Weekly Crypto Market Wrap: 3rd March 2025

Zerocap is a market-leading digital asset firm, providing trading, liquidity and custody to forward-thinking institutions and investors globally. To learn more, contact the team at [email protected]

This is not financial advice. As always, do your own research.

Week in Review

• President Donald Trump announced an Executive Order to establish a U.S. Crypto Strategic Reserve, including BTC, ETH, XRP, SOL & ADA
• A crypto whale profited nearly $7 million by placing 50x leverage long positions on Bitcoin and Ether before former President Donald Trump announced a Crypto Strategic Reserve.
• DekaBank launches crypto trading and custody services for institutions, managing €377 billion in assets.
• Citadel Securities interested in entering crypto trading as a liquidity provider for major exchanges.
• Grayscale files for spot Polkadot ETF and Cardano ETF, Nasdaq to list Polkadot ETF.
• ARK Invest buys $8.7M of Coinbase shares, sells a similar amount of ARKB Bitcoin ETF.
• BitMEX, the exchange that popularized perpetual futures, is up for sale with Broadhaven Capital Partners leading the process.
• SEC dismisses lawsuit against Coinbase.

---

Technicals & Macro

BTCUSD

Source: TradingView

Key levels
66,000 / 72,000 / 92,000 / ~110,000 (just north of the all-time high)

Trump brings it on a Sunday, with news that the US will indeed pursue a Strategic Bitcoin reserve, and also include XRP, SOL, ADA, BTC and ETH in the mix. 

BTCUSD surged above 95,000, ripping back into the range. I’m amazed that they decided to do this on a Sunday, at possibly the lowest liquidity moment. I do wonder whether one day the regulators look back on this period with some force. 

Trump posted on Truth Social – “A U.S. Crypto Reserve will elevate this critical industry after years of corrupt attacks by the Biden Administration, which is why my Executive Order on Digital Assets directed the Presidential Working Group to move forward on a Crypto Strategic Reserve that includes XRP, SOL, and ADA,” “I will make sure the U.S. is the Crypto Capital of the World.” A follow-up post then clarified “..and, obviously, BTC and ETH, as other valuable Cryptocurrencies, will be at the heart of the Reserve,” “I also love Bitcoin and Ethereum!”

Analysing language here, Trump had originally come into office changing the narrative to a “Stockpile”, but now is using the word “Reserve” – echoing Senator Cynthia Lummis’ “US Strategic Bitcoin” proposal. This is very telling – her proposal is aggressive, suggesting that the Fed revalues its physical gold stocks to from US $42 to $2,500 per ounce, and use it to buy bitcoin. She’s positioning that the Fed buys 200,000 BTC per year over 5-years which would equate to 5% of the total fully diluted BTC supply. This is some serious s@#$t, and if it were to ever happen, we’d probably see GFC style front-running of the Fed’s bond purchasing program. 

The problem with all of this is that Trump has a growing credibility problem. He’s moving on some issues (sometimes on obscure angles), and is jawboning on others. It’s tough to tell what’s really going on behind the scenes, and the market has been dumping on the uncertainty. 

So where do we go from here? It’ll be volatile, two-sided, but even the mere possibility of this reserve kicking off should keep buoyancy to prices, if not a little mania here and there. I think we will be back on the way to all-time highs over the next month.

Dollar index sees a rebound

We are still seeing two-sided flows here on the back of questions around US hegemony. Honestly, I think the USD is going to move on interest rate shifts, but moreso, on US strength. The Zolensky precious metals deal is a great example of Trump leading an America first crusade – there will be more of this, and could lead to strength in the USD.

Gold poking takes a breather

Have we hit peak? Or more to come? Tough to tell at these levels.

ETHUSD

Given the amount of ETH shorts on CME recently, we could see ETH go higher as the market digests what ETH could look like in the Strategic Reserve.

ETHBTC

ETHBTC – of course, still in the doldrums.

Safe trading out there!

Jon de Wet, CIO

---

Spot Desk

After a few weeks of fleeting relief, the Australian Dollar (AUD) returned to characteristic weakness in last week’s trading session – sliding significantly from its highest open of the year at 0.63918 to close at 0.62034 and effectively fully retrace February’s gains. Desk flows in stablecoin and fiat across USDT/C, AUD, USD, and EUR remained balanced, with off-ramping picking up late in the week in line with volumes across the space as market participants navigated an exceptionally volatile crypto landscape and positioned ahead of key economic events this coming week, headlined by Wednesday’s QoQ GDP growth rate release.

