Core Strategy

While the market has repriced quite substantially to reflect optimism over trade, we believe further upside could come from ensuing changes in tax and regulatory policy. In the House’s latest bill, more than $4 trillion in tax cuts have been proposed, with just $1.5 trillion in spending reductions. This implies continued fiscal expansion, which is stimulative and, all else equal, positive for crypto.

Changes:

Increasing ETH Exposure:

We first flagged ETH as one to watch on May 2^nd and have been tracking its growing potential ever since. We are now formally increasing ETH exposure in our Core Strategy. Among the factors supporting this shift are: small cap outperformance, rising CME activity, a large buyer in Abraxas Capital, improving technicals, and a renewed cultural and strategic push within the Ethereum Foundation. A mean reversion to the 200-day moving average in ETHBTC would imply a price of approximately $3,150, assuming BTC holds around $105,000. If BTC moves higher, that target moves with it.

Trade Hurdle Cleared for Now

On Friday, we reiterated our bullish bias to clients but emphasized the need to read and react to the outcome of Treasury Secretary Scott Bessent’s meeting with Chinese trade officials o...