort, typically using GPUs to test many possibilities.
This new method has important limitations. Each transaction is computationally expensive (around $150) and must be sent directly to miners rather than through the normal network.
As a result, this latest proposal is not practical for everyday use, but could function as an emergency workaround if quantum threats emerge before cryptographic upgrades such as BIP-360 are implemented.
As a result of this and other quantum breakthroughs, bitcoin's hypothetical ‘quantum discount' relative to bitcoin cash (BCH) has been narrowing since February 2026 already and only amounts to approximately -10% based on this model (chart-of-the-week). In other words, based on this model, crypto markets only assign a relatively small quantum risk to bitcoin (BTC). Please note that this model carries significant methodological uncertainty; readers should not rely on it as a definitive or comprehensive measure of quantum risk.
Please note that the Quantum discount derived from BTC/BCH relative performance since October 2025. BCH shares Bitcoin's cryptographic vulnerabilities; other factors – including liquidity differentials, market sentiment, and narrative dynamics – affecting relative performance are excluded for simplicity.
That said, as outlined in one of our Crypto Market Espresso reports, approximately ~4.5 million BTC that are probably lost (including the Satoshi holdings) are still potentially vulnerable to quantum computing. The very latest proposal still does not address the vulnerability where control over these coins has been lost. This continues to be a (tail-) risk for the market over the long term if left unaddressed.
Nonetheless, the progress in quantum security may, if sustained, continue to act as a supportive factor for bitcoin and other cryptoassets over the near term. This development may be viewed as broadly positive for the market as most major cryptoassets are theoretically exposed to the same quantum risks as major blockchains such as Bitcoin or Ethereum use elliptic curve digital signatures that are theoretically vulnerable to quantum computing.
On the macro side, we have seen a rather lacklustre US CPI inflation data release for March despite the recent rise in energy prices. More specifically, CPI inflation rate at 3.3% year-over-year came in below consensus expectations of 3.4% in March even though the gasoline price subcomponent experienced its largest month-over-month increase on record.
Contrarian forces are currently at play within US consumer prices – while headline components such as food and energy are accelerating strongly, major core inflation components such as shelter are still experiencing disinflation which is somewhat offsetting the price pressure in headline components.
What is more is that the latest University of Michigan consumer survey has shown a significant increase in consumer inflation expectations. More specifically, 1-year consumer inflation expectations increased to 4.8%, mimicking the steep rise in market-based inflation expectations (CPI swaps and break-even rates) as well.
As financial markets are forward-looking, in our analytical framework, expectations-based metrics may carry greater forward-looking relevance than past headline data releases, and these metrics suggest an elevated risk for inflation expectations becoming ‘unanchored' relative to the Fed's 2% inflation target.
In general, among the top 10 crypto assets Hyperliquid, Ethereum, and Bitcoin were the relative outperformers. Ethereum also outperformed bitcoin.
Sentiment
Our in-house “Cryptoasset Sentiment Index” increased only marginally and continues to signal neutral positioning, reflecting a balance between improving risk appetite and persistent macro/geopolitical uncertainty.
At the moment, 8 out of 15 indicators are above their short-term trend.
Last week, the BTC Exchange Inflows, BTC STH SOPR, BTC STH NUPL, BTC 1m IV, Crypto Dispersion, Crypto ETP Fund Flows, BTC 1M 25 Delta Skew, and Cross Asset Risk Appetite showed positive momentum.
The Crypto Fear & Greed Index continues to signal an “extreme fear” level of sentiment as of this morning, broadly staying depressed week-over-week.
Performance dispersion among cryptoassets slightly declined last week to 0.31. This suggests crypto's outperformance was led by blue-chip assets, suggesting the longer tail altcoin momentum, especially in the AI sector, faded last week. This is also in line with declining altcoin outperformance, and unstable and depressed crypto sentiment.
When dispersion decreases, it may indicate that the market appears to be driven by a less diverse set of narratives which, in our analysis, has historically been associated with periods of decreasing risk appetite in prior market cycles.
Altcoin outperformance vis-à-vis Bitcoin declined 10%-points last week, with 20% of our tracked altcoins in the index, including Ethereum, outperforming.
Sentiment in traditional financial markets as measured by our in-house measure of Cross Asset Risk Appetite (CARA) increased significantly to 0.57 over the past week, signalling a more optimistic outlook in traditional financial markets. This coincides with Bitcoin and Ethereum's outperformance as investors increase their bias toward riskier assets.
CME Bitcoin Commercials Net Positioning, which shows the difference between long and short CME Bitcoin futures contracts declined from –8.49 to –9.72 suggesting short positioning continues to intensify week-over-week. However, at these levels, this could be considered a crowded trade, with any reversal potentially contributing to increased volatility.
