Beyond the 'TACO' Trade: Has Bitcoin Moved on From Tariffs?

Summary

Markets Daily Crypto Roundup: Beyond the 'TACO' Trade – Has Bitcoin Moved on From Tariffs?

Released on May 29, 2025 | Hosted by CoinDesk

In the latest episode of Markets Daily Crypto Roundup, CoinDesk delves deep into the current dynamics of the cryptocurrency markets, exploring key developments, market catalysts, and strategic investment insights. Hosted by Jen Senasi and Andy Baer, the episode features an insightful discussion with Fernando Martinez, CEO of Nonco, offering expert perspectives on Bitcoin’s trajectory, Ethereum’s ecosystem, the stablecoin surge, and the evolving crypto landscape in Mexico.

---

1. Bitcoin Market Update

Fernando Martinez kicks off the conversation by highlighting Bitcoin's recent bullish performance:

[00:51] Fernando Martinez: “Obviously BTC has been very strong lately. Right now it's trading at about 10,700. We have seen it uptick up until 11,100.”

Bitcoin approaching its previous all-time high underscores renewed investor confidence. Andy Baer acknowledges this momentum, setting the stage for discussions on other significant market movers.

---

2. Key Market Catalysts

Martinez identifies pivotal assets fueling the current crypto market enthusiasm:

a. Hyper Liquid Hype

Hyper Liquid is garnering attention as liquid funds increasingly invest or monitor this cryptocurrency, signaling potential mainstream adoption.

b. Avalanche’s Strategic Announcements

Avalanche has made noteworthy strides in the past ten days:

[01:36] Fernando Martinez: “Avalanche has announced in the last 10 days two very exciting news. First, the FIFA L1 launch. That's massive. And just yesterday night they announced a treasury deal where they're going to be putting bonds. Let me tell you exactly what it is... tokenizing a $240 billion property deeds that's going to be running on Avalanche.”

The introduction of the FIFA Layer 1 (L1) network and a significant treasury deal involving Bergen County, New Jersey, signal Avalanche’s robust expansion and integration into real-world financial systems.

Jen Senasi expresses excitement, particularly about the New Jersey initiative:

[01:44] Jen Senasi: “As someone who lived in New Jersey, I was very excited about that news.”

c. Ethereum’s Resurgence

Ethereum appears to be regaining its momentum post-PETRA upgrade:

[01:56] Fernando Martinez: “It seems that ETH is finally waking up. Ever since the PETRA upgrade there has been a very positive price action.”

Further bolstering Ethereum's position, Joe Lubin announced a substantial treasury deal:

[02:15] Fernando Martinez: “Which announced a $425 million private equity deal to launch Ethereum-based corporate deals.”

These developments position Ethereum as a resilient and evolving blockchain, countering narratives of its decline amidst rising competition.

---

3. Ethereum Ecosystem and Competition

Jen Senasi probes the sustainability of Ethereum's resurgence:

[02:30] Jen Senasi: “Is it something that's sustainable? Based on your comments, it sounds like your answer is going to be yes there.”

Martinez remains optimistic yet cautious:

[02:56] Fernando Martinez: “We are obviously bullish on Ethereum. It is amongst the safest chains out there. But one thing that has been repeated over and over to us by several funds, it's that it's too big of a market cap for the amount of competitors.”

He emphasizes Ethereum’s need to continuously innovate to maintain its dominance:

[03:12] Fernando Martinez: “So I think ultimately they still need to keep their game face on and make sure that they are competing against the other chains as appropriately as possible.”

A critical analysis highlights Ethereum’s recent $1,000 price surge in May and the underlying factors contributing to its price action, including the closure of Ethereum shorts:

[04:10] Fernando Martinez: “I think that a lot of the funds were actually shorting ETH and longing BTC. They closed the majority of those shorts, as you said, in a timely fashion.”

---

4. Stablecoin Developments and Impact on Layer Ones

The discussion shifts to the burgeoning stablecoin sector and its implications for blockchain infrastructure:

[05:42] Fernando Martinez: “I think the dollar stable coins are taking a big bite at the swift activity.”

Despite stablecoins not always prioritizing the lowest transaction costs, their dominance remains strong, particularly with platforms like Tron and Circle:

[05:50] Fernando Martinez: “The majority of the demand being in tether, specifically in Tron, and in Circle, specifically in ERC. That makes no sense.”

He points out the efforts of other chains like Solana, Base, and Avalanche striving to capture a share of the stablecoin-driven transaction flow:

[06:45] Fernando Martinez: “The other chains right now are putting all of their efforts and resources, like Solana, like Base, like Avalanche, to make sure that they're able to capture this flow.”

---

5. Market Narrative: Tariffs and the 'TACO' Trade

The episode delves into the macroeconomic factors influencing crypto markets, particularly the impact of US tariffs:

[07:37] Fernando Martinez: “I think the market started to kind of like anticipate that. And the volatility or the surprise effect around that, it's not taking a lot of effect right now.”

Martinez introduces the concept of the 'TACO' trade, a strategy betting on the cessation of tariff implementations by former President Trump:

[08:00] Fernando Martinez: “I saw yesterday that there's a trade called Taco. Trump always chickens out.”

This sentiment reflects a diminished market reaction as traders become accustomed to similar geopolitical events, leading to reduced volatility.

Regarding the upcoming options expiration:

[08:40] Fernando Martinez: “I think it's going to be a nothing burger. I would expect bitcoin to continue trading between 10,700 and 11,100.”

He anticipates stable trading ranges with potential for breakout only if significant momentum builds, cautioning against overestimating short-term catalysts.

---

6. Crypto Developments in Mexico

Transitioning to regional insights, the conversation explores Mexico’s vibrant crypto ecosystem:

[10:33] Fernando Martinez: “From a market and investment perspective, it will always be driven by North America, sometimes Asia. It's never going to be the south of the hemisphere. South of the hemisphere will always be more driven towards the real use cases or the benefits that crypto can bring. And that's going to be stablecoins.”

Martinez highlights the critical role of stablecoins in facilitating efficient cross-border transactions:

[11:00] Fernando Martinez: “It will be driven by how you can move money around faster, better, cheaper, and that is specifically around stablecoins with regards to Mexico.”

He notes that approximately 8% of Mexico to US remittances are now powered by stablecoins, a figure set to grow as trade finance demands increase due to nearshoring activities.

---

7. Nonco's Business Strategy and Edge

Exploring the operational strategies behind Nonco’s success, Martinez emphasizes the importance of focusing on stablecoin trends and meeting counterparty needs:

[12:51] Fernando Martinez: “I think that's exactly what gives us an edge. Right. It's not necessarily the settlement, but it's been a little bit more pragmatic as to what gives you the best return for your money.”

He reveals Nonco’s impressive financial health, boasting 40% month-on-month margins, attributing this to their service-oriented approach and technological scalability:

[13:05] Fernando Martinez: “We do about 40% month on month margins. So that's super healthy. If you compare that to against any other trading firm, it is an outlier.”

Martinez underscores the necessity of balancing automation with human oversight to manage risk and make discretionary decisions effectively.

---

8. Investment Strategies in Crypto and Stablecoins

Concluding the discussion, Martinez offers strategic investment advice tailored to the evolving crypto landscape:

[15:02] Fernando Martinez: “On crypto as an asset class, I think it's going to be Bitcoin and an index. Right. City 20 is a clear leader.”

He advises cautious optimism towards stablecoin investments, suggesting a focus on "picks and shovel" companies—those providing essential infrastructure and services supporting stablecoin ecosystems:

[15:38] Fernando Martinez: “If I were to invest in stablecoin, I would take a look at the picks and shovel companies that are out there right now.”

