Major Market Shifts, Macro Uncertainty, and Regulatory Progress
Weekly Market Update #66
In partnership with Elementus
Happy start to the week! Welcome back to the Reflexivity Weekly Market Update — your concise rundown of the biggest moves in crypto. If someone forwarded you this, you can Sign up here for free to get it straight to your inbox!
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Major Market Developments:
😨 Fear & Greed Index: 35 – Market sentiment is cautious but stabilizing.
🔻 Bitcoin ETF net outflows: ~$707.9M.
🔻 Ethereum ETF net outflows: ~$82.5M.
🇭🇰 Hong Kong allows crypto staking services (incl. ETFs) on licensed platforms.
⚖️ DOJ drops its crypto crime unit and won’t target wallets/mixers for user actions.
🏛️ Trump repeals the US “crypto broker” tax reporting rule in a big deregulation move.
🤝 Ripple to acquire prime broker Hidden Road for $1.25B.
👻 Aave launches token buybacks & integrates Pendle yield tokens (see Spotlight).
💳 Kraken partners with Mastercard to roll out crypto debit cards (EU & UK launch).
🚀 Binance debuts LDUSDT (yield-bearing margin token) & adds Apple/Google Pay support.
Fear & Greed Index:
The Crypto Fear & Greed Index sits at 35 this week, signaling a cautiously bearish mood. Notably, sentiment has steadied versus last week – a sign that extreme fear is easing.
Investors remain wary due to macro uncertainties and the recent market chop, but the modest uptick in this index suggests panic is subsiding.
In short, the market’s psychology is cautious but finding its footing: participants are no longer in “extreme fear” mode, which could set the stage for a healthier sentiment if supportive news emerges.
ETF Flows:
From 7 to 11 April 2025, both Bitcoin and Ethereum spot ETFs experienced broad net outflows, reflecting a clear risk-off stance among investors.
Bitcoin ETFs saw heavy redemptions totalling approximately $707.9 million, with persistent selling across nearly all major funds. The largest outflows came from IBIT (−$342.6m) and GBTC (−$160.9m), signalling divestment from both newly launched and legacy products. No ETF posted consistent inflows, and even smaller funds like FBTC, BITB, and ARKB contributed to the drawdown.
Ethereum ETFs similarly recorded $82.5 million in net outflows, driven primarily by FETH (−$45m) and a sharp final-day redemption from ETHE (−$26.1m). Only ETHA showed any meaningful inflow, with a modest $6.4 million on 10 April. Across both asset classes, flows were decisively negative.
Spotlight 🔦
Aave has announced developments on both product integration and tokenomics. The Aave DAO recently approved the integration of Pendle Finance’s Principal Tokens (PTs) into the Aave V3 money market. These PTs, which represent the principal portion of yield-bearing assets, will become eligible as collateral and borrowable assets. This integration introduces fixed-yield instruments to Aave, allowing users to borrow against future yield or lend at a fixed rate. The move is expected to broaden Aave’s product offerings and enhance its appeal to users seeking fixed-income strategies.
Concurrently, Aave governance approved a $4 million token buyback programme, aimed at supporting AAVE token value.
Funded by interest earned in aEthUSDT, the buyback reflects the first phase of the protocol’s tokenomics strategy ("Aavenomics"). The proposal received 99.6% approval and will involve purchasing AAVE tokens on the open market over the next month. This action is designed to reduce circulating supply, support the token’s price, and align incentives for long-term holders.
Together, these initiatives demonstrate a dual strategy: external growth through product integration and internal reinforcement via treasury management. Both are intended to strengthen Aave’s position in the DeFi space.
Rapid Reflexivity: Quick Market Takes ⚡
Hong Kong – Regulators greenlit licensed crypto exchanges and even crypto ETFs to offer staking services, a landmark move integrating staking into mainstream investment products.
U.S. DOJ – The Justice Dept. disbanded its crypto enforcement team and will stop targeting mixers or self-custody wallets just for use, marking a major shift toward a less aggressive crypto policy.
Trump Admin – President Trump signed a law repealing the controversial IRS “crypto broker” rule, rolling back stringent tax reporting requirements for DeFi and self-hosted wallets in a big win for the industry.
Ripple – In a blockbuster deal, Ripple agreed to acquire crypto prime broker Hidden Road for $1.25 billion. This acquisition (one of crypto’s largest) gives Ripple a direct foothold in institutional trading and liquidity.
Binance – On-ramps made easy: Binance partnered with Worldpay to integrate Apple Pay and Google Pay for crypto purchases. Users globally can now buy crypto via these popular payment apps, greatly simplifying fiat to crypto access.
PancakeSwap – The BSC DEX unveiled CAKE Tokenomics 3.0, a proposal to aggressively cut CAKE emissions (targeting ~4% annual deflation) and retire its old veCAKE staking model. The goal is to make CAKE scarcer and reward long-term holders, revamping governance for sustainable growth.
Pump.fun – The Solana-based memecoin platform reinstated livestreaming for a subset of users five months after disabling it due to on-stream chaos. This time, it’s rolling out with strict moderation tools to prevent the dangerous stunts and NSFW content that plagued its first run.
WLFI (World Liberty) – Trump-backed World Liberty Financial proposed a test airdrop of $1 in “USD1” stablecoin to every $WLFI holder. This tiny drop for early supporters is meant to validate their airdrop system on-chain ahead of larger rollouts.
Ethena is reportedly in talks to sell up to $100M of its ENA tokens to big-name investors (rumored participants include Franklin Templeton and others). The funding would fuel Ethena’s plan to bridge TradFi and DeFi with an institutional-grade, yield-bearing stablecoin platform.
For this week's final update, we will take a quick glance at the best and worst performers.
Last week saw an over 50% rally for select assets. The largest loser of the week is MANTRA and its token $OM. On April 13, 2025, $OM crashed 90% from $6.21 to under $0.50, wiping out over $5.5B in value. The exact cause of the crash is still under investigation.
Disclaimer: This research report is exactly that — a research report. It is not intended to serve as financial advice, nor should you blindly assume that any of the information is accurate without confirming through your own research. Bitcoin, cryptocurrencies, and other digital assets are incredibly risky, and nothing in this report should be considered an endorsement to buy or sell any asset. Never invest more than you are willing to lose, and understand the risk that you are taking. Do your own research. All information in this report is for educational purposes only and should not be the basis for any investment decisions that you make.