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TL;DR: Turmoil… What’s next?

BTC ATM IV

• 1W: 69.58%

• 1M: 57.31%

• 3M: 54.95%

• 6M: 56.32%

• Index Price: $76,650

• DVOL: 58.68

ETH ATM IV

• 1W: 86.60%

• 1M: 72.05%

• 3M: 66.04%

• 6M: 66.64%

• Index Price: $2,009

• DVOL: 73.72

Top Economic Events This Week

Tuesday, March 11, 2025

• US: JOLTS New Job Openings

Wednesday, March 12, 2025

• US: CPI

Key Developments

• White House Crypto Summit produced mixed results

• Trump will create a Bitcoin reserve using only confiscated assets (not purchasing more)

• Bitcoin fell below $80,000, showing volatility and correlation with US markets

• Trump administration committed to advancing stablecoin legislation by August

• Market expected more aggressive pro-crypto measures, causing some disappointment

Macro Economic Context

• US added 151,000 jobs (February), putting pressure on Fed interest rate decisions

• Market projects 55% chance of Fed rate cut in June

• Trump didn't rule out recession in FOX News interview: "There may be some temporary instability"

• China showed deflation (-0.7% CPI) for first time in 13 months

• Crypto maintains strong correlation (0.77) with traditional markets

Notable Adoption

• In Brazil, Méliuz allocated 10% of cash to Bitcoin, boosting shares by 6%

• Brazilian Post Office exploring blockchain implementation

Analysis: Cryptocurrencies as Reserve Assets

• Bitcoin (PoW) is more suitable as national reserve due to decentralization

• PoS networks (Ethereum, Solana, Cardano, XRP) have concentrated ownership:

  • Ethereum: 20% of supply in 100 wallets

  • Solana: 48% of initial supply went to foundation/early investors

  • XRP: Top 20 wallets control over 50% of supply

  • Cardano: 16% of initial supply allocated to founding entities

• Despite centralization concerns, PoS networks drive important innovations

Now that you get all the points above… There isn’t much to say… besides we told you so? Current situation is much worse than I would have expected to be fair. We are moving much faster and much more deep than i would have thought. Where does that leave us? The alpha is free on Mondays, let’s take a look. This one might be a little wordy. Marty got a lot to say… sigh.

WTF is Happening Marty?

Trump's administration faces a significant challenge with Treasury refinancing. The U.S. needs to refinance trillions in federal debt in the coming months, and the current 10-year Treasury yield is around 4.2%. A drop in this rate to 3.5% would save hundreds of billions in interest payments over the debt's lifetime. This situation puts Trump in a position where he likely wants yields to decrease before refinancing, as each percentage point reduction represents massive savings for the federal budget. However, for yields to fall this significantly, we'd likely see a major stock market pullback (which we are in the middle of), as investors typically flee to bonds during economic uncertainty. This creates a dilemma… While lower yields would benefit government refinancing, the economic conditions causing those yields would likely hurt the stock market, which administrations traditionally view as a measure of economic success. The administration essentially faces a trade-off between more favorable refinancing conditions and maintaining a strong equity market… We are in the middle of exactly this as I’m writing.

Reserve vs the Stockpile

I also want to cover the Reserve vs the Stockpile

1. The reserve is just going to be BTC, they cannot sell the BTC, and they could possibly add to it.

2. The stockpile is various coins, it’s managed by the treasury, the treasury has discretion to buy/sell these coins and add various others.

They aren't sure of the actual number of coins because there has never been an audit, but they believe it's around 200,000 BTC and 50,000 ETH, along with various amounts of other altcoins. It would be really bad if this isn’t the case, but Arkham and some others have tracked the wallets, and this seems to be fairly accurate. We wait and see.

One key thing about the reserve being BTC only is that it's something they actually believe in. They could liquidate the stockpile and put it all into BTC if that's how they see fit. Don't rely on your altcoin holdings based on the stockpile's holdings; they will most likely hold all the top coins by market cap, not very strategic there.

David Sacks discussed all of the details in the latest ALL IN Podcast. You can listen there. The main takeaway I got from the podcast was that they will have regulation and guidance very shortly for crypto in the US, which is huge in terms of traders, companies, etc., being or moving to the US to be in the crypto space. The working group really does have a good shot at making the US a big crypto hub. Crypto is innovative, and the US was built on innovation. I've never understood the US government's shunning of crypto. Interesting developments to watch.

As for the US stance on Ukraine and Israel, it’s very interesting to me. US seems to want to help Israel with everything, with the exact opposite on Ukraine. Even to the point where we get this meme above where they are essentially arguing on live TV, it wasn’t a great look. There is also talks about the US trying to pull out of NATO. These are all developing stories and news, but something to pay attention to. EU defense stocks have been ripping due to these news cycles. I hope we see peace across the world and people figure it out.

Wrap-up

As we all know, markets don’t just move in one direction forever. There are rebounds, rips, dips, and more. Markets do not like uncertainty. With the current uncertainty, I'm in the camp that all rips are meant to be sold until we level out and reach equilibrium. Rips can be significant; even today, ETH was up 6% this morning, only to be instantly sold off. Crypto is the last free market; we move the most, and we are the first movers. In the last two weeks, I wrote “a bull market but just for BTC.” I think it's a good read; you can read it HERE. I'm still in this camp: BTC goes up forever against fiat. In what time frame? I'm not sure, but zoom out. I'm not sure I'm in the camp that we see BTC at 30 million+ USD like Saylor is saying. There would have to be hyperinflation for that, and I'm not sure we want to live in a world where BTC is at 30 million+ USD.

As for where the market is going or what to do, I think Fofty said it best: this is a trader's market, not an investor's market. You need to be very agile and not married to your holdings. Stay liquid, stay fluid, my friends.

The crypto space is still growing, and volumes are increasing, even after the most recent hack for 1.5 billion at Bybit. The space is ever-changing, providing us traders opportunities day in and day out. Don’t let the shiny new meme coin grab your attention or make you chase some edge you may think you have. Stick to what you know and evolve from that.

If you must venture into new protocols and tokens, it is probably best to pick winners that are profitable and have revenue. I think we will start to see tokens rise from protocols that meet this criteria.

If you are interested in learning the basics of derivatives, please check out current edition of the academy here academy.premia.blue.

Thank you to all the readers who make this newsletter possible, we are sitting at about 4000+ email sign ups, and thousands of readers every 2 weeks. As for the Options Talk Show if you or someone you know wants to be a guest feel free to DM me, we are booking out April 2025 already! This week we have Block Scholes coming on to spill some options data alpha to our listeners.

Recap:

• US data this week

• Market is in a stance of uncertainty

• Details of the reserve vs stockpile emerged

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