Here’s what you’ll find in today’s edition:

• Why we’re watching foreign exchange markets. 

• This bitcoin-loving senator just got promoted. 

• What to make of the CME solana, XRP futures hoopla.

FX lessons from Brent Donnelly 

A major thesis I have for 2025 is that FX will be one of the key macro assets to focus on. 

The big reason is that FX currencies are the exhaust valve for interest rate differentials between other countries, and therefore tariff implementation since that gets directly imputed into global capital flows that are key drivers of global currencies. 

With this belief in FX volatility being the key exhaust valve of Trump’s tariff and trade policy this year, I went ahead and interviewed one of the best macro FX traders I know: Brent Donnelly of Spectra Markets.

Of course, nothing beats watching the full episode, but here are a few of my favorite takeaways: 

On how much capital flows drive FX currency: 

“The hard thing is that the capital flow stuff kind of happens around the edges. So if you have a good capital flow story, that could be marginally biased in one direction. But if the bigger drivers like rate differentials are pointing in the other direction, it's not going to work. So capital flows tend to be more of like an accelerant, not a directional driver.”

On how emerging market currencies are mostly driven by carry trades:

“For an EM it's usually all about the carry. So if you can sell USD and buy Brazil and it goes nowhere for a year, let's just say you make 10% on that carry. That's a really good carry trade. So dollar Brazil is going to go up and down. But if you have the view that dollar Brazil is going to go down, it's kind of a free lunch. So like for two years in Mexico, it was basically a free lunch to own Mexican pesos because reshoring was good and that led to a steady and stable carry trade.”

On the impact of this week’s Bank of Japan rate hike:

“They did a hike recently of 15 basis points and they did one of 20 and now the market's expecting 25 and 22bps is priced in.

So then the question becomes this: If this hike is priced in, which it is, what are the signals from the central bank at the meeting? They could hike 15 and just say, you know, they are a little bit scared about market stability because they felt like they blew up the world in August. And because of that guidance paired with so much of the hike already being priced into markets, it could end up being a dovish outcome for the meeting.”

There are many more interesting tidbits in the interview, including a deep dive into how Trump’s tariff threats are impacting FX currencies, so I highly recommend checking it out!

— Felix Jauvin

This March, join leaders from BlackRock to Abra as DAS NYC 2025 brings together the sharpest minds in investing, institutions, and digital assets. Dive into the trends redefining global markets — from macro shifts to the adoption of blockchain in traditional finance.

📅 March 18-20 | NYC

The transformation of finance is happening now. Be part of it.

Almost 70% of yesterday’s 20-year bond auction went to indirect bidders, which is a general proxy for international demand. This is up from last week, which had around 62% of buys from indirect bidders. 

The US senator pushing for a national strategic bitcoin reserve just got a promotion. 

Cynthia Lummis, a Wyoming Republican who has long championed the crypto industry, will lead the new digital asset subcommittee under the Senate Banking Committee. 

Lummis debuted the text for the Bitcoin Reserve Bill last summer at the Bitcoin 2024 Conference in Nashville. She introduced the bill late last Congress but has not yet unveiled an updated text this session. 

The original bill sought to have the US government acquire a total of 1 million BTC — around 5% of the total supply. The bill permits sales of the asset for only one purpose: paying off the national deficit. 

“We will be debt free because of bitcoin,” Lummis said in Nashville. 

Now, with her own subcommittee and Senate Banking Chair Tim Scott’s ear, movement on the reserve could come a lot faster. Speculation that President Trump may create the stockpile via an executive order seems to have dissipated in recent weeks. 

But, it’s very possible we see some sort of presidential action from Trump directing the DOJ to refrain from auctioning seized bitcoin. 

In any case, Lummis seems committed to getting the reserve off the ground in Congress, saying on Thursday that lawmakers “need to urgently pass bipartisan legislation.” 

We’ll be curious to see what the subcommittee selects as its first hearing topic.

— Casey Wagner

While CME Group doesn’t yet have concrete plans to launch XRP and/or SOL futures contracts, the company is certainly thinking about it.

The derivatives exchange launched bitcoin futures contracts in December 2017. It followed up with ether futures in early 2021. Fast forward to yesterday, when screenshots floated around social media signaling that XRP and SOL futures would come next month.

“A beta page from our website was released in error earlier today,” a CME spokesperson told me Wednesday. “Many mock-ups are included in that test environment, and no decisions have been made regarding XRP or SOL futures contracts.” 

This glimpse the company inadvertently gave into possible product plans comes as crypto ETF filings have accelerated in recent weeks. Among them are proposed spot XRP and SOL funds. 

A number of observers have said spot crypto ETF approvals by the SEC — outside of BTC and ETH — could take a while given the precedent of the regulator wanting to first see a regulated futures market. There’s also the fact that the SEC has named SOL a security and is moving forward with an appeal in its case against Ripple. 

Remember, too, that it was years after bitcoin and ether futures existed that ETFs holding those futures contracts came to market. Those notably preceded spot funds investing in those assets directly.

To that point, VolatilityShares filed for a solana futures ETF in December and ProShares followed that up with a similar filing last week.

Then there are Teucrium planned products that would invest in XRP futures. These filings all appear to be bets that a revamped SEC could be more open-minded to such ETFs. We can only wait to see about that.

As we speak of altcoin-focused funds, perhaps it’s worth a quick mention that the Delaware state website shows Bitwise registered a dogecoin trust.

While a Bitwise spokesperson acknowledged the filing, the rep declined to comment further. This isn’t yet a formal product proposal to the SEC, mind you. But it’s yet another indication that we best, as some would say, “strap in.”

— Ben Strack

• BlackRock CEO Larry Fink told CNBC at the World Economic Forum in Davos that he wants the SEC “to rapidly approve the tokenization of bonds and stocks." 

• Morgan Stanley CEO Ted Pick also spoke to CNBC, saying about crypto: “For us the equation is really around whether we as a highly regulated financial institution can act as transactors.” He added that the company would work with regulators to “figure out how we can offer that in a safe way.” 

• Reiterating similar previous comments, President Donald Trump said Thursday he would make the US “the world capital of artificial intelligence and crypto.”

• Asset manager WisdomTree noted in a report that allocating 1% of a multi-asset portfolio to crypto is “the neutral position.” Put another way, such an allocation is “the rational choice for investors without a strong, supported investment thesis against cryptocurrencies.”