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Markets leaned cautiously towards risk, with cryptocurrencies outperforming against a mixed backdrop of traditional assets. ETF flows saw their biggest single-day rise since October, as CPI, Treasury auctions and the FOMC week could reset risk appetite. Additionally, we discuss the new WET token, the native token of the HumidiFi AMM mainstay.
Indicators
Markets have turned towards risk, with leading cryptocurrencies and traditional assets mixing. BTC posted modest gains (+2.3%), outperforming stocks as the S&P 500 (-0.3%) and Nasdaq 100 (-0.2%) fell, while gold remained roughly flat (+0.3%). The most notable indicator was the Perp index, which contracted by -5.1%.
Perps (-5.1%) was the clear laggard on the day, influenced by the sharp rise and fading of the day across dYdX, GMX and specifically HYPE. Midday pressure briefly lifted the sector before momentum stalled and flows reversed at the close. JUP stock rose as much as 9% before giving back most of its gains. Meanwhile, HYPE has been struggling lately, as building tokens create new front-end relationships with users, and the market anticipates the emergence of a generation event (TGE) from Competition lighter.
Looking ahead, markets will be looking towards this week’s CPI reading and a set of mid-week Treasury auctions, both of which could reset risk appetite. As implied volatility continues to be suppressed across major currencies, any macro surprise risks triggering outsized moves.
Market update
The flows finally turned significantly positive. BTC ETFs led the bulk of the move ($287 million), ETH had its best day since October 28 ($142 million) and SOL contributed marginally ($16 million). This is the first clear sign of a return to risk appetite after nearly a month of volatility to negative prints. Higher flow likely reflects short-term positions ahead of catalysts such as the FOMC, inflation data, and jobs. This can also be attributed to end-of-quarter optics, as distributors often re-express benchmark exposure in liquid wrappers during macro-heavy weeks.
However, assets under management to market capitalization ratios tell a different story. BTC is still stuck near ~6.6-6.8%, ETH continues its multi-month decline from ~3.3% to ~2.8%, and SOL, while rising, remains just under 1%. This difference suggests that rising prices, not sticky flows, have been the dominant force maintaining ETF volumes.
Meanwhile, the Bitcoin influx looks more like a tactical re-risk than renewed condemnation. Derivatives markets are showing high basis but low external investment, a sign that capital currently prefers directional spot exposure over leverage.
ETF flows are becoming increasingly important for Bitcoin, because traditional “DATCO” buyers are not holding the bid anymore. The latest data on Treasury holdings show that, excluding strategy (MSTR), corporate accumulation has been virtually flat for several months. Names like NAKAMOTO, SMLR, SQNS, and smaller treasury groups have added marginal amounts at best, contributing almost nothing to the growing demand. Even MSTR cannot continue to accumulate in the same way as before.
This is especially true given that the major BTC DATCOs have a net worth value (mNAV) of less than 1, eliminating the play that was accumulating in BTC of shareholder dilution. In other words, the company balance sheet view that helped define the previous cycle and earlier this cycle is not going to appear anytime soon for BTC.
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