Bitcoin (BTC) saw its most volatile and high-volume week of the year, with U.S.-based spot Bitcoin ETFs recording their first day of net positive inflows on Friday after eight consecutive trading days of net outflows. Over this streak, ETF-held BTC value declined by more than $20 billion due to both outflows and price depreciation, with $IBIT seeing a record $418.1M single-day outflow on Wednesday. Amidst all this, BTC opened the week at 96,258.00, plunged to 78,258.52 – losing a three-month value range – before dramatically recovering over the weekend to close back within the range at 94,270.00.

Majors (BTC/ETH) dominated crypto volumes in both directions as traders sought relative stability amid broader market turbulence, and the desk saw widespread selling in altcoins across several names including XRP, ADA, ETH, HBAR, and FET. Despite the turmoil, altcoins showed resilience in aggregate across the market, with the downbeat OTHERS/BTC ratio resisting making new lows despite the BTC whiplash – signaling relative relief in higher-risk assets and a glimpse of potential exhaustion in the broader market downtrend. We notably saw significant accumulation in Lido (LDO) and Aerodrome (AERO) – two of Ethereum’s flagship DeFi protocols – as sophisticated players took advantage of volatility and the desk’s algorithmic execution to build their positions.

On the flip side, demand for Solana (SOL) remained strong but relatively less interest was observed for its ecosystem and infrastructure tokens compared to recent weeks as volumes and user metrics continue to digest the $TRUMP and $LIBRA fallouts. Paired with an uncharacteristically red week and SOL/BTC hitting its lowest level since December 2023 – the week’s trading reinforced that ecosystem tokens continue to express strong reflexivity to movements in their base asset price, presenting opportunities for traders both ways.

Looking ahead, we expect this morning’s blockbuster development to headline the coming trading week – with President Trump’s announcement of a Strategic Crypto Reserve set to hold Bitcoin (+7.59%), Ethereum (+9.22%), Solana (+16.81%), Cardano (+58.77%), and XRP (+23.69%) having already sparked a broad-based crypto market rally. Continued risk reversal in these assets could very well be a strong candidate for the leading theme of this next window, with market participants already expressing significant appetite for speculative positioning on current and potential future reserve inclusions.

The OTC desk continues to offer tailored cryptocurrency liquidity solutions, offering competitive pricing across major coins, altcoins, and memecoins, paired with key fiat currencies. With T+0 settlement, we ensure seamless trading and settlement.

Ben Mensah, Trading Analyst

---

Derivatives Desk

WHOLESALE INVESTORS ONLY*

Both ETH and BTC basis rates gain on the week following Trump’s announcement on strategic crypto reserve :

• 90-day annualised Basis Rates on BTC is up 72 bps to 6.38% 
• ETH basis is up 30 bps (6.23%).

Trade Idea: Long Strangle on BTC Options Expiring One Week After Trump’s Crypto Summit

Thesis: We anticipate elevated volatility in Bitcoin options due to a confluence of macro and event-driven factors. Specifically, we see potential for significant market movement following the Trump Crypto Summit, compounded by geopolitical tensions and broader equity market fragility.

1. Event Catalyst: Trump Crypto Summit
   • The upcoming summit is expected to generate substantial headlines and potential policy discussions that could impact sentiment in the crypto markets.
   • Depending on the outcome, Bitcoin could see heightened directional moves, driven by investor reactions to regulatory and political narratives.
     
2. Geopolitical Risk:
   • Escalating tensions between the U.S., Ukraine, Russia, and China continue to inject uncertainty into global markets.
   • Any major developments in these geopolitical fronts could contribute to market instability and risk-off sentiment, impacting both traditional and digital assets.
     
3. Equity Market Volatility:
   • Skittish equity markets are showing signs of fragility, with increasing concerns around liquidity, rates, and macroeconomic uncertainty.
   • If broader risk assets experience large moves, Bitcoin and crypto markets could follow suit due to their increasing correlation with traditional markets during risk-off periods.

Trade Structure:

• Position: Long Strangle on BTC Options
• Expiration: 14th March
• Strike Selection:  88k Put (25 Delta Put) and 100k Call (25 Delta Call)
• Rationale: This setup allows participation in significant upside or downside moves without directional bias. If BTC experiences a breakout move due to event-driven catalysts, the strategy should generate strong returns.
• Risk Management: Consider rolling or closing the position if IV becomes overly inflated pre-event or if one leg of the strangle captures substantial intrinsic value.
• Cost: $4000 total premium paid

Payoff Explanation:

If BTC expires above the 100k the payoff is the spot price – 100k. If BTC expires below 88k the payoff is 88k – spot price. If it expires between the payoff is 0.

The maximum loss is capped at the $4,000 premium paid if BTC remains within the strike prices at expiration.

