Tariffs, Turbulence, and Bitcoin Divergence

Key takeaways for the month

• Tariffs Spark Volatility, Bitcoin Stands Tall: Crypto markets faced renewed volatility in April following Trump’s April 2 tariff announcements, which sharply raised effective import duties from 4.3% to approximately 20.5%. Traditional markets initially reacted negatively, with the S&P 500 and Nasdaq briefly entering bear market territory, while the 10-year Treasury yield rose as inflation concerns mounted. Following a 90-day pause and further escalation with China, markets began to recover as investors reassessed policy developments. Despite elevated macro uncertainty, Bitcoin gained 14.8% and attracted approximately $2.2 billion in ETF inflows, reinforcing its role as a macro hedge and store of value in uncertain times.
• Large-Cap Leadership Continues: The CF Ultra Cap 5 Index led performance, gaining 10.19% and trimming its year-to-date loss to 10.24%. The CF Free-Float Broad Cap Index followed, up 10.10% (YTD -12.72%), while the CF Smart Contract Platforms Index rose 8.40% (YTD -33.77%). The CF Diversified Large Cap Index advanced 7.32% (YTD -22.95%). Sector-specific indicies lagged, with the CF Digital Culture Index rising 7.25% (YTD -49.82%) and the CF DeFi Index edging up just 0.71% (YTD -46.63%). Investors clearly favored large-cap, established tokens over more speculative or niche plays.
• CRV, SNX & STX Outperform: Curve DAO surged 41.9% on the back of expanded crvUSD mint-market approvals. Synthetix followed closely with a 40.4% gain, driven by the launch of V3 pools enabling new on-chain derivatives liquidity. Stacks added 34.2% amid growing optimism around its high-throughput Nakamoto upgrade. On the downside, Tezos slid 15.4% as sentiment soured and development delays weighed. Uniswap lost 11.2% as regulatory optimism continued to wane. Internet Computer fell 7.5%, pressured by inflation worries and internal governance tensions within the Dfinity community.
• Funds Attract $2.5 Billion as Inflows Resume: April marked the first month of inflows into digital asset funds following a period of sustained redemptions. Investors allocated approximately $2.5 billion, with Bitcoin drawing $2.3 billion and Ethereum seeing a more modest $72 million. Regionally, inflows were concentrated in North America, which brought in a net $2.6 billion, while Europe recorded $116 million in capital inflows. The reversal in fund flows signals renewed institutional interest, especially in Bitcoin, amid shifting macro conditions.
• Bitcoin Futures Sentiment Shifts Amid Lower Open Interest: Net sentiment positioning in Bitcoin turned negative in April, with short positions outnumbering longs. Net futures positioning on the CME dropped to -194 contracts, down from 29 in March. Open interest in CME Ether futures also declined, falling 18% month-over-month, while Bitcoin futures open interest slipped by 2.9%.
• Hash Rate Rises Sharply, Putting Pressure on Miners: Bitcoin’s average monthly hash rate jumped 11.1% in April to reach 710 exahashes per second. Mining difficulty increased by 8.3% over the same period, reflecting the network’s adjustment to elevated hash power. However, the next difficulty adjustment, expected in the first week of May, is currently trending toward a 5.7% decrease.
• Ethereum and Solana Fees Drop on Lower On-Chain Activity: Ethereum network fees dropped by 36.6% in April to $14.8 million, as the average fee per interaction fell 30.2%. This points to a decline not only in cost per transaction but also in overall activity. Solana experienced a 17.8% decrease in total fees, reaching $21.0 million. MEV accounted for 21.9% of Solana’s fees, suggesting lower block space demand and subdued speculative activity on-chain.

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