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

• Felix unpacks why it might be time to get out of US-denominated assets.

• Coinbase is deepening its relationship with another stablecoin issuer.

• A crypto market structure bill is back on the House agenda.

Trump is telling you to sell US assets

It’s clear at this point that one of the Trump administration’s primary goals is to lower trade deficits with other countries, specifically goods trade deficits.

It’s important to make that distinction because, in fact, the US runs a services surplus!

The US mechanically imports “stuff” from other countries that manufacture it both better and cheaper. And as the reserve currency of the world, US dollars flow into those other countries to fund those purchases.

Those foreign dollars then get reinvested and held in US-denominated assets such as Treasurys and US equities. This mechanical demand has created an artificially strong US dollar for many decades, paired with a hollowing out of the US middle class whose manufacturing jobs have been offshored. 

Effectively, the grand tradeoff in globalism has been access to cheap “stuff” but a hollowing out of that once-strong manufacturing base. 

One of the great laws of (economic) nature is the balance of payments equilibrium. Mechanically, that currency account deficit (stuff coming in) must be offset by a capital account surplus (money going out to pay for the stuff coming in).

This structural capital account surplus that’s held for many years has resulted in a structural bid to US denominated assets. That has led to mechanically lower Treasury yields (lowering borrowing costs for the government) and higher multiples on US equities relative to other countries (a P much greater than E, in a typical P/E ratio). 

The Trump administration has been loud and clear that it wants to decrease the current account deficit. Although it doesn’t speak this second part as loudly, that comes with a lower capital account surplus that would reverse that trend of lower bond yields and higher equity multiples. Effectively, the Trump administration is telling foreigners to take their money and bring it home. 

Foreigners aren’t wasting any time getting to work. This chart from Brent Donnelly showcases how all the action in selling those US-denominated assets is happening during the market sessions of those foreign countries. During the NY session, US dollar performance remains steady. However, during the Europe and Asia sessions, it's a race for the exits.

It is rational for foreign asset managers to exit these assets if the capital account premium baked into US assets is being questioned. It would lead to higher bond yields and lower equity prices.

Effectively, the world needs to reprice the US Treasury yield that is the bedrock of nearly all global relative valuations with a risk premium in it. My terrible attempt at Photoshop (I’m a trader, not a designer, okay?) showcases this mechanic below:

How durable this unwind of the current account deficit will be remains to be seen, but by all accounts, it means one thing: Get out of US-denominated assets. 

The president of the United States is basically telling you to.

— Felix Jauvin

Markets Don’t Build. Builders Do.

Permissionless IV isn’t about momentum trades or macro predictions — it's about what’s already being shipped by the people rewriting crypto’s foundation.

Infra. DeFi. Consumer apps. Modular design.
This is where the next cycle gets built.

Hear from:

• Hayden Adams (Uniswap) on what it takes to build at scale.

• Jesse Pollak (Base) on bringing crypto to millions — without compromising what matters.

• Kain Warwick (Infinex) on where DeFi goes next.

• Mert Mumtaz (Helius) on what real infra looks like under pressure.

📅 June 24–26 | Brooklyn, NY

The size of the micro-sized XRP futures contracts that CME Group intends to launch on May 19. Market participants can opt for a larger-sized contract at 50,000 XRP.

These cash-settled futures would join the company’s BTC and ETH futures and options. The derivatives marketplace introduced SOL futures last month as well.

What these updates mean for the possible approval of more spot crypto ETFs remains to be seen.

Coinbase was pretty frank in its blog post earlier today.  

“Our relationship with PayPal will take the payments revolution forward,” it stated. 

You might recall that PayPal launched its PYUSD stablecoin in August 2023. This morning, Coinbase said it would waive fees on USD-PYUSD conversions and expand support for stablecoins to PayPal's largest merchant partners.

It’s part of the crypto exchange’s wider goal of “promoting broader adoption of faster and more efficient financial services.”

This isn’t Coinbase’s first partnership with a stablecoin issuer. It acquired an equity stake in Circle in 2023, and earns interest income on its USDC reserves. Coinbase’s stablecoin revenue amounted to $910 million in 2024 — up 31% from the year prior. 

Free global USDC transfers are available on Coinbase’s layer-2, Base. The company noted in its February shareholder letter: “Stablecoins have found market fit…reinforcing their role as a cornerstone of the onchain economy.”

A Coinbase spokesperson clarified to me this morning that this PayPal link-up does not change its existing relationship with Circle. 

“Instead, it pushes the entire stablecoin ecosystem forward,” the rep said. 

The big potential for stablecoins (currently sporting a ~$230 billion market cap) and the broader tokenization space are well documented. We’ve mentioned them in the last couple newsletters, in fact. 

When I asked for more details on how Coinbase expects to collaborate with PayPal going forward (as mentioned in the blog), the spokesperson wasn’t super specific. 

Essentially the exchange looks to allow stablecoins “to be integrated into a wide range of decentralized financial and payments applications directly on blockchain networks.”

More updates on those initiatives are set to come “if regulatory conditions permit,” the spokesperson added. So Casey’s DC update below is especially apropos.

— Ben Strack

While stablecoin legislation has dominated recent headlines, House Representatives are in the final stages of drafting a crypto market structure bill, according to people familiar with the matter. 

I’m told that the discussion draft is expected to be released by the end of the month. The timeline aligns with President Trump’s goal of having both stablecoin and market structure bills passed by the end of this summer. 

Representatives will likely pull from the Financial Innovation and Technology for the 21st Century Act (FIT21), which the House passed last Congress. FIT21, among other things, sought to make the CFTC the primary regulator for digital asset spot markets, shifting authority from the SEC. 

FIT21’s passage was largely celebrated — even by some members of the industry who were not completely on board with details of the legislation — for being the first digital asset legislation to make it through a chamber of Congress. With bipartisan support, we might add: 71 Democrats voted in favor of FIT21. 

The House Financial Services Committee’s Digital Assets Subcommittee and the House Agriculture Committee each held hearings on crypto market structure earlier this month. Conversations focused on how best to divide authority between the SEC and CFTC.  

The STABLE Act in the House and the GENIUS Act in the Senate both await further action. Each bill passed their respective committee markups but neither has been scheduled for a floor vote. The two pieces of legislation are similar, although the GENIUS Act grants state regulators more authority over stablecoin issuers.

— Casey Wagner

• Durable goods orders, which measure purchases of big-ticket items like aircrafts and appliances, were up 9.2% in March — crushing projections of a 1.6% increase. The figures signal that businesses were looking to frontrun tariffs; the Census Bureau cautioned that the surge is unlikely to continue past March. 

• Casey is in DC through the weekend to meet with policy sources and attend the White House Correspondents Dinner. If you’re around and want to say hi, reach out!