Bitcoin Rockets to $95K as ETFs Pour in Billions—But Retailers Face Empty Shelves by May
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Digital Asset Market: On Monday, BlackRock’s iShares Bitcoin Trust (IBIT) ETF made a notable purchase of nearly $1 billion in Bitcoin, marking its second-largest inflow on record after a $1.12 billion buy in November 2024, as reported by Sosovalue. This surge brought total net inflows to US spot Bitcoin ETFs to just over $590 million that day, even as most other ETFs experienced flat or negative flows, with ARK Invest’s ARKB ETF seeing the largest outflow at $226 million. IBIT, now commanding over $54 billion in assets under management and representing 51% of the spot BTC ETF market, is not only the biggest US spot BTC ETF but has also become the 33rd-largest ETF globally across both crypto and traditional financial products. Market analysts credit these strong ETF inflows—over $3 billion in one week, the highest since their November launch—for providing essential structural support to Bitcoin’s ongoing price rally, which saw it reclaim the $94,000 level despite muted retail investor participation. Experts suggest that ETFs are significantly driving Bitcoin’s upward momentum, as evidenced by past inflows accounting for approximately 75% of new Bitcoin investment when the asset crossed $50,000 in early 2024, and they argue that continued institutional inflows could sustain or further boost prices.
Macro Economics: The International Monetary Fund (IMF) has downgraded its euro area growth forecasts for 2025 and 2026 due to the negative impact of U.S. tariffs, despite a boost from increased German infrastructure spending. According to Alfred Kammer, director of the IMF’s European department, while Germany’s new spending plans—enabled by recent exemptions to its debt rules—will help offset some of the drag, the effect of global trade tensions led by U.S. policy is expected to weigh more heavily on Europe’s outlook. Kammer recommends that the European Central Bank cut interest rates only once more this year, noting that disinflation efforts are on track for the euro zone to reach its 2% inflation target by the second half of 2025, while market expectations currently price in two further rate cuts.
Equities: US stocks were mixed on Tuesday as investors digested a wave of fresh earnings reports and remained focused on US trade policy developments, with the S&P 500 edging just above flat and the Nasdaq slightly lower, while the Dow inched up amid hopes that the Trump administration might ease auto tariffs. Weakness emerged earlier in the session after Treasury Secretary Scott Bessent failed to provide substantive updates on trade negotiations, particularly with China, though he suggested progress with Japan and possibly India. While investors welcomed tentative signs that tariff pressures on automakers could be relaxed, Bessent reinforced the stance that China must act on tariffs, refusing to clarify if talks with Xi Jinping were ongoing. Meanwhile, Amazon’s shares fell 2% after the White House criticized its reported plan to display tariff costs on product listings as “hostile and political.” General Motors also declined despite posting strong earnings, as it suspended buybacks and reconsidered its outlook due to tariff uncertainty, echoing moves by other major companies like American Airlines and Skechers, which withdrew their 2025 guidance citing a murky economic climate. The S&P 500 managed a narrow gain on Monday, notching a five-day win streak. Attention is turning to a crucial earnings week featuring reports from tech leaders such as Meta, Microsoft, Apple, and Amazon. Notably, 73% of S&P 500 companies reporting so far have surpassed estimates—slightly below the five-year average of 77%—underlining a tone of cautious optimism as trade and earnings developments continue to sway Wall Street’s sentiment.
The Fed and US Treasury: Bond yields declined amid weak US economic data—including falling consumer confidence and a drop in job openings—intensified speculation that the Federal Reserve may cut interest rates to stave off recession, although most economists don’t expect a rate cut at the upcoming May policy meeting. Treasuries rallied across the curve, while stock volatility stayed high, with the S&P 500 and Dow posting sharp losses as major companies like General Motors and JetBlue refrained from offering 2025 earnings outlooks amid tariff uncertainties that are weighing on corporate confidence. Amazon also came under fire from the White House for its move to highlight tariff impacts on pricing, illustrating how politicized the tariff debate has become. Amid ballooning trade deficits and signs of consumer fatigue, strategists at HSBC slashed their year-end S&P 500 target, citing mounting earnings pressures from tariffs and weaker US growth. Overall, markets remain jittery as uncertainty around the trade war and the timing of potential Fed rate cuts fuels rapid shifts between fears of recession and stagflation. The Fed, meanwhile, has signaled it will keep monetary policy steady until there’s more clarity on trade and economic trends, meaning investors should not expect imminent relief from rate cuts despite growing angst over the economic outlook.
Geopolitical: Canadian Prime Minister Mark Carney has led the Liberals to a comeback election victory, positioning himself to take on a global leadership role advocating for multilateralism amid rising protectionism from Donald Trump, who recently imposed tariffs and threatened annexation of Canada. Carney, a former head of both the Bank of England and Bank of Canada, is expected to expand trade with Europe, Australia, and Asian democracies, and strengthen Canada's economic independence from the U.S., even as he leads a minority government. Experts say Carney’s international credibility and calm demeanor may help him navigate tense relations with Trump and build coalitions with like-minded nations, though Canada’s underfunded military and economic challenges could limit his global influence. Trump's aggressive policies have stirred voter backlash globally, impacting elections in countries like Australia and the UK, but analysts caution that Carney's win is more a reaction to Trump than a new template for center-left politicians worldwide.
View from our desk
Crypto majors continue to build on their positive momentum, with Bitcoin now trading around the $95,000 mark. This recent strength appears structural, underpinned by strong ETF inflows consistently supporting market sentiment. Notably, the $212 million bitcoin sell order that briefly rattled markets on Binance has not reappeared. While some initially speculated about spoofing, the absence of any recurrence suggests it was more likely the result of a trading error, or perhaps Binance intervened quietly to prevent further market disruptions.
Meanwhile, broader financial markets are bracing for decisions and negotiations around tariffs. Although selective reprieves, particularly in sectors like the auto industry, have offered a degree of relief, uncertainty continues to weigh heavily on economic activity. Shipments from China to the U.S. are projected to fall sharply next week, with volumes at the Port of Los Angeles expected to drop by over 35% year-over-year. This downturn stems from major American retailers scaling back import orders in response to newly announced tariffs by President Trump, adding pressure to an already delicate trade environment.
The steep decline in shipments, exacerbated by widespread cancellations and stalled trade negotiations, could soon ripple through the consumer economy. Retailers are projected to face inventory shortages within five to seven weeks, potentially limiting product availability and driving up prices across a range of goods. By mid-May, the effects of the trade and tariff war are likely to become tangible for the average consumer, as daily-use items become scarcer and sticker prices on retailer shelves climb noticeably.
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The 1Konto Team
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