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

• US stocks were back in the red on Tuesday. We unpack why. 

• A deeper look at bitcoin’s latest decline as it teeters on a price level to watch.

• Altcoin ETF proposal momentum continues despite market turbulence.

Traders pray for Nvidia boost as stocks dip red

This time yesterday, I was writing about how US equities had started down the road to recovery. 

Well, that was short-lived. 

The S&P 500 and Nasdaq Composite indexes opened in the red Tuesday and were trading 0.4% and 1.2% lower, respectively, at 2 pm ET. 

Big Tech and crypto stocks were not immune. The Bloomberg Mag7 Index, which equally weights seven of the largest companies, was down almost 3% midway through the session. 

Nvidia, on the eve of reporting its fourth quarter earnings, was down 1.9% at 2 pm ET. Coinbase and MicroStrategy were down 7.2% and 12.1%, respectively, at that time. 

We’re attributing the decline to two things: 

1. Investors are worried about economic growth. 

2. Previously paused tariff plans are, apparently, moving forward. 

On this first point, yet another economic report on Tuesday signaled that the US growth outlook isn’t looking stellar. Consumer confidence in February fell by the most since August 2021. The figure, reported by The Conference Board, came in at 98.3 this month. A reading below 100 indicates a pessimistic economic outlook. 

In terms of tariffs, President Trump said late Monday that levies against Mexico and Canada are “on schedule.” He didn’t get specific, but the comment comes a few weeks after Trump agreed to pause tariffs on the countries for 30 days. 

We’ve written before that the market has been (perhaps remarkably) resilient to tariff threats, likely because the policies have so far been vague, both in terms of timeline and details on percentages. Tariffs are still a headwind, though, and today’s market moves signal that the gusts are starting up. 

In terms of more immediate price action, the big market movers this week will be Nvidia earnings (tomorrow) and PCE data (Friday). 

Nvidia, not too long ago considered the golden child of AI, has faltered this year. DeepSeek, the Chinese AI firm that debuted its AI model in January, spooked investors enough to pull almost $600 billion out of Nvidia last month. 

The US chipmaker was able to pare most of the losses, though, and as of midway through today’s session, shares were down only 6%. 

Option chain data shows that many traders remain optimistic NVDA will rally at the end of the week, with calls hitting $145 to $160. Shares were trading at $128 at 2 pm ET. 

In terms of future stock moves, DataTrek Research co-founder Nicholas Colas says to keep an eye on the CBOE Volatility Index (the VIX). 

“We’ll know when stocks may have made a tradeable low if/when the VIX is either very close to 27.3 or above it,” Colas said. “The historical track record of this indicator is clear.” 

This is not trading advice (from me, at least). But here’s the historical track record Colas is talking about: Any value at or above 27.3 (one standard deviation above the long-running average) indicates heightened volatility. Generally, stocks perform well after volatility spikes. 

In mid-December, the VIX hit 27.6 after the Fed cut interest rates by 25 basis points. A week later, the S&P 500 had gained almost 3%. Volatility today is hovering around 19, but a bigger selloff in big tech and/or disappointing inflation data could send the VIX higher.

— Casey Wagner

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This is the correlation between bitcoin and the S&P 500 as of Monday, according to data from Coin Metrics. Remember, a correlation coefficient of 1 means the assets are moving perfectly in tandem, while a negative correlation indicates the opposite. 

Bitcoin’s correlation with the S&P 500 has hovered in the 0.7-range since the US presidential election.

You probably saw bitcoin’s latest price plummet, briefly falling below $86,000 for the first time since November. It comes as the Bybit hack and SEC moves grab headlines — not to mention the relentless non-crypto macro developments.

Even before BTC’s drop, Bitfinex analysts laid out the scene. Bitcoin had mostly traded between $91,000 and $102,000 for weeks, rearing its head to a peak around $109,000 last month.

“Bitcoin remains at a critical juncture after nearly 90 days of consolidation,” they explained. “As market participants await a catalyst, bitcoinʼs next major move will likely be dictated by macroeconomic trends and could be decisive.”

Fast forward a day, and Compass Point analysts Ed Engel and Joe Flynn note that BTC’s latest drop means it has broken the $92,000 support level (the cost basis for holders who bought within the last six months).     

“Selling has accelerated as short-term holders are less likely to tolerate unrealized losses,” they explained. “$86,000 is the last line of defense before the air pocket of trading activity that took place between $77,000 to $86,000.”

BTC’s price hovered around $86,950 at 2 pm ET. That’s down 5% in the past 24 hours. It’s a 9% drop from seven days ago and a 17% decrease over the last month.

Trading volumes remain near year-to-date lows and slightly above pre-election levels, Engel and Flynn added.

CoinShares research head James Butterfill attributed the flow of $571 million out of bitcoin investment products last week to “uncertainty around trade tariffs, inflation and monetary policy.”

The US spot bitcoin ETFs saw $516 million more leave their coffers yesterday, Farside Investors data shows — the highest level since Jan. 8. Those funds have now endured net outflows for five straight days.

Bitcoinʼs increasing correlation with traditional markets has exacerbated this “corrective phase” seen across crypto assets, Bitfinex analysts argue, noting the S&P 500ʼs fall below the 6,000 level.

And if you missed it, Blockworks’ David Canellis took a look at the timing of the last bull market’s 50% correction, and what that could signal this time around. 

— Ben Strack

We’ve rounded up the myriad of crypto ETF plans issuers are dreaming up, and launching.

The proposals continue to move beyond ones focused on solana, XRP and litecoin. 

An update from yesterday: A 19b-4 filing from Nasdaq signals Grayscale Investments’ intent to offer a Polkadot ETF. 21Shares put out a similar proposal a few weeks back. 

Polkadot (DOT) has a market cap of nearly $7 billion, ranking it 26th among crypto assets.  

The filing is not a proposal for Grayscale to convert one of its existing trusts to an ETF wrapper, like it had done with its bitcoin and ether products. That’s because it does not yet have a trust investing in DOT.  

I previously wrote about how Grayscale historically first goes with private placement launches for accredited investors before obtaining public quotations for unrestricted shares and making the products SEC-reporting companies. The conversion to an ETF is the final step. 

Grayscale skipped the initial steps upon filing for a Cardano ETF. Speaking of that product, the SEC acknowledged it in a Monday filing, noting the agency would solicit comments on the proposal. 

The thought is that Grayscale (despite not returning requests for comment) must feel it can take these shortcuts given the evolving regulatory environment.

This comes after Nasdaq late last week filed to list shares of Canary Capital’s proposed HBAR ETF, which hold Hedera's native cryptocurrency. This 19b-4 filing comes a few months after the company submitted an S-1 for the product in November.

So, the momentum around altcoin ETF filings has not changed from when we last checked in. The next one we’ll see is anyone’s guess.

— Ben Strack

• The SEC has dropped its investigation into Uniswap Labs, CEO Hayden Adams said Tuesday. It’s the latest move from the regulator to end Gensler-era enforcement, and we’ll be diving into it in tomorrow’s newsletter. 

• The SEC has a closed meeting scheduled for this Thursday. Commissioners may vote on whether or not to dismiss its lawsuit against Coinbase, according to a list of topics to be discussed. 

• FTX founder Sam Bankman-Fried, who’s currently serving a 25 year sentence for his role in the exchange’s collapse, appeared to post on X for the first time in two years last night. It’s unclear whether the thread, which discussed federal employee layoffs, was posted by SBF himself or someone with access to his account.