Global Economic Divorce: A Stress Test for Sovereign Stability

André Dragosch, PhD Director, Head of Research — Europe

Ayush Tripathi Research Analyst

Übersicht

Chart of the Week
Performance
Sentiment
Fund Flows
On-Chain
Futures, Options & Perpetuals
Bottom Line
Appendix

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Last week, Bitcoin rallied its weekly low of ~$75K to ~$85K alongside equities, but the move appears driven more by short covering than structural strength. Treasury market stress—triggered by steep yield spikes—forced the administration to delay tariff hikes above 10%. Macro fragility remains the dominant theme.
Sentiment remains bearish but is stabilizing. Our Cryptoasset Sentiment Index rose from -0.84 to -0.10, while the Crypto Fear & Greed Index shifted slightly higher. Despite improving altcoin performance, correlations remain tight, and risk appetite appears constrained amid macro uncertainty.
A rare divergence between rising Treasury yields and a falling U.S. dollar suggests the market’s traditional safe havens are sending conflicting messages (Chart-of-the-week)—highlighting Bitcoin’s appeal as a sovereign-free asset amid mounting policy fragility.

Chart of the Week

Performance

Last week, markets staged a sharp relief rally as Bitcoin rebounded from $75K to nearly $85K in tandem with equities. But sentiment remains fragile, and most of the price action appears to have been short covering rather than a reflection of structural strength.

After initially announcing broad tariffs including a 145% rate on Chinese imports, the administration abruptly delayed implementation of rates above 10% for 90 days. This policy reversal likely came in direct response to extraordinary volatility in the U.S. Treasury market. The yield on the 10-year Treasury surged from 3.92% to 4.33% between April 7 and 8, marking its steepest weekly rise since 2001. The 30-year yield spiked as well, registering its most violent move since the 1980s.

With the 10-year Treasury long considered the "safest asset in the world," the magnitude of the move sent a clear signal: the bond market could break, and that broke the administration's resolve.

It is likely that Treasury Secretary Scott Bessent played a key role in convincing the President to delay implementation-amid concerns that further pressure on long-end yields, particularly the 30-year approaching 5%, could destabilize the bond market further and trigger broader deleveraging.

While the inflationary impulse from these tariffs is real, the larger economic risk lies in investment paralysis. Businesses are holding back on capex. Foreign manufacturers that might otherwise nearshore U.S. operations are delaying decisions. And the fragility in the bond market has revealed that the Trump administration's ability to absorb macro stress has clear limits.

To make matters worse, China has officially halted shipments of several rare earth minerals to the U.S.-a retaliatory move that not only threatens key sectors like semiconductors and defence but also reinforces global supply chain fragility. The administration's attempt to clarify its position last Friday failed to calm markets. Despite headlines implying exemptions, Trump clarified that no real exception was granted-affected goods were simply moved into a different tariff category. If the move was meant to soothe bond markets, it backfired.

Treasury market volatility remains elevated, and uncertainty is starting to hit its highest level since March 2020. A rare divergence between rising Treasury yields and a falling U.S. dollar suggests the market's traditional safe havens are sending conflicting messages (Chart-of-the-week) -highlighting Bitcoin's appeal as a sovereign-free asset amid mounting policy fragility.

Yields remain elevated, and further volatility will likely force additional attempts at stabilization.

Bitcoin, like the rest of crypto, continues to behave more like a high-beta tech stock than a hard-money hedge. Over the past year, BTC is up 29.99% in USD terms, compared to just 5.28% for the Nasdaq-underscoring its asymmetric potential. Yet, it remains tightly correlated to broader liquidity cycles. Gold has hit all-time highs, while Bitcoin lagged. This divergence reflects Bitcoin's evolving identity: not quite a full risk-off asset but is increasingly viewed by long-term allocators as a structural hedge against sovereign dysfunction.

Those treating BTC as a short-term risk asset may be handing it off to those accumulating it as a long-term escape valve. Resilience around the $80K level suggests that larger participants are defending key levels as monetary policy remains boxed in. Supporting this trend, over 63.4% of Bitcoin supply remains unmoved for at least a year-underscoring strong conviction among long-term holders.

So, it's clear that the macro landscape remains uncertain. Liquidity is tight-but inflation is softening (Truflation at 1.49%), growth is stalling (Atlanta Fed GDP tracking at -2.4% in Q1) and the U.S. Treasury faces a $4.5 trillion funding gap through the year-end. These pressures will likely force policymakers back into accommodation mode. When liquidity returns, Bitcoin historically outperforms every risk-on asset.

Furthermore, the global move toward monetary control is accelerating. Tanzania has banned foreign currency usage for local commerce, criminalizing alternatives to the domestic shilling. In China, the e-CNY CBDC is being incorporated into financial sector guidelines, foreshadowing deeper integration of programmable surveillance into everyday finance. These are not isolated cases-they're case studies in state-level erosion of monetary freedom.

Bitcoin's importance in this context cannot be overstated. It is censorship-resistant, globally accessible, and independent of any central bank. In regimes where financial control is weaponized, Bitcoin offers an opt-out.

At the same time, the crypto regulatory environment is rapidly evolving. The IRS DeFi broker rule, which would have required decentralized protocols to report user-level transaction data, was officially overturned by a joint Congressional resolution signed by President Trump. This marked a major win for DeFi privacy advocates. Meanwhile, the SEC issued interim guidance outlining new disclosure requirements for token issuers, signalling a transitional period as the agency works toward a more comprehensive regulatory framework.

Institutional activity is also advancing. Galaxy Digital is moving forward with its NASDAQ listing despite broader market volatility, even as Circle and eToro delay IPOs. Ripple made headlines with its $25 billion acquisition of prime brokerage firm Hidden Road, integrating it with XRPL settlement infrastructure.

All in all, Bitcoin may not be leading in early innings, but when liquidity returns, it remains the most convex bet on monetary debasement.

In general, among the top 10 crypto assets Solana, Chainlink and Cardano were the relative outperformers.

Overall, altcoin outperformance vis-à-vis Bitcoin improved from last week, with 60% of our tracked altcoins managing to outperform Bitcoin on a weekly basis. However, Ethereum underperformed Bitcoin last week.

Sentiment

Our in-house “Cryptoasset Sentiment Index” has continued to signal a slightly bearish sentiment.

At the moment, 5 out of 15 indicators are above their short-term trend.

The Bitcoin Exchange inflows and BTC STH-SOPR metrics have been observed to improve from last week and we are seeing an improvement in our Cryptoasset Sentiment Index which went from -0.84 on April 7th to -0.10 at time of writing.

The Crypto Fear & Greed Index currently signals an “Fear” level of sentiment as of this morning, improving slightly from last week.

Performance dispersion among cryptoassets remains at very low levels, signalling that altcoins have continued to be highly correlated with the performance of Bitcoin lately.

Altcoin outperformance vis-à-vis Bitcoin has sustained from last week, with around 60% of our tracked altcoins managing to outperform Bitcoin on a weekly basis. Ethereum, however, managed to underperform Bitcoin last week.

In general, increasing (decreasing) altcoin outperformance tends to be a sign of increasing (decreasing) risk appetite within cryptoasset markets and the latest altcoin underperformance signals a bearish risk appetite at the moment.

Sentiment in traditional financial markets as measured by our in-house measure of Cross Asset Risk Appetite (CARA) has improved slightly while remaining at low levels, moving from -1.19 to -0.73. The drop is in line with the general risk-off sentiment due to further trade uncertainty, as analysed in our performance section of this report.

Fund Flows

Weekly fund flows into global crypto ETPs have declined last week, likely as a result of the prevailing market uncertainty and risk-off posture by institutions.

Global crypto ETPs saw around -835.5 mn USD in weekly net outflows across all types of cryptoassets, after +35.8 mn USD in net inflows the previous week.

Global Bitcoin ETPs have experienced net outflows totalling -808.2 mn USD last week, of which -715.0 mn USD in net outflows were related to US spot Bitcoin ETFs.

The Bitwise Bitcoin ETF (BITB) in the US experienced minor net outflows, totalling -38.1 mn USD last week.

In Europe, the Bitwise Physical Bitcoin ETP (BTCE) also experienced minor net outflows equivalent to -5.5 mn USD, while the Bitwise Core Bitcoin ETP (BTC1) managed to attract capital of around +0.3 mn USD.

The Grayscale Bitcoin Trust (GBTC) saw outflows equivalent to -160.9 mn USD last week. The iShares Bitcoin Trust (IBIT) also experienced net outflows of around -342.6 mn USD last week.

Meanwhile, flows into global Ethereum ETPs remained negative last week, with around -33.5 mn USD in net outflows last week

US Ethereum spot ETFs, also recorded net outflows of around -82.5 mn USD on aggregate. The Grayscale Ethereum Trust (ETHE) followed suit and experienced net outflows of around -28.3 mn USD last week.

The Bitwise Ethereum ETF (ETHW) in the US experienced minor net outflows of around -5.6 mn USD last week.

In Europe, the Bitwise Physical Ethereum ETP (ZETH) saw minor net outflows of -0.1 mn USD while the Bitwise Ethereum Staking ETP (ET32) saw minor net outflows of -3.6 mn USD

Altcoin ETPs ex Ethereum have continued its positive trend last week, with around +0.6 mn USD in global net inflows.

Furthermore, thematic & basket crypto ETPs experienced net inflows of around +5.7 mn USD on aggregate last week. The Bitwise MSCI Digital Assets Select 20 ETP (DA20) had sticky AuM (+/- 0 mn USD).

Global crypto hedge funds have started to increase their market exposure to Bitcoin. The 20-days rolling beta of global crypto hedge funds' performance to Bitcoin increased to around 0.80 per yesterday's close, down from 0.77 the week before.

On-Chain Data

Broadly speaking, Bitcoin's on-chain activity remained subdued throughout last week but has begun to show early signs of improvement since yesterday.

Selling pressure reversed yesterday, as Bitcoin spot exchanges recorded approximately +$0.21 bn in net buying volumes-the first instance of positive net inflows since March 19th.

In terms of Spot Cumulative Volume Delta (CVD), which measures the difference between buying and selling volume, the metric has been negative most of last week, indicating dominance of sell-side pressure. However, the CVD also reversed yesterday, marking its first positive print since March 19th.

It is worth noting that supply dynamics on exchanges tend to provide a slightly clearer explanation of price action.

In terms of supply dynamics, we are observing a similar pattern as above. Whales have removed bitcoins from exchanges on a net basis, indicating an increase in whale buying pressure. More specifically, BTC whales removed a further -34,071 BTC on exchanges last week. Network entities that possess at least 1,000 Bitcoin are referred to as whales.

At the time of writing, only 2.62 million BTC remain on exchanges (13.4% of circulating supply), according to data provided by Glassnode, the lowest level since November 2018.

We also notice that over 63.4% of Bitcoin supply remains unmoved for at least a year-underscoring strong conviction among long-term holders.

That being said, a measure of “apparent demand” for Bitcoin over the past 30 days had been in persistent decline since February 2025, reflecting a slowdown in demand. However, the metric has recently begun to recover, improving toward levels last observed prior to March 22nd.

Short-Term Holder Spent Output Profit Ratio (STH-SOPR)-a refined version of aSOPR designed to reduce noise by excluding outputs held for less than an hour-has historically served as a reliable gauge of capitulation, often marking local bottoms when dipping below 1. On Monday, the STH-SOPR fell to 0.96, its lowest level since March 10th, signalling significant profit-taking or loss realization among recent buyers. The metric has since recovered to 1, potentially confirming that the recent sell-off marked a local bottom. This aligns with observed price behaviour, where Bitcoin has found strong support in the $80,000 range.

Futures, Options & Perpetuals

Last week, BTC futures open interest decreased by around -7.8k BTC while perpetual open interest increased by around +5.9k BTC.

BTC perpetual funding rates remained positive last week, signalling a slightly bullish sentiment among perpetual futures traders.

In general, when the funding rate is positive (negative), long (short) positions periodically pay short (long) positions, which is indicative of bullish (bearish) sentiment.

The BTC 3-months annualised basis increased from around 4.6% p.a last week to around 5.9% p.a. averaged across various futures exchanges. BTC option open interest increased by around +21k BTC. The put-call open interest ratio had experienced a decrease from 0.67 to 0.57.

The 1-month 25-delta skew for BTC continued to drop last week, indicating a modest decrease in demand for put options and a slightly bullish market sentiment.

BTC option implied volatilities fluctuated last week, with 1-month realized volatility ending the week by decreasing by around 3.7%.

At the time of writing, implied volatilities of 1-month ATM Bitcoin options are currently at around 54.97% p.a.

Bottom Line

Last week, Bitcoin rallied its weekly low of ~$75K to ~$85K alongside equities, but the move appears driven more by short covering than structural strength. Treasury market stress—triggered by steep yield spikes—forced the administration to delay tariff hikes above 10%. Macro fragility remains the dominant theme.
Sentiment remains bearish but is stabilizing. Our Cryptoasset Sentiment Index rose from -0.84 to -0.10, while the Crypto Fear & Greed Index shifted slightly higher. Despite improving altcoin performance, correlations remain tight, and risk appetite appears constrained amid macro uncertainty.
A rare divergence between rising Treasury yields and a falling U.S. dollar suggests the market’s traditional safe havens are sending conflicting messages (Chart-of-the-week)—highlighting Bitcoin’s appeal as a sovereign-free asset amid mounting policy fragility.

Appendix

WICHTIGER HINWEIS:

Dieser Artikel stellt weder eine Anlageberatung dar, noch bildet er ein Angebot oder eine Aufforderung zum Kauf von Finanzprodukten. Dieser Artikel dient ausschließlich zu allgemeinen Informationszwecken, und es erfolgt weder ausdrücklich noch implizit eine Zusicherung oder Garantie bezüglich der Fairness, Genauigkeit, Vollständigkeit oder Richtigkeit dieses Artikels oder der darin enthaltenen Meinungen. Es wird davon abgeraten, Vertrauen in die Fairness, Genauigkeit, Vollständigkeit oder Richtigkeit dieses Artikels oder der darin enthaltenen Meinungen zu setzen. Beachten Sie bitte, dass es sich bei diesem Artikel weder um eine Anlageberatung handelt noch um ein Angebot oder eine Aufforderung zum Erwerb von Finanzprodukten oder Kryptowerten.

VOR EINER ANLAGE IN KRYPTO ETP SOLLTEN POTENZIELLE ANLEGER FOLGENDES BEACHTEN:

Potenzielle Anleger sollten eine unabhängige Beratung in Anspruch nehmen und die im Basisprospekt und in den endgültigen Bedingungen für die ETPs enthaltenen relevanten Informationen, insbesondere die darin genannten Risikofaktoren, berücksichtigen. Das investierte Kapital ist risikobehaftet und Verluste bis zur Höhe des investierten Betrags sind möglich. Das Produkt unterliegt einem inhärenten Gegenparteirisiko in Bezug auf den Emittenten der ETPs und kann Verluste bis hin zum Totalverlust erleiden, wenn der Emittent seinen vertraglichen Verpflichtungen nicht nachkommt. Die rechtliche Struktur von ETPs entspricht der einer Schuldverschreibung. ETPs werden wie andere Wer