Fund Flows
Global crypto ETPs saw net inflows last week across all Bitcoin, Ethereum, altcoins Ex Ethereum products, and basket and thematic products.
Global crypto ETPs saw around +932.6 mn USD in weekly net inflows across most types of cryptoassets, after –128.6 mn USD in net outflows the previous week.
Global Bitcoin ETPs have experienced net inflows totalling +803.3 mn USD last week, of which +771.4 mn USD in net inflows were related to US spot Bitcoin ETFs.
The Bitwise Bitcoin ETF (BITB) in the US experienced net inflows, totalling +25 mn USD last week.
In Europe, the Bitwise Physical Bitcoin ETP (BTCE) experienced net outflows equivalent to –2.1 mn USD, whereas the Bitwise Core Bitcoin ETP (BTC1) experienced net inflows of +1.9 mn USD.
The Grayscale Bitcoin Trust (GBTC) posted net outflows of –53 mn USD and the iShares Bitcoin Trust (IBIT) experienced net inflows of around +612.1 mn USD last week.
Meanwhile, global Ethereum ETPs also experienced +124.7 mn USD in net inflows last week, of which US spot Ethereum ETFs recorded net inflows of around +121.1 mn USD on aggregate.
The Grayscale Ethereum Trust (ETHE) posted net outflows of -4.2 mn USD, whereas the iShares Ethereum Trust (ETHA) that experienced +168.4 mn USD of net inflows.
The Bitwise Ethereum ETF (ETHW) in the US has posted no net in/outflows of +/- 0.0 mn USD.
In Europe, the Bitwise Physical Ethereum ETP (ZETH) experienced net outflows last week of -0.2 mn USD, as the Bitwise Ethereum Staking ETP (ET32) saw +6.7 mn USD of net inflows.
Altcoin ETPs ex Ethereum experienced net inflows of +1.8 mn USD last week.
Thematic & basket crypto ETPs posted net inflows of +2.8 mn USD on aggregate last week. The Bitwise MSCI Digital Assets Select 20 ETP (DA20) experienced no net in/outflows of +/- 0.0 mn.
On-Chain Data
Supported by improving on-chain conditions, Bitcoin closed the week higher at $73.8k. Price action remained contained within a relatively narrow $65k–$75k range, underscoring the ongoing lack of directional conviction.
The US-Iran conflict continues to introduce uncertainty into markets, maintaining a high sensitivity to geopolitical developments. However, recent news flow appears to be progressively absorbed, suggesting that more significant catalysts may be needed to drive larger price dislocations.
Exchange Spot Volume Delta continued to trend higher, reaching approximately +$447mn on a weekly basis. This is corroborated by a positive Coinbase price premium, pointing to renewed buying interest from US-based participants.
At the same time, aggregate exchange inflows and outflows remain muted at around $2.7bn, indicating that overall market participation is still limited, with sentiment remaining broadly subdued.
Aggregate investor stress remains elevated, with the value of capital held at a loss estimated at approximately $778bn (~72% of Realised Cap). This suggests that a meaningful portion of invested capital is still underwater, consistent with a cautious investor backdrop.
Profit- and loss-taking activity has improved slightly compared to the prior week but remains broadly balanced, with Net Realised Profit/Loss narrowing to around –$140mn, marking the least negative level since late January. As highlighted previously, this reflects a broader reversion toward equilibrium in both price and exchange flows, characteristic of a range-bound and trendless market environment. With activity on both sides remaining subdued, in our view, liquidity appears increasingly constrained - a setup that has, at times, preceded higher volatility, although historical patterns are not determinative.
HODLing continues to represent a dominant behavioural trend, as reflected in the ongoing expansion of Long-Term Holder (LTH) supply, typically associated with more mature investors. LTH balances are currently increasing at a pace of approximately +116k BTC per month.
If sustained, this trend may contribute to a gradual tightening of liquid supply, as coins migrate toward longer-term holders with higher conviction. However, similar accumulation patterns have also been observed during prolonged bear market phases and should not be interpreted as a definitive signal of near-term upside.
Key price levels remain broadly unchanged. The cycle low near $60k continues to serve as a reference point for downside risk, although no level can be considered structurally secure in a volatile environment, while the $80k region defines the upper bound from which the most recent contraction originated. Price has traded within this band since 31 January, reinforcing its role as the prevailing regime. The $70k level continues to act as the central pivot, with price largely oscillating around this threshold.
The Realised Price, representing the market's average cost basis, together with the 200-week moving average, has historically provided a proxy for terminal cycle lows during deep bear markets. These levels are currently positioned at $54.1k and $59.7k, respectively.
