Macro Update

Last week, Bitcoin rose 1.7% to $85,200, navigating a turbulent macro environment shaped by U.S.-China trade disputes and the Federal Reserve’s cautious stance on tariff-driven inflationary pressures.

Following the escalation in tariffs, which saw the U.S. impose tariffs of up to 145% on Chinese imports and China retaliate with 125% duties, last week saw the fallout deepen into a diplomatic deadlock. China urged the U.S. to abandon its maximum pressure tactics and engage in equal-footed dialogue. At the same time, the White House maintained that “the ball is in China’s court” regarding any path toward resolution. The Trump administration also broadened export controls, including indefinite licensing requirements for exporting NVIDIA's H20 AI chips to mainland China, Hong Kong, and Macao, despite its prior compliance with earlier restrictions. In response, NVIDIA announced a $5.5 billion charge for its fiscal Q1 2026, about 13% of projected Q1 revenue, attributing it to anticipated lost sales and inventory write-downs. The announcement triggered a 7% drop in NVIDIA’s stock and contributed to a 2% decline in the S&P 500, reflecting broader market apprehensions over deepening trade frictions. 

As markets grappled with consistent trade-induced shocks, Federal Reserve Chair Jerome Powell stated that the newly implemented tariffs, which exceed the Fed’s prior upside risk projections, are likely to contribute to higher inflation, slower economic growth, and rising unemployment. He reaffirmed the Fed’s dual mandate of maximum employment and price stability but noted the tariff shock could hinder both, posing a policy challenge. To address this, Powell emphasized limiting tariffs to a one-time price adjustment to maintain stable long-term inflation expectations.​ Powell emphasized that the Fed will remain independent of political influence and will wait for greater clarity before adjusting its policy stance.

In such an environment of macroeconomic uncertainty, heightened bond market volatility (as discussed in the previous edition), and a weakening U.S. dollar, gold has attracted significant capital flows from both institutional and crypto-native investors seeking stability and inflation protection. Reflecting this surge in demand, gold has reached new highs every week in 2025, currently trading at $3,426. Paxos Gold (PAXG), a leading gold-backed token, saw over $1 billion in monthly trading volume since February, peaking at a new high of $1.87 billion in April month-to-date (MTD). This marks a significant increase from the previous peak of $1.13 billion during the March 2023 regional banking crisis.

In contrast, Bitcoin, often dubbed "digital gold," saw a considerable decline in trading activity. Bitcoin spot trading volume on CEXs plummeted 45% from $460 billion in February to $251 billion in April MTD, while futures volume fell 22% from $1.6 trillion to $1.3 trillion, with ETH following a similar trend.

Moreover, Bitcoin performance varies significantly across regions, as evidenced by the distinct BTC cumulative returns by trading session. The Asian session achieves the highest cumulative gain at approximately 10% over the past month, suggesting that investors in this region might be accumulating Bitcoin as a potential safe-haven asset amid economic uncertainty. In contrast, the US session and European sessions record lower returns, around 3% and 5%, respectively. These regional differences in Bitcoin trading behavior mirror broader trends in the crypto market, where trading volumes across assets on CEXs collapsed from $2.9 trillion in December 2024 to $800 billion in April 2025 MTD. In the same period, Asia, the largest market, saw volumes fall from $2 trillion to $500 billion in April (75% decline). North America’s volumes dropped from $526 billion to $112 billion in April (81% decline), possibly driven by post-election drawdowns in speculative narratives and tariff-related uncertainties. Europe, with a much smaller market, saw a relatively smaller decline from $85 billion to $32 billion in April (67% decline), potentially supported by more predictable regulatory frameworks with MiCA live this year.

Despite the broader market drop in activity, Bitcoin treasury company Strategy continued its aggressive acquisition strategy, purchasing an additional 3,459 BTC for $285.8 million at an average price of $82,618 per coin. This acquisition brings Strategy's total holdings to 531,644 BTC, representing over 2.5% of Bitcoin's total supply at an average price of $67,556 per coin.

Our take: Bitcoin’s stability and gold’s surge contrast with the S&P 500’s relative weakness amid trade war escalation, highlighting how tariffs disrupt traditional markets. As tariff uncertainties and Federal Reserve policy shifts resolve, markets may gain clarity, potentially signaling Bitcoin’s next move as investor sentiment recalibrates.

Solana Update

In a move reminiscent of Strategy’s Bitcoin accumulation play, companies are now deploying similar tactics to acquire Solana. Two notable examples are Janover Inc. and Sol Strategies. Janover Inc., recently acquired by former Kraken executives, has completed its third tranche, purchasing 80,567 SOL, bringing its total holdings to 163,651.7 SOL, valued at approximately $21.2 million at an average price of $130. The company plans to operate Solana validators and reinvest staking rewards into further SOL accumulation. Strengthening its foothold, Janover has entered a strategic partnership with Kraken to take over a portion of its current and future SOL delegation. Additionally, Janover raised $42 million via a convertible note and warrant offering targeted at digital asset acquisitions. Meanwhile, Toronto-based Sol Strategies has similarly built a substantial position, holding 189,968 SOL.Against the backdrop of rising sentiment around Solana, driven by fully eased unlock pressures, a 40% price rally from local lows, and increasing corporate accumulation as mentioned above, onchain activity is rebounding sharply. Weekly DEX trading volume has surged 90% over the past month, rising from $8 billion to $15 billion. While volume is steadily growing across platforms, PumpFun’s newly launched DEX, PumpSwap, which launched just last month, has doubled its weekly volume from $1.4 billion to $3 billion, capturing 23% of Solana DEX market share, just behind Raydium’s 24%. PumpSwap’s growth likely benefited from the removal of a previously required 6 SOL migration fee, which now allows for immediate token liquidity post-bonding curve and a more streamlined user experience. The platform also hit record highs last week across daily fees ($1.05 million), trading volume ($420 million), and daily active wallets (264,430).