Highlighting recent successful funding rounds, Martinez points to the potential in private stablecoin ventures:

[16:08] Fernando Martinez: “We just saw Felix Powell, I think it raised $75 million on a Series A. We just saw conduit, raised $36 million on a Series A five months ago, was the bridge acquisition.”

This approach aligns with a broader industry trend where venture capitalists are keenly investing in foundational stablecoin technologies, anticipating a stablecoin-driven revolution in money movement.

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Conclusion

Fernando Martinez’s insights provide a comprehensive overview of the current state and future prospects of the cryptocurrency market. From Bitcoin’s稳健增长 and Ethereum’s strategic maneuvers to the pivotal role of stablecoins in regional economies like Mexico, the episode encapsulates the multifaceted nature of the crypto ecosystem. Martinez’s emphasis on strategic investment in infrastructure and service-oriented business models underscores the sustainable pathways for growth and profitability in the rapidly evolving digital asset landscape.

Listeners are left with a nuanced understanding of how macroeconomic factors, technological advancements, and strategic investments interplay to shape the future of cryptocurrency markets.

Transcript

[Fernando Martinez]

There's a trade called Taco Trump always chickens out.

[Andy Baer]

Right.

[Fernando Martinez]

So I think that the market after several events that are similar.

[Andy Baer]

Right.

[Fernando Martinez]

They start to react differently. You're not going to see this go on and on and on forever.

[Jen Senasi]

Hey everyone, you're watching Markets Daily, a show where we unpack everything you need to know about the crypto markets. Let's get into it today. I'm Jen Senasi here with my co host Andy Baer. We are joined by Nonco CEO Fernando Martinez. Hello everyone.

[Fernando Martinez]

Hi Jen. Hi Andy. Thanks for having me.

[Unknown]

Good morning.

[Jen Senasi]

All right, let's talk about what's going on in the markets this morning. Fernando, what are you watching? Anything that you're surprised by?

[Unknown]

Perfect.

[Fernando Martinez]

So I'll give you guys a little bit of color. Obviously BTC has been very strong lately. Right now it's trading at about 107. We have seen it uptick on up until 111.

[Andy Baer]

Right.

[Fernando Martinez]

So that was a previous all time high. A couple of other catalysts that we are keeping an eye on. It's hyper liquid hype right now. That is probably one of the coins that all of the liquid funds are either buying or keeping an eye out for. Secondary we're going to see Avalanche. Avalanche has announced in the last 10 days two very exciting news. First, the FIFA L1 launch. That's massive. And just yesterday night they announced treasury deal where they're going to be putting bonds. Let me tell you exactly what it is. One second. Yeah. Bergen county in New Jersey tokenizing a $240 billion property deeds that's going to be running on Avalanche.

[Jen Senasi]

As someone who lived in New Jersey, I was very excited about that news.

[Fernando Martinez]

Yeah, yeah, us too. And then the fourth one and final one is it's seems that ETH is finally waking up.

[Andy Baer]

Right.

[Fernando Martinez]

Ever since the PETRA upgrade there has been a very positive price action. But I believe that 2 days ago Joe Lubin announced a Treasury deal Right. Where he's going to be joining. What's the name of this company? Give me a second. Yep. Sharply Gaming.

[Andy Baer]

Right.

[Fernando Martinez]

Which announced a $425 million private equity deal to launch Ethereum based corporate deals.

[Andy Baer]

Right.

[Fernando Martinez]

So that is also massive. Those are the three assets that we're keeping an eye out outside of Bitcoin, Hyper Liquid Avalanche and Ethereum.

[Jen Senasi]

I want to just ask a follow up there on the Ethereum ecosystem. I've said this on the show a bunch. There have been a bunch of guests on the show who've said, you know, we might see Ethereum fall into the background. As some of the Ethereum competitors gain steam. Of course, we saw the PETRA upgrade. Ethereum, like you said, has woken up. Is it something that's sustainable? Based on your comments, it sounds like your answer is going to be yes there.

[Fernando Martinez]

We hope yes. Right. We are obviously bullish on Ethereum. It is amongst the safest chains out there. But one thing that has been repeated over and over to us by several funds, it's that it's too big of a market cap for the amount of competitors.

[Andy Baer]

Right.

[Fernando Martinez]

So I think ultimately they still need to keep their game face on and make sure that they are competing against the other chains as appropriately as possible.

[Unknown]

It's interesting, the rally, I mean, ETH added $1,000 to its price during the month of May. That was sudden. I think it was conveniently located next to the PETRA upgrade. And of course the news of treasury companies starting to look into eth, which is not a surprise, is welcome news. But it seems like this kind of came out of nowhere. Right? Petra was not going to be a surprise. I didn't think people felt like PETRA was going to fail. And of course PETRA doesn't really truly address, I guess, eth's more existential problem, which is how to compete when as an execution layer, it faces such headwinds. So are there other catalysts or did the market just kind of decide to, you know, move into eth's house for May?

[Fernando Martinez]

Yeah. So to your first point, PETRA increases Validator Wallet functionality and also performance improvement. I agree with you that it doesn't solve all of its problems. Right. So that's one second. I think that it was a lot of the funds were actually shorting ETH and longing btc.

[Andy Baer]

Right.

[Fernando Martinez]

They closed the majority of those shorts, as you said, in a timely fashion.

[Andy Baer]

Right.

[Fernando Martinez]

So we don't understand what the true catalyst is, but we are seeing a little bit more of an improvement from a price action and inflows perspective. I think that right now it's still too early to say, but we're very excited to see how that community continues to develop and fight towards their number one position.

[Unknown]

Yeah, that's a key point actually for viewers that a short cover kind of fits very nicely with the pattern and the velocity, I guess, of the bounce. So that makes a ton of sense. We, while you guys were over in London, there was a lot of stablecoin stuff going on here in the United States. Between the genius act and this global dollar network event that we were at. And with Circle's IPO and the news that banks are going to get involved in stablecoins. Not only is this great for the government, which has a new customer for Treasuries, but it should be good for layer ones. Right. And Ethan Solana and others should be scrambling to kind of sop up that execution activity. How do you see that playing out?

[Fernando Martinez]

Yeah, I mean, inevitable. I think the dollar stable coins are taking a big bite at the swift activity.

[Andy Baer]

Right.

[Fernando Martinez]

That's happening more and more and more and more. If you're speaking specifically around the chains, I think the competition there is tougher than what people anticipate. If you actually see it's not always about the lowest cost. Right now, Tron moves the majority of the volume and it doesn't have the lowest cost. It's not even the best technology. So I think that there, it's a little bit of a balancing act between how active are the protocols within this stablecoin movement, but also the distribution of that they started to put in five years ago right now has a lot of effects. We are still seeing the majority of the demand being in tether, specifically in Tron, and in Circle, specifically in erc. That makes no sense.

[Andy Baer]

Right.

[Fernando Martinez]

For one or the other, but we haven't seen the change towards other chains that might perform better. However, the other chains right now are putting all of their efforts and resources, like Solana, like Base, like Avalanche, to make sure that they're able to capture this flow.

[Jen Senasi]

I want to come back to the markets of the morning just for a second and get your reaction here. You know, the macro environment tariffs have really been driving the market narrative. Obviously, in crypto and beyond, we learned that a US Court was nixing Trump's tariffs this morning. And I'm surprised that we're not seeing as much of a reaction right now when I look at what's going on with the major caps. What's your read there?

[Fernando Martinez]

I agree with you. I think the first couple of months of the year, it was solely driven by the tariffs. What is Trump going to say? What's he not going to say? He's going to put a tariff in Canada, Mexico, Europe, whatever it is. I think the market started to kind of like anticipate that. And the volatility or the surprise effect around that, it's not taking a lot of effect right now.

[Andy Baer]

Right.

[Fernando Martinez]

I saw yesterday that there's a trade called Taco. Trump always chickens out.

