alternative market update - mid june 2025 & views for june by macro eagle

​The cryptocurrency market in 2025 has experienced a dynamic and volatile trajectory, shaped by macroeconomic uncertainty, evolving regulation, and technological advancements. The year began with moderate gains, driven by institutional inflows into Bitcoin and Ethereum amid expectations of monetary policy easing in the second half of the year. Layer-2 networks on Ethereum gained traction, while Solana's developer ecosystem expanded significantly. However, momentum fluctuated due to intermittent risk-off sentiment tied to the broader equity downturn and policy signals from central banks. In the past two weeks, the market has sharply rebounded, fuelled by several converging catalysts. Bitcoin broke through $100,000 again, propelled by robust on-chain activity and renewed ETF inflows. Ethereum followed, with strong gas fee revenue and staking metrics supporting its performance despite scaling debates post-Pectra. Across altcoins, Layer-1 and Layer-2 tokens rallied on surging TVL and revived retail interest, while Solana registered a noticeable increase in decentralised exchange volume and stablecoin transfers. Investor sentiment improved markedly after U.S. inflation data came in below expectations, reinforcing Fed rate-cut bets. In parallel, geopolitical tensions showed signs of stabilising, reducing systemic risk premiums in crypto markets. A more detailed review and outlook on the macroeconomic and geopolitical landscape is provided further below from Macro Eagle. Since the beginning of 2025, Bitcoin gained 13%, while many altcoins are still in the red. Ethereum and Solana are down around 20% this year, but they have recovered substantially from their lows this year.

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RESEARCH PERSPECTIVE VOL. 253 June 2025 Alternative Markets Update The cryptocurrency market in 2025 has experienced a dynamic and volatile trajectory, shaped by macroeconomic uncertainty, evolving regulation, and technological advancements. The year began with moderate gains, driven by institutional inflows into Bitcoin and Ethereum amid expectations of monetary policy easing in the second half of the year. Layer-2 networks on Ethereum gained traction, while Solana's developer ecosystem expanded significantly. However, momentum fluctuated due to intermittent risk-off sentiment tied to the broader equity downturn and policy signals from central banks. In the past two weeks, the market has sharply rebounded, fuelled by several converging catalysts. Bitcoin broke through $100,000 again, propelled by robust on-chain activity and renewed ETF inflows. Ethereum followed, with strong gas fee revenue and staking metrics supporting its performance despite scaling debates post-Pectra. Across altcoins, Layer-1 and Layer-2 tokens rallied on surging TVL and revived retail interest, while Solana registered a noticeable increase in decentralised exchange volume and stablecoin transfers. Investor sentiment improved markedly after U.S. inflation data came in below expectations, reinforcing Fed rate-cut bets. In parallel, geopolitical tensions showed signs of stabilising, reducing systemic risk premiums in crypto markets. A more detailed review and outlook on the macroeconomic and geopolitical landscape is provided further below from Macro Eagle. Since the beginning of 2025, Bitcoin gained 13%, while many altcoins are still in the red. Ethereum and Solana are down around 20% this year, but they have recovered substantially from their lows this year. Figure 1: YTD of Bitcoin, Ethereum, and Solana, Source: CoinMarketCap, June 2025 Aside from regulatory clarity on the horizon, there are significant indicators for an altcoin season emerging. While the IPO market has been relatively slow in general, it is highly active for fintech and cryptocurrencies, with high-profile IPOs having occurred recently. In fintech, eToro was the most notable IPO, while in the blockchain space, notable IPOs include Circle, the company behind the USDC stablecoin, and Galaxy’s listing on Nasdaq US. Circle’s IPO was especially impressive, as shares were offered at $31 and closed on its initial trading day at $83, briefly rising above $100 per share. Since its IPO last week, the stock has increased to $118. Other notable developments include the listing of CoinShares on the Nasdaq Nordics and Coinbase being added to the S&P 500. The cryptocurrency IPO market is expected to continue its strong streak with additional high-profile IPO applications, such as the Winklevoss’ Gemini. Market participants also expect crypto exchange Kraken, among others, to join the public market soon. At present, there are also many Bitcoin miners listed on exchanges, with Marathon Digital Holdings (~50k BTC), Riot Platforms (~19k BTC) and CleanSpark (~12k BTC) being the most well-known Bitcoin miners in the US. In recent months, cryptocurrency treasury companies have also sparked interest. These are companies that hold cryptocurrencies as their treasury asset of choice rather than cash. By far the most prominent example is Michael Saylor’s Strategy (formerly MicroStrategy), which is dedicated to accumulating Bitcoin. Intuitively, these companies should be valued at their NAV, as ETFs are. However, despite the launch of Bitcoin and Ethereum ETFs, these treasury companies continue to trade at significant premia in most instances. For example, Strategy is still trading at a premium to its NAV of around 60%. A key reason is the ability of these companies to amass