---

What to Watch

Australian GDP (Q4) – Wednesday, 6 Mar: Markets will assess whether economic momentum is picking up, with GDP expected to rise 0.4% QoQ (prev. 0.3%) and 1.2% YoY (prev. 0.8%). Public spending and household consumption are expected to support growth, though labour productivity remains weak (-1.5% YoY).

China Caixin Manufacturing PMI (Feb) – Monday, 4 Mar: Expected at 50.3 (prev. 50.1), the PMI release will provide insights into business sentiment amid rising trade tensions. The US is set to impose an additional 10% tariff on Chinese goods on the same day, which could weigh on economic expectations.

US ISM Manufacturing PMI (Feb) – Monday, 4 Mar: Expected at 50.8 (prev. 50.9), the data will indicate the strength of the US industrial sector. While manufacturing output has reached an 11-month high, slowing export orders and rising input costs due to tariffs could impact future activity.

US Tariff Hike (China, Canada, Mexico) – Tuesday, 5 Mar: The US will raise tariffs on Chinese imports by another 10%, bringing the total to 20%, while tariffs on Canada and Mexico will also take effect. China has vowed retaliation, adding further uncertainty to global trade flows.

US Nonfarm Payrolls (Feb) – Friday, 8 Mar: The labor market report is expected to show a 133k increase in payrolls (prev. 143k), with the unemployment rate holding at 4.0%. Wage growth is forecast to slow to +0.3% MoM (prev. +0.5%), though annual wage growth may tick up to 4.2% YoY (prev. 4.1%). A weaker report could support Fed rate cut expectations, while stronger wage growth may fuel inflation concerns.

* Index used:

Bitcoin	Ethereum	Gold	Equities	High Yield Corporate Bonds	Commodities	Treasury Yields
BTC	ETH	PAXG	S&P 500, ASX 200, VT	HYG	SPGSCI	U.S. 10Y

Contact Us

Zerocap is a market-leading digital asset firm, providing trading, liquidity and custody to forward-thinking institutions and investors globally. To learn more, contact the team at [email protected]

DISCLAIMER

Zerocap Pty Ltd carries out regulated and unregulated activities.

Spot crypto-asset services and products offered by Zerocap are not regulated by ASIC. Zerocap Pty Ltd is registered with AUSTRAC as a DCE (digital currency exchange) service provider (DCE100635539-001).

Regulated services and products include structured products (derivatives) and funds (managed investment schemes) are available to Wholesale Clients only as per Sections 761GA and 708(10) of the Corporations Act 2001 (Cth) (Sophisticated/Wholesale Client). To serve these products, Zerocap Pty Ltd is a Corporate Authorised Representative (CAR: 001289130) of AFSL 340799

This material is intended solely for the information of the particular person to whom it was provided by Zerocap and should not be relied upon by any other person. The information contained in this material is general in nature and does not constitute advice, take into account financial objectives or situation of an investor; nor a recommendation to deal. . Any recipients of this material acknowledge and agree that they must conduct and have conducted their own due diligence investigation and have not relied upon any representations of Zerocap, its officers, employees, representatives or associates. Zerocap has not independently verified the information contained in this material. Zerocap assumes no responsibility for updating any information, views or opinions contained in this material or for correcting any error or omission which may become apparent after the material has been issued. Zerocap does not give any warranty as to the accuracy, reliability or completeness of advice or information which is contained in this material. Except insofar as liability under any statute cannot be excluded, Zerocap and its officers, employees, representatives or associates do not accept any liability (whether arising in contract, in tort or negligence or otherwise) for any error or omission in this material or for any resulting loss or damage (whether direct, indirect, consequential or otherwise) suffered by the recipient of this material or any other person. This is a private communication and was not intended for public circulation or publication or for the use of any third party. This material must not be distributed or released in the United States. It may only be provided to persons who are outside the United States and are not acting for the account or benefit of, “US Persons” in connection with transactions that would be “offshore transactions” (as such terms are defined in Regulation S under the U.S. Securities Act of 1933, as amended (the “Securities Act”)). This material does not, and is not intended to, constitute an offer or invitation in the United States, or in any other place or jurisdiction in which, or to any person to whom, it would not be lawful to make such an offer or invitation. If you are not the intended recipient of this material, please notify Zerocap immediately and destroy all copies of this material, whether held in electronic or printed form or otherwise.

Disclosure of Interest: Zerocap, its officers, employees, representatives and associates within the meaning of Chapter 7 of the Corporations Act may receive commissions and management fees from transactions involving securities referred to in this material (which its representatives may directly share) and may from time to time hold interests in the assets referred to in this material.  Investors should consider this material as only a single factor in making their investment decision.

Past performance is not indicative of future performance.