[Andy Baer]

Right.

[Fernando Martinez]

So I think that the market, after several events that are similar.

[Andy Baer]

Right.

[Fernando Martinez]

They start to react differently. You're not going to see these go on and on and on forever.

[Unknown]

We have a big options expiration tomorrow morning. I feel like there's not quite as much loaded up on this one as some of the ones earlier this year. Do you think that this is going to cause some bitcoin volatility over the next 72 hours or is this a nothing burger?

[Fernando Martinez]

I think it's going to be a nothing burger. I would expect bitcoin to continue trading between 107 and 110. Right. If you actually think about it and see the chart, the majority of the activity has been around Asia.

[Andy Baer]

Right.

[Fernando Martinez]

Even for Ethereum and btc, it seems that there's a little bit more upside there. Whereas in the US sessions we have seen some muted activity.

[Andy Baer]

Right.

[Fernando Martinez]

So my take, it's a nothing burger.

[Unknown]

Interesting. Of course, if we look to break out above that kind of 111, 112, you'd expect upside, volatility, buying and new, I guess, range seeking. Right. But all year, or even towards the end of last year, we've observed these very, very tight ranges for a long time, which is interesting. It's an interesting kind of newer characteristic for bitcoin.

[Fernando Martinez]

Correct? Correct. I couldn't agree more. I think obviously we are betting that it's going to break out.

[Andy Baer]

Right.

[Fernando Martinez]

But the last leg up was two weeks ago or a week ago.

[Andy Baer]

Right.

[Fernando Martinez]

So I think that we also need to be a little bit more conservative towards our expectations and also what the market catalysts are. I don't think tomorrow is going to be that answer.

[Jen Senasi]

Fernando, I want to talk maybe a little bit about local community now. You and I were recently in London at the Avalanche Summit. I attended the Avalanche Summit last year, which was in Buenos Aires. You are based in Mexico. We spend so much time on this show talking about what's going on in North America and the markets in North America and how global events impact them. Talk to me a little bit about what's going on in Mexico as it pertains to crypto development and what you're watching there.

[Fernando Martinez]

Absolutely. So I think we need to separate crypto into two.

[Andy Baer]

Right.

[Fernando Martinez]

From a market and investment perspective, it will always be driven by North America, sometimes Asia. It's never going to be the south of the hemisphere. South of the hemisphere will always be more driven towards the real use cases or the benefits that crypto can bring. And that's going to be stablecoins.

[Andy Baer]

Right.

[Fernando Martinez]

So in Mexico, in Argentina, in Colombia, even in Brazil.

[Andy Baer]

Right.

[Fernando Martinez]

It will be driven by how you can move money around faster, better, cheaper, and that is specifically around stablecoins with regards to Mexico. I think it's a vibrant economy right now. Like the community is very, very much active and looking towards how to improve our daily usage of money. Right now we have about 8% of the Mexico to US remittance being driven with stablecoins. And with regards to trade finance which is like 10 times bigger, we're seeing also that optic and that actually started about 18 months ago with all of the Chinese companies that started setting shop here.

[Andy Baer]

Right.

[Fernando Martinez]

So it wasn't that the Mexican community or the Mexican guys started to demand more stable coins. It was actually driven by the near shoring activity that we're seeing here. And if you think about it and you actually start to look into these local markets, it's always that, right. In Brazil, 30% of the imports from China happen on stable coins.

[Andy Baer]

Right.

[Fernando Martinez]

Obviously Argentina, that's a different use case. But Colombia, we see that as well. So the southern hemisphere will always be a little bit more inclined towards how to move money around a little bit more efficient. And how do they have access to the dollar side given the volatility and the inflation around their currencies.

[Unknown]

It's funny, every time we talk, Fernando, you run a trading business and trading businesses like to make money from trading, right. But we end up talking about stablecoins and supporting other currencies and settlements and different chain settlements and moving money faster and operational efficiencies. Is this just your favorite part of the business or do you think that this is what gives non company sort of an edge?