more tokens per equity than a direct investment. The most straightforward option is to issue debt to buy tokens, which increases the number of tokens per share. However, this only works to a degree, as the company still needs to be able to meet its interest requirements. Other options to increase the tokens per share include buying locked tokens at a discount, e.g. the acquisition of SOL tokens from the FTX bankruptcy when the company held nearly 10% of the total supply for SOL. Alternatively, the tokens on the balance sheet can be used to stake, which rewards additional tokens. The variety of ways to amass more tokens makes public digital asset treasuries an appealing alternative to holding the underlying token itself. Yet, the risk should not be underestimated, as these companies are essentially the same as holding the underlying asset, with the additional risk of potential losses if the premia fall, aside from the potential for bankruptcy in case debt obligations cannot be met. More recently, these companies have turned to convertible debt and private investment in public equity (PIPE). These opportunities typically provide private investors with additional upside and/or downside protection (in the case of convertible debt). However, such opportunities are typically difficult to access. Macro Eagle: Views for June by Bobby Vedral I – May RECAP Thanks to Trump’s Tariff-Truces US equities had their best May since 1990: first China (May 12th) then EU (May 26th) – see chart. Interesting to notice that the market pretty much ignored the US International Court of Trade decision (May 28th) which shows how much weight Trump carries.  Otherwise: (1) US fiscal credibility: rising yields, weak auctions, loss of AAA rating. (2) Musk leaving DOGE, after criticising (3) the BBB - “Big Beautiful Bill”: 1116 pages – really? (4) Ramaphosa getting “Zelenskyed” in the White House. (5) Harvard playing the role of a White House Cinco de Mayo piñata. (6) Trump’s Middle East trip reviving “Sovereign AI” capex, and (7) a massive shift in US foreign policy as per his Riyadh speech. More below.  II – May in NUMBERS (my Top 10) (1) The S&P500 recorded its best May since 1990 – left graph. (2) Bitcoin and the German DAX hit a new all-time-high. (2) Japanese 30y yields hit a record 3.2% - middle graph. (3) US consumer sentiment recorded its 2nd lowest reading ever, while 1y inflation expectations hit a high since 1981 – right graph. (4) Moody’s downgraded the US to Aa1, a first since the initial rating in 1919. (5) The US Economic Policy Uncertainty index recorded its highest daily average per month in 35 years. (6) Merz became Germany’s oldest new Chancellor and the first ever to need a second Bundestag vote to be confirmed. (7) Germany overtook Japan to become the world’s biggest holder of foreign assets, a position it last held in 1991. (8) Cardinal Robert Francis Prevost became Pope Leo XIV, the first ever US American. (9) America’s oldest coin, the penny, is being taken out of circulation after 230 years in existence. (10) Russia hit Ukrainian cities with 355 drones in one night – a record.  III – June PREVIEW Next week is my favourite: AI-hype (Apple and NVDA developer conferences plus Tesla’s robotaxi launch), inflation data and the G7-Summit. The third week is central bank heavy and has a tricky “triple witching Friday”, as it is stuck between a holiday (Juneteenth/Corpus Cristi) and the weekend – that looks like “air gap” risk to me. Fourth week is NATO Summit and Powell’s semi-annual hearing in congress.  Fifth week is the ECB’ s annual Sintra Summit – and of course, Wimbledon starts.  Overall keep an eye on: (1) yields and bond auctions – especially Japan. (2) Tariffs. (3) Big Beautiful Bill. (4) Weather – typhoon and hurricane season starting.   IV – DEMOCRATS and TRUMP’S Middle East Trip The recently published “Original Sin” (Tapper/Thompson) and “Fight” (Allen/Parnes) amazed even cynics like me about the hubris and Politburo-style loyalty tests in the Biden White House. Add to that a complete failure of Democrats and the Main Media to challenge anything. Favourite shut-up line: “Oh, so you want to help Trump?”. Crazy. One wonders how Democrats plan to hold an energetic Trump to account, when they couldn’t even challenge a frail Biden. In a two-party system, a morally bankrupt opposition is of course a problem. Back to Trump. May saw a big “pendulum swing” in Foreign Policy, specifically Trump’s speech in Riyadh: away from a value-based interventionism and towards a trade/transactional foreign policy. As he said: “In the end the so-called nation-builders wrecked far more nations than they built, and the interventionalists were intervening in complex societies that they did not even understand themselves.” Most of my friends in the Global South would agree with that statement. Note for investors: pay attention to the economic and geopolitical influence of the Gulf going forward. Far too many I speak to have a complete outdated picture of this region (especially those who don’t travel) and widely underestimate its importance (complacency at best, ignorance at worst). V – Fiscal Worries and the BBB The warning signs keep mounting: Moody’s downgrade, weak 20y UST auction (lowest bid to cover since 2012), rising gold prices, rising Japanese yields (2nd biggest DM bondmarket). That’s not a good time to push through a BBB (“Big Beautiful Bill”), especially with dubious clauses such as Section 899 (effectively a tax on foreign investors). But hey, the Republicans have “the pedal to the metal”, so off they go, with the hope that: (1) there is a Bessent Put and ultimately QE if the sh#t hits the fan. (2) AI and growth will save the day. (3) Tariff revenues will fill the coffers. But ... as an old boss of mine used to say: “Hope is not a strategy”. With a Republican majority of 53 in the Senate, I will be following closely any indication of chickening out by the Fiscal Hawks (mainly Paul, Johnson, Lee, Scott). VI – PRIVATE MARKETS Private markets are being questioned: see equity price action (left graph), the press (middle) and regulators (right).  