Will April Tariff Showers Bring May Crypto Flowers?

Changes are happening at other Federal agencies. The Federal Deposit Insurance Company (FDIC) clarified that supervised institutions could engage in crypto without prior approval while the OCC, which regulates America’s banks, said that banks can custody crypto, hold stablecoin reserves, and settle on blockchain networks. This stuff may sound technical, but it’s a significant development and a major departure from the past. It is still up around 15% from prior to the election — on par with gold and well ahead of the S&P 500 index.

Second, institutions and enterprises are building more confidently with blockchain. Once hesitant due to regulatory uncertainty and the nascent stage of the technology, they are plunging in. Banks, brokerages, and payment firms are joining asset managers and big technology enterprises in adopting blockchain and embracing tokenization. Bank of America, Morgan Stanley, Charles Schwab, Fidelity, and SoFi are just a few examples.

Third, as we wrote earlier this month, a crypto IPO wave may be forming , with stablecoin issuer Circle likely to lead the charge. The hope is that a Circle IPO will spark broader momentum—ushering in a crypto IPO season. While market volatility tied to tariffs has kept the broader IPOs market on ice, the pipeline of potential crypto issuers is building. Many crypto firms—delayed largely by regulatory overhang—are now ready to move ahead. eToro has already filed, while Bullish, Gemini, Kraken, Anchorage, Chainalysis, Figure, MoonPay, Ripple, and Consensys are rumored to be preparing. M&A has also picked up in the sector: Kraken acquired NinjaTrader, Ripple bought Hidden Road, and Coinbase is eyeing Deribit. The activity suggests that when IPO markets reopen, crypto could lead the way.

A growing roster of publicly traded crypto firms is a win. Investors—especially institutions—want exposure to digital assets but can’t or won’t hold them directly. Public equities provide an on-ramp in the regulated market. Going public also demands transparency, governance, and accountability—building trust with investors, customers, partners, and regulators alike.

While Bitcoin is down from it’s all time high, it is still up around 15% from prior to the election — on par with gold and well ahead of the S&P 500 and NASDAQ. And pullbacks are normal in crypto bull markets. Between 2019 and 2021, Bitcoin fell 25% or more five separate times en route to its all-time high. This cycle, it’s down 20% from January’s peak—well within historical norms. Short-term caution is warranted. But our long-term outlook remains bullish.

Will April tariff showers bring May crypto flowers? Hope springs eternal.

This piece is based on our March Market Commentary for the Crypto and AI Leaders ETF (TKN). It has been shortened for this newsletter, and updated with more recent data and analysis

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Join Alex Tapscott and Andrew Young as they decode the world of Web3.  Listen in as they discuss the current macroeconomic environment and its implications for the crypto market, four of the most positive fundamental trends in crypto, how stablecoins are creating new source of demand for U.S. government debt, the onchain gold and FX markets setting record highs in activity last week, the underlying economics for stablecoin issuers, the launch of the world’s first Solana ETFs in Canada, an update on the SX Network following its best month in history, and more.

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Chart 1: The Tokenized RWA Market Just Hit $20 Billion, And It’s Just Getting Started

The tokenized real-world asset (RWA) market is something we’ve been focused on for a few years now. And just last week, it hit a major milestone, surpassing $20 billion in total value for the first time in history. It’s doubled over the past year and grown nearly 30x in the last five. This growth isn’t surprising. It’s happening as traditional global asset managers like BlackRock, Fidelity, Franklin Templeton, UBS, and others, are embracing tokenization and launching their own RWA products in this space. Their leaders have increasingly advocated how tokenization will drive the next generation of financial markets. In BlackRock’s annual letter to shareholders two weeks ago, Larry Fink called DeFi an “extraordinary innovation that makes markets faster, cheaper, and more transparent.” A few months earlier, he even pushed for the SEC to fast-track approvals for tokenized stocks and bonds, saying it could democratize investing in “ways we can’t imagine.” Today, the market sits at $20.8 billion, with roughly 95,000 holders across about 160 different issuers. The three biggest asset classes by onchain AUM are private credit ($12.7 billion), U.S. Treasuries ($5.7 billion), and commodities ($1.4 billion). Ethereum leads the way here, hosting 60% of the market while the remaining is spread across other chains like ZKSync Era, Stellar, Aptos, Solana, Algorand, and others. We still think this market is just getting started. As the regulatory picture in the U.S. becomes clearer, more traditional banks and institutions are starting to get serious about crypto, with several recently announcing plans for new offerings now that they feel it’s finally safe to get involved.

Two months ago, we talked about how crypto sentiment had dropped to rock-bottom levels, worse than even after FTX collapsed. Back then, the Crypto Fear & Greed Index hit an “extreme fear” score of just 10 out of 100, with Bitcoin falling to $85,000. The last time sentiment fell this fast and this low was last summer, when concerns around the German government and Mt. Gox Bitcoin liquidations, plus the unwinding of the Yen carry trade, dragged Bitcoin from $68,000 to $53,000. Before that, it was late 2022, when fear took over after FTX’s implosion and Bitcoin bottomed out at $15,800. For reference, those events brought sentiment scores down to 17 and 21, respectively. Right now, the index has recovered a bit—sitting at 31—but it’s still in “fear” territory. However, we think that’s mostly because of the broader macro environment. Just last week, we pointed out how strong Bitcoin has held up relative to other asset classes since Trump’s election win. Looking at this chart, it’s clear that these fear-driven dips have historically been some of the best times to buy or add to positions. The last two major sentiment crashes were followed by steady climbs back to the highs once the fear cleared out. That might be even more true today, with crypto enjoying its strongest tailwinds ever: better regulation, more institutional adoption, and the most advanced tech we’ve seen. Short-term pain like this has come and gone before. And we believe this time will be no different.