[Fernando Martinez]

I think that's exactly what gives us an edge. Right. It's not necessarily the settlement, but it's been a little bit more pragmatic as to what gives you the best return for your money.

[Andy Baer]

Right.

[Fernando Martinez]

We do about 40% month on month margins.

[Andy Baer]

Right.

[Fernando Martinez]

So that's super healthy. If you compare that to against any other trading firm, it is an outlier. And the reason that we are able to perform like that is because we're solely focused on the trends and the counterparty needs. If you think and you position yourself as a service oriented company, how can you service your counterparts and the industry better then it will result in scalability. You cannot scale without technology. It doesn't matter if it's markets or it's stables. It's about how do I make sure that our operation can do more faster and better and more consistent human elements. It's never going to be the answer.

[Andy Baer]

Right.

[Fernando Martinez]

You do need of course the complementary of a human to manage risk, to make discretionary decisions.

[Andy Baer]

Right.

[Fernando Martinez]

But ultimately if you want to do something A thousand times in a day. You gotta scale it. Okay, so that is what gets me most excited about. How can we grow as fast as possible with the least humans available?

[Andy Baer]

Right.

[Fernando Martinez]

And leverage our technology.

[Unknown]

I love hearing this and many of the viewers are fanatically interested in the development of payment technology, but a lot of folks just want to know, outside of Bitcoin, of course, we love that. The idea that people would just buy indices to allocate to the rest of crypto and not time the markets and not, you know, try to select individual tokens, but get growth. But if we wanted to go more active and say, like, if payments and stablecoins and user experience and ease and things like that are going to really proliferate and enjoy US regulation and just start to really take more shape, what should people think about or what kind of name should people look at? Is it the layer ones, is it other infrastructure names to see the uptake, to see signs of momentum there?

[Fernando Martinez]

Yeah, that's a great question. I agree with you. So let's say on crypto as an asset class, I think it's going to be Bitcoin and an index. Right. City 20 is a clear leader. When you start to take a look at stable coins, it's not like you can invest well, probably you're going to be able to invest in circle.

[Andy Baer]

Right.

[Fernando Martinez]

But outside of that, how do you get an upside? I don't think that it's going to be necessarily by investing in the L1s, because the L1s have a lot of focuses. Sure, stablecoin is one of them, but it's not going to be everything.

[Andy Baer]

Right.

[Fernando Martinez]

So if I were to invest in stablecoin, I would take a look at the picks and shovel companies that are out there right now. The majority of the deals are being on a private level.

[Andy Baer]

Right.

[Fernando Martinez]

But the VCs are definitely focused on it and they have specific funds allocated for that. We just saw Felix Powell, I think it raised $75 million on a Series A. We just saw conduit, raised $36 million on a Series A five months ago, was the bridge acquisition.

[Andy Baer]

Right.

[Fernando Martinez]

So my gut feel would be you gotta invest on the picks and shovels because that's what's going to be replacing the traditional money movement system. Now, right now it seems that everybody's playing the spray and pray game as they understand that this is definitely something that will revolutionize and will continue growing. But who's going to do it? How many are out there? That's where it gets a little bit tricky, right? If you invest in the old ones, I don't know if it's going to be a direct correlation towards the usage of stablecoins.

[Unknown]

That's a great answer.

[Jen Senasi]

Yeah, that's really interesting. And I guess a parallel conversation I've had with several VCs over the past few weeks is similar. They're looking at equities that are best positioned to benefit from the stablecoin boom that is inevitably coming. So that that is a if you.

[Unknown]

Have the CEO of a public token trading platform telling you to look at privates, you know, he's not talking his book. So it's a credible statement. It's a credible statement.

[Jen Senasi]

All right. Maybe we leave it on that note. And he Fernando, thank you very much for joining Market Staley today. As always, it has been a pleasure.

[Fernando Martinez]

Thank you, Jen. Thank you, Andy. Ciao.