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Cryptocurrency News Articles

Last week, with tariffs looming and macro uncertainty unresolved, the move upward felt more like wishful thinking than fundamental confidence.

Apr 05, 2025 at 12:30 pm

This editorial is from last week's edition of the Week in Review newsletter. Subscribe to the weekly newsletter to get the editorial the second it's finished.

Last week, with tariffs looming and macro uncertainty unresolved, the move upward felt more like wishful thinking than fundamental confidence.

Last week, we discussed the question of whether tariffs are priced into the market.

This editorial is from last week’s edition of the Week in Review newsletter. Subscribe to the weekly newsletter to get the editorial the second it’s finished.

Last Week The Question Was: Are Tariffs Priced In?

Crypto markets are currently performing relatively well, although there is still an air of fear. The most likely explanation for this dynamic is that market participants have priced in certain risks such as tariffs and global tensions, but macroeconomic uncertainty still remains.

The fact that markets are doing relatively well now can be attributed to markets pricing in the bad news, which adjusted forward expectations downward. Having taken into account those adjustments, and with most economic indicators still positive, it makes sense that markets can continue on an upward trajectory. However, uncertainty hasn't been fully priced in.

First and foremost, next Wednesday’s Liberation Day, the day Trump’s reciprocal tariffs are set to begin. Will other nations blink, will Trump, how big will the tariffs end up being? All of these add to the uncertainty.

Next week, I hope the tariff situation is resolved relatively amicably. But if it isn't, one interesting question I’m curious about is this: if the tariffs turn out worse than what market participants have priced in, will traditional U.S. markets suffer more than bitcoin? Typically, bitcoin (and crypto) performs worse, or at best the same, during traditional market drawdowns.

However, some of the people I follow are saying that this time might be different. First of all, bitcoin has corrected harder than U.S. equities, peak drawdown was 30% to 10%, respectively. U.S. markets have seen money withdrawn from America to local markets, which have experienced increases. Further tariff problems, coupled with a belief that U.S. equities are overvalued and locals undervalued, might see this flow out of the U.S. continue or accelerate. Meanwhile, it seems reasonable to assume that bitcoin, a global asset, would be less affected by this. Finally, America is in the midst of tightening, whereas other countries like Germany and China are easing. As a global asset, bitcoin is much better situated to absorb some of that liquidity than U.S. equities.

All of these points are logical and quite persuasive, but I ultimately disagree that bitcoin will float if U.S. equities tank for the simple fact that, “the market can remain irrational longer than you can stay solvent,” as Keynes famously said. I believe markets will act irrationally. If U.S. equities fall, bitcoin falls the same amount or more. Graham Stone said on this week’s Token Narratives that if this happens, “buy bitcoin with both hands.” I concur!

That is all short-term talk. In the mid to long-term bitcoin seems exceptionally well positioned for price appreciation. This week was full of bullish news around the theme of companies starting to put bitcoin on their balance sheets.

When Saylor first started snapping up BTC via his company, formerly known as Microstrategy, it led to a significant bump in the stock price. Many speculated at the time that eventually, Microstrategy’s success could lead to a new playbook for companies— especially companies with fading relevancy.

We finally might be seeing companies pile into this trade. Metaplanet, a Japanese hotel developer that bought its first bitcoin less than a year ago on April 8, 2024, has seen its stock price soar more than 2,300% since that date. With its latest purchase on Monday, it now holds 3,350 BTC. The CEO posted on Monday on X in Japanese, “Today, the company recorded a record high trading value of 50.4 billion yen. It is ranked 13th in terms of trading value in Japan, surpassing Toyota, which has the highest market capitalization.”

On Wednesday, Gamestop announced it is raising $1.3 billion to begin its Bitcoin treasury strategy. It is raising money despite holding $4.76 billion in cash, which mirrors an aggressive, Microstrategy-style playbook. Saylor responded to the announcement by posting a poll on X suggesting Gamestop should buy over $3 billion in Bitcoin to earn BTC legitimacy. Stay classy Saylor!

Also this week, a French Bitcoin Treasury Company bought 580 BTC, and earlier this month Rumble bought 188.

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