Wintermute Weekly Update: Geopolitical Tensions Drive Market Sentiment, Bitcoin Sees 2% Weekly Gain Holding Key $67,000 Support

Wintermute’s latest weekly report (April 7) notes last week’s markets were entirely driven by geopolitical news: - **Tuesday**: Iranian president signaled a ceasefire, sparking a roughly 2.9% jump in the S&P 500 and a drop in Brent crude to $105/bbl. - **Wednesday**: Trump delivered a hardline speech, pledging “very severe” action against Iran within 2-3 weeks and stating no intent to reopen the Strait of Hormuz. - **Thursday**: WTI crude surged over 11% to above $111/bbl; Asian markets tumbled sharply. - **Sunday**: Trump threatened to bomb Iranian bridges and power plants by Tuesday, while saying an agreement is “highly likely” by Monday. A 45-day ceasefire framework is under discussion. ### Macro Updates - The 10-year U.S. Treasury yield currently stands at 4.36% (a 40bps rise since the conflict erupted). - Swap markets price in **zero chance of a rate cut** at the Fed’s April 28-29 meeting. - PCE data (Fed’s preferred inflation gauge) is due Thursday; markets watch if the oil shock feeds into inflation. ### Digital Assets - **Bitcoin**: Gained just 2.0% last week. Fear & Greed Index = 9 (extreme fear); social sentiment is its most bearish since the conflict began. - **Institutional Trends**: - March ETF net inflows hit $1.32B (strongest since Oct 2025); strategies added 44,000 BTC. - Morgan Stanley approved a spot ETF with a 14bp fee. - *But*: Final week of March saw $414M in ETF outflows; exchange whale ratio climbed from 0.34 to 0.79 since January; OTC data shows institutions shifting from buying to net selling/neutral. - **Ethereum**: Outperformed (+4.2%); staking yields are a differentiating advantage in the “higher for longer” rate backdrop. - **Solana**: Fell below $80 following a Drift protocol hack ($285M loss—Solana’s 2nd-largest hack ever). ### Key Juncture: Tuesday Deadline Wintermute flags Tuesday’s Strait of Hormuz deadline as critical: - The 45-day ceasefire framework is the most specific de-escalation effort to date—but damage to Iranian energy facilities, Gulf refineries, and port logistics has already occurred. Even a full ceasefire won’t restore pre-war shipping capacity overnight. - If the “power plant day” threat materializes and Iran retaliates, the oil price risk premium will immediately rebuild.