Weekly review of the events on the crypto markets

The markets are still in the process of digesting the far-reaching customs announcements of the past week.

The crypto markets are still in the process of digesting the far-reaching customs announcements of the past week. In the meantime, USDC issuer Circle has applied for an IPO on the NYSE, and First Digital Trust's FDUSD briefly lost its peg amid bankruptcy concerns.

We take a look at:

* Liberation Day fails to deliver investors from sticky election gains

* USDC market share hits all-time high

* FDUSD drops amid fears of insolvency

* KRW markets implode amid rising political uncertainty

The market has seen strong sell-offs in nearly all asset classes following the introduction of mutual and flat-rate tariffs by US President Trump.

Despite this broad slump in the market, Bitcoin has remained relatively stable and was mostly traded at $82,000. This divergence to stocks saw some market participants assert that Bitcoin is showcasing its value as a hedge against macroeconomic uncertainty.

However, this decoupling was short-lived as Bitcoin dropped by 10% between Sunday and Monday morning.

The wave of optimism after the election seems to have fizzled out as mid-February saw the onset of customs-related uncertainty.

At the beginning of April, the crypto trade volume nearly reached the levels seen before the election. However, last week saw Bitcoin volume remain low at $91 billion and more than 45% below the November 2024 average, which indicates that many retail traders are still standing aside.

Despite the Bitcoin prices dropping over the weekend, the market makers maintained their commitment, as the 1% market depth of BTC increased by 8% to $500 million between 2 and April 6. This is in contrast to the February 3 sell-off, which saw BTC's liquidity drop by 14%. Meanwhile, the liquidity for the ten major altcoins and ETH decreased by 12% or 8%, showcasing a more cautious attitude.

Overall, the derivatives markets are showing weak demand for interest-bearing commitments as investors reassess their outlooks for 2025. The BTC funding rates for perpetual contracts have been steaming on most exchanges since the beginning of the year. The rates on Binance and Okx moved around the zero mark. Although the rates at Bybit fluctuated between positive and negative at the beginning of March, they have stabilized at 0% since then.

When funding rates are high, it’s usually a sign of high leverage in the market, which often precedes a rapid price drop as traders are liquidated from their positions. Recently, however, there has been low leverage in the market. This was evident over the weekend as liquidations remained relatively low. The largest liquidation in the past 24 hours was a BTC long position at OKX valued at over $7 million.

Meanwhile, the outlook on the options markets has dimmed. The volume of Puts versus Calls on Deribit has shifted significantly in the past week. Puts currently make up more than 65% of the volume, which indicates a higher demand for downside protection.

The uncertainty following President Trump’s announcement of raising tariffs has led to increased implied volatility in all short-term expiry dates. The option (ATM IV) for tomorrow’s expiry date on April 8th is currently around 100%.

The expiry date on April 25th is currently showing an ATM IV of 65% and is therefore higher than the longer expiry dates. This has recently been the most popular expiry date with a volume of around USD 10 billion since the beginning of March, of which the majority of the 100k USD-Strike failed, which had a volume of over 1 billion USD.

Since April 1st, the 75K strike with a volume of $260 million has been the most popular for this expiration day in the last six days. This shift in mood among traders is another example of how the recent customs measures of the Trump administration have affected the markets. It also provides a clearer picture of where the demand for protective measures is and how deep (and how long) traders think prices could fall. The 70k and even the 60k USD puts have a high volume. It wouldn't be surprising to see the market gravitate to this strike in view of the ongoing macroeconomic uncertainty.

USDC issuer Circle announced its plans to pursue an IPO on the New York Stock Exchange (NYSE) in April. In the meantime, USDC’s market share has increased and reached a record high of 22% against its main competitor, USDT from Tether last week.

This growth was largely driven by Binance, which in December overtook Bybit as the largest USDC market and now unites 58% of the global USDC volume.

However, Circle’s IPO filing highlighted challenges in its earnings model: While sales rose by 16% to $1.7 billion in the year, profitability (EBITDA)