Coinbase: What Is the Crypto Market Watching?

Original Title: Weekly: Business as Usual?

Original Source: Coinbase

Original Translation: Tao Zhu, Golden Finance

Summary

· Last week, both the cryptocurrency and traditional risk markets remained subdued as participants focused on the upcoming tariffs effective on April 2.

· Regulatory tailwinds for U.S. cryptocurrency remained strong. President Trump emphasized a focus on U.S. dominance at a digital asset summit, and the U.S. Securities and Exchange Commission hosted the first of five cryptocurrency special working group roundtable meetings on March 21.

· This week was significant for stablecoins. The House released a draft of the Stablecoin Act, World Liberty Financial plans to launch a stablecoin backed by U.S. Treasuries, Fidelity Investments is testing a USD-linked stablecoin, and Wyoming's multi-chain WYST entered the testnet.

Last week, trading in both cryptocurrency and traditional risk markets was subdued as participants awaited the tariffs effective on April 2. Nonetheless, on March 27, President Trump announced a 25% tariff on all imported cars, escalating market anxiety further by imposing reciprocal tariffs on trading partners. Despite this, the market performed relatively well, but we believe this was largely due to short-covering rather than fundamental trading. The spot and futures trading volume for BTC, ETH, and SOL on global centralized exchanges remained lackluster, although this is typically a time when we see month-end portfolio rebalancing adding liquidity.

Another technical factor driving broader market activity was GameStop's announcement of issuing $1.3 billion in zero-coupon convertible senior notes maturing in 2030, to be used for future purchases of Bitcoin for its treasury. Over the past few months, several publicly traded companies (apart from Strategy, formerly MicroStrategy) have announced Bitcoin acquisitions, including Metaplanet, Solidion Technology, and Semler Scientific.

Meanwhile, regulatory tailwinds for cryptocurrency remained strong – especially in the U.S., as symbolized by President Trump's speech at a digital asset summit last week, where he emphasized the focus on U.S. dominance in the field and drew attention to ongoing work on stablecoin and market structure legislation.

Related to this, the U.S. Securities and Exchange Commission (SEC) hosted the first of five roundtable discussions on March 21, focusing on the conditions under which certain digital assets would be classified as securities. These discussions may form the framework of a crypto market structure bill, with further discussions on custody, tokenization, DeFi, and other topics set to take place before June 2025. The Senate recently passed a resolution (70 votes in favor) to repeal the IRS's DeFi reporting rule, awaiting approval from President Trump.

Stablecoins and Multi-Chain

Regarding stablecoins, the House of Representatives released the full text of the Stablecoin Transparency and Accountability to Build Better Ledger Economic (STABLE) Act on March 26, outlining the preliminary direction of the forthcoming legislation. It is noteworthy that the act prohibits paying interest or returns to stablecoin holders and prohibits the creation of new algorithmic stablecoins (i.e., collateralized stablecoins) for two years. The act also outlines reserve and transparency requirements for issuers and establishes an approval process for entities seeking to issue new tokens.

Meanwhile, many other new stablecoins have made progress. World Liberty Financial announced plans to launch its own treasury-backed stablecoin. Fidelity Investments is testing a stablecoin (though its launch plans have not been confirmed yet), and Wyoming is entering the testing phase of its Wyoming Stable Token (WYST). We believe Wyoming's stablecoin launch strategy is particularly interesting as it underscores that while the focus is currently on Ethereum, tokenization may evolve into a multi-chain phenomenon in the long run.

Wyoming has partnered with LayerZero as its token issuance partner to launch WYST contracts on the Avalanche, Solana, Ethereum, Arbitrum, Optimism, Polygon, and Base testnets. Likewise, BlackRock has extended its on-chain treasury fund BUIDL to the Solana blockchain—joining Aptos, Arbitrum, Avalanche, Ethereum, Optimism, and Polygon, expanding the networks where investors can access its products.

Interest in tokenized treasury funds has been rapidly increasing, with $1.3 billion in additional AUM flowing into BUIDL this month (totaling $1.9 billion). While most of the current interest and liquidity are concentrated on Ethereum (90% of BUIDL's total supply is on Ethereum), branching out preemptively to different blockchain networks suggests that issuers may be willing to follow users and liquidity if the adoption pattern shifts.

Cryptocurrency and Traditional Asset Overview

Coinbase Exchange and CES Insights

The cryptocurrency market witnessed a rebound. It has continued to correlate with the US stock market, with BTC reclaiming the key 200-day moving average. The Coin 50 Index also saw an uptick but remains in a downtrend, reflecting relative weakness in other cryptocurrencies. Unless there is unexpected economic data released, we expect range-bound volatility to persist at least until April 2, the deadline for President Trump's tariff imposition.

Single-digit perpetual funding, recent highs in stablecoin AUM, and short-term futures basis screening have highlighted low positions as traders patiently await further data before adding meaningful risk. Historically, April, May, and June have been challenging months for cryptocurrency assets, so maintaining a lower position may prove to be a prudent strategy.

Coinbase Platform Trading Volume (USD)

Trading Volume Segmented by Asset on the Coinbase Platform

Funding Rate

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