Amidst the apparent slowdown in aggregate onchain activity since the November-January peak, memecoins remain a dominant force, capturing over 40% of current DEX trading volumes. Fartcoin stands out as the category leader, capturing nearly 9% of the total memecoin mindshare according to Kaito. Despite lacking listings on major centralized exchanges, Fartcoin, a sub-billion market cap token, has consistently posted daily volumes of ~$285 million over the past month. For context, Shiba Inu, the second-largest by market cap at $7 billion, averages $200 million in daily volume. It also leads performance charts over the past 30 days, gaining 109%, eclipsing Curve’s 39% rise and Hyperliquid’s 30% jump as broader markets wobbled through April’s macroeconomic turbulence.

Fueled by this onchain momentum, Solana-based applications are now leading DeFi revenue rankings once again. Jupiter, Pump, and Jito have each generated between $12 million and $18 million in fees over the past week, reestablishing Solana dApps in the DeFi top five by revenue, trailing only Circle and Tether.

Our take: Solana weathered a challenging quarter post-U.S. elections, marked by the Libra controversy and substantial token unlocks. However, institutional accumulation, trading volumes, and dApp revenue growth signal strengthening momentum, pointing to a revitalized ecosystem ready for renewed growth.

Hyperliquid Update

Hyperliquid currently accounts for 68% of the total decentralized perpetuals volume, and its momentum is increasingly evident when benchmarked against major centralized exchanges. Hyperliquid's daily perp trading volume (7-day moving average) has grown significantly compared to incumbent CEXs (see chart below). Similarly, open interest ratios have climbed significantly since the start of the year (from 10% to 14% vs. Binance, from 13% to 21% vs. Bybit, and from 29% to 37% vs. OKX).

The surge in perpetual trading volume share has driven consistent revenue growth for the protocol. In April 2025 MTD, Hyperliquid generated nearly $30 million in revenue, on track to approach the previous month’s $40 million. A significant portion of these earnings is allocated to the Assistance Fund (AF), which has repurchased 20.5 million HYPE tokens at an average price of $11.8, totaling approximately $236 million. The remaining funds are directed to the Hyperliquid Liquidity Provider (HLP) vault, which currently manages $160 million in assets and serves as the platform’s liquidity cornerstone.

Hyperliquid’s spot trading market, though still nascent at just two months old, has gained momentum, recording $2.8 billion in volume in April 2025 MTD, nearing March’s high of $4.1 billion. Currently, BTC and ETH are the only assets available for spot trading, with SOL set to join as the third asset, potentially expanding the platform’s market reach. However, spot trading remains a small fraction of Hyperliquid’s activity, with its volume ratio to perpetuals dropping to 1.2% from a peak of 2.25% in late March. Hyperliquid’s spot market offers low transaction costs- $25 to execute a 1 BTC trade, compared to $82 on Binance, Bybit, or OKX, or $247 on Uniswap or $330 on Coinbase. Spot market is supported by Unit, Hyperliquid’s custom-built on-chain order book system that handles matching and settlement for spot trades directly on-chain. Since launch, Unit has attracted over $100 million in user deposits ($87M in BTC and $22M in ETH). Unlike perpetuals, where fees are split among the AF, HLP vault, and other protocol components, spot trading fees for non-HYPE pairs are fully allocated to the AF, while fees from HYPE-USDC trades directly burn HYPE tokens. To date, 214,000 tokens have been burned, furthering HYPE’s deflationary mechanics.
Hyperliquid’s high-throughput infrastructure, which powers its trading markets, also underpins HyperEVM, an Ethereum-compatible layer supporting smart contract applications. Since its launch in February, HyperEVM has amassed approximately $700 million in total value locked (TVL). Bridged HYPE token volume has surged by 7 million over the past month, bringing the total to 9 million tokens, signaling rising protocol traction and user activity. Key applications driving this growth include Felix Protocol ($128M TVL), which lets users mint feUSD against crypto collateral, and HyperLend ($84M TVL), a native lending platform supporting leveraged yields on HLP assets. Both launched within the past month, signaling notable DeFi adoption on HyperEVM.

Our take: While Hyperliquid's primary source of revenue is the perps protocol currently, it appears to be diversifying through its emerging spot trading and HyperEVM applications. If these protocols gain traction, Hyperliquid can compete in the market as a functioning L1 with dApps that market participants actually use.