Futures, Options & Perpetuals
Over the past week, BTC perpetual futures open interest increased by approximately +22.9k BTC, reversing last week's -14.9k BTC decline, while CME futures open interest rose by +11k BTC. This may suggest increased activity in institutionally oriented venues, though open interest data alone does not confirm the nature or intent of market participants. Aggregate futures liquidations across all assets also moved higher. In total, liquidations reached roughly $2.25bn over the week, versus $1.87bn previously, with long liquidations of $864mm and short liquidations of $1.39bn.
On the back of more constructive geopolitical news, BTC has tapped and moved through the liquidity pocket around $71k. Positioning is now rebuilding in the $71k to $74k range, where a sizeable pocket of liquidity has formed. On the upside, $75k stands out as the next notable liquidity zone. On the downside, there is a meaningful pocket near $70k, which could attract price if momentum begins to fade.
Perpetual funding rates, measured on a 7-day moving average, initially moved higher alongside price but faded back by the end of the week, remaining subdued overall. That suggests the rally was not accompanied by a sustained build in aggressive long positioning, and that futures sentiment remained more cautious than spot price action alone might imply.
At the same time, the BTC 3-month annualised basis ticked down to around 1.86%. That leaves basis even further below prevailing short-term US Treasury bill yields, suggesting the futures curve is still not pricing in a strong near-term bullish impulse and that demand for directional long exposure remains muted.
In options markets, BTC options open interest declined modestly by roughly -19.9k BTC, bringing total open interest down to 384.2k BTC. The Deribit put-to-call open interest ratio decreased slightly to 0.68, while the equivalent metric across IBIT options also moved lower to 0.68 by week's end.
Taken together, these moves suggest downside protection demand has eased modestly at the margin, though not enough to signal a broad shift toward outright bullish positioning. The decline in options open interest appears more consistent with a light reduction in exposure than with a strong change in conviction.
The 25-delta skew also moved slightly lower across the term structure during the week. This suggests the premium for downside protection softened somewhat, in line with the modest easing in put-to-call ratios. With the move visible across tenors, the signal is one of slightly less defensive positioning rather than a sharp change in short-dated hedging demand.
Total GEX, on a 7-day moving average basis, increased modestly from $2.2bn to $2.5bn after last week's sharp decline. This suggests dealer positioning remains relatively light, though somewhat less so than a week ago. In practical terms, hedging flows may still amplify market moves, but the setup looks less intense than during periods when GEX was materially higher.
Dealer gamma exposure also remains predominantly negative, with the bulk of negative gamma now clustered around the $74k to $75k strikes. This aligns closely with the main upside liquidity zone in futures positioning, reinforcing its importance as an area where price could become more unstable. By contrast, positive gamma is concentrated around $65k to $66k, which may help dampen volatility if BTC trades lower, though that support remains well below current spot levels.
Bottom Line
- Performance: Cryptoassets delivered positive returns last week, broadly in line with US equities and gold, supported by a temporary US-Iran ceasefire. However, markets remain highly headline-driven, with renewed escalation risks (e.g. maritime blockade) continuing to inject volatility.
- Cryptoasset Sentiment Index: The Cryptoasset Sentiment Index increased only marginally and continues to signal neutral positioning, reflecting a balance between improving risk appetite and persistent macro/geopolitical uncertainty.
- Chart-of-the-week: The model-based ‘quantum discount’* for Bitcoin relative to Bitcoin Cash has narrowed to around -10%, indicating that markets currently assign only limited quantum risk. While recent progress in quantum resilience is supportive, unresolved vulnerabilities (e.g. ~4.5 million BTC potentially exposed) remain a longer-term tail risk.
Appendix
Combined positioning = futures and options in % of Ol
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Important Analytical Limitations: The observations and analyses presented in this document are based on historical market patterns and data correlations which may not repeat or continue in future market conditions. Past correlations between capital flows and performance metrics are not indicative of future performance and should not be extrapolated as predictive indicators. Material downside risks remain present across all investment timeframes regardless of current undervaluation metrics or favorable technical indicators. All model outputs, fair value calculations, and quantitative assessments are subject to significant uncertainty and methodological limitations, and should not be relied upon as the sole basis for making investment decisions. Investors should conduct independent due diligence and consider multiple factors beyond the scope of this analysis.
*Quantum discount derived from BTC/BCH relative performance since October 2025. BCH shares Bitcoin's cryptographic vulnerabilities; other factors – including liquidity differentials, market sentiment, and narrative dynamics – affecting relative performance are excluded for simplicity.
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