The main worries include: (1) Lots of debt and high yields don’t go well together: Moody’s reports a default rate of 16% among PE backed companies, more than double the non-PE number. (2) Crowding: there are an estimated 3,500 PE firms – a pruning seems overdue. Having said that, the Strong will become Bigger, as the Small/Weak struggle. (3) Over-allocation: if I use the S&P500 (large cap)/S&P400 (midcap) market-cap-ratio as a proxy for the TAM of private markets, then that’s ~10%. The ~40% allocation of some US university endowments seems way off. (4) Trump is testing two of Swensen’s Yale Model assumptions: that unis can invest in perpetuity and pay no taxes. Hm, not really.  Frustrated investor are turning to financial engineering solutions like “continuation funds”, NAV lending and “collateralised fund obligations”. As the Economist wrote: “only naïve or delusional institutional investors see these developments as anything other than signs of distress”.  VII – EUROPE: keep an eye on BRITAIN & GERMANY The EU Commission’s “bonfire of red tape” is impressing no one, mainly because the same team that not so long ago was proud of being a “regulatory powerhouse”, is now self-identifying as “red-tape-cutters”. Joke.   Worth keeping an eye on Germany. Chancellor Merz had a decisive start, engineering a fiscal bazooka before even taking office and appointing ministers with business experience. Also, at 75, he is the oldest new chancellor of the Federal Republic. He may only have one term. He is in a hurry. Add to that, that he has never managed to be popular, so to get into the history books he will have to deliver. He better, because the AfD is waiting in the wings (left graph).   Second, Britain. Another government feeling the populist pressure, with Farage having hammered Labour and Tories in the local elections on May 1st (middle graph). I was though impressed by the government’s trade deal “hat-trick” in May: India (May 6tH), US (May 8th), EU (May 19th). Starmer seems to have a renewed sense of urgency. That helps. Notice that in the IMD World Competitiveness Ranking Germany is 24th and the UK is 28th. If there is (political) will for reform, there is (economic) upside.  VIII – My BRO (= Binoculars of Risk and Opportunity) It doesn’t look good … In Israel’s case, Netanyahu kept ignoring Trump, who returned the favour: (1) deal with Houthis without including Israel; (2) nuclear talks with Iran; (3) touring Middle East without visiting Tel Aviv; (4) lifting sanctions on Syria. In turn Netanyahu launched “Operation Gideon’s Chariots” into Gaza. This is looking ugly and won’t end well.  As for Ukraine, Trump seemed surprised to find out that Putin wasn’t the peace activist he thought he was (“absolutely crazy”). In fact, a Russian summer offensive looks quite likely. And with Russia outproducing Ukraine, the latter will have to strike factories deep inland. Not looking good.   Notice that when Putin met Xi in Moscow on May 8th, their “Joint Statement on Global Strategic Stability” mentioning “nuclear” 37 times in a 25 paragraph diplomatic communique. Not being subtle, are they? IX – PORTFOLIO Ignoring geopolitics for a moment, the overall set-up looks reasonable: investor sentiment is positive without being exuberant (left graph); US recession probability is receding (middle); US retailers - Walmart, Costco, HD, Amazon - valuations imply a healthy consumer; and  the US 10 year is trading below 4.70%,although last month’s upside momentum was somewhat worrying (right graph). In the meantime, the “crowded consensus” view out there is: “long Gold, long Bitcoin, short USD, long non-US equities” with “long AI” making a comeback after Trump’s Middle East tour. “Groupthink” makes me nervous.   Overall, my core portfolio is unchanged: long non-US equities, especially European defence – which I’m trimming. Long gold, commodities, cash, bills. Missed last month’s tech rally, but that’s fine as I’m avoiding long duration assets, anything illiquid, credit and anything the government can print. I wish you all a great June, and as always: MAY THE MARKET BE WITH YOU! Bobby   The views expressed in this article are those of the author and do not necessarily represent the views of, and should not be attributed to, Stone Mountain Capital LTD. Readers should refer to the Disclaimer. Bobby Vedral MacroEagle E : [email protected] M : +447899996595 Bobby is a macro-political analyst who runs his own fund MacroEagle. He is also the UK representative of the German Economic Council (Wirtschaftsrat Deutschland) focused on the German-British relationship post-Brexit. Bobby left Goldman Sachs in March 2018, where he was a Partner and Global Head of Market Strats. His previous responsibilities included Systematic Trading Strategies, eProduct and FX/EM Structuring. In his external functions he was Member of the ECB's FX Consulting Group. Before Goldman Sachs, Bobby worked at Deutsche Bank and UniCredit/HVB. 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