This is NOT investment advice.
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Tug of War Welcomes Back Trade Policy Uncertainty . . . . . . And a Wild Card
Bitcoin sits just above the 103Kish level. S&P 500 closed the week at 5911, just above the 5900 level. Coincidence?
Not seeking to add to any negative oriented projections about the markets and the economy – though we may be welcoming back the significant factor of Policy Uncertainty, specifically related to Trade. To wit - POTUS announced doubling steel tariffs on Friday night after the Friday AM China news.
Several weeks back in these publications I warned multiple times about a weakening economy (based on a variety of factors), the looming and inevitable math problems for the bond market, and the ‘Melt Up’. Additionally – when Tariff Mania appeared we discussed how the real objective was China primarily and the EU after that.
A few months later and it appears to me at least that ‘deals will be made’ with several important trading partners (such as Japan and India) while the EU and China still remain unresolved. Yes, there was much celebration about a “trade deal with China” but now we hear about China violating the agreement (according to the U.S. viewpoint) and America placing new restrictions on certain Chinese tech imports. Violations of agreements supposedly made and new restrictions sound to me that at a minimum we have more uncertainty forthcoming with this factor facing the markets. POTUS also has Section 899 et al just in case (if it makes it), and May saw record tariff revenue for America. Note as well how much emphasis was placed on “getting the deal” versus the brief and less emphasized focus on Bessent saying the talks have hit some issues and POTUS saying China violated the agreement. If anything this seems to me it would embolden the administration to be more aggressive seeking its objectives.
Not calling doom and gloom, just sensing some potential hurdles.
Wild Card – Russia and Ukraine keep talking about peace but missiles keep flying and deaths keep mounting. Nukes have already been threatened. This is a very wild Wild Card. Again – another issue “that was resolved” with the decision makers yet still remains very much so unresolved.
Tug of War – the ‘Melt Up’ takes on bond math, trade policy uncertainty, and the so called “peace deal” in Ukraine that never seems to actually bring peace . . . . . among other things. Again – not trying to raise fear but simply trying to be rational. Senses are telling me policy uncertainty may be far from over with respect to China and the EU, and though the Peace Dividend is surely on its way don’t go checking the mailbox for the checks anytime soon. Ultimately the 'Melt Up' quite likely has more power and force behind it, but how many exciting skirmishes are left along the way?
Bitcoin Weekly
Again - note increased pressure on the weekly and the Green Money Flow getting pinched even more, not surprising with the recent price action.
Bitcoin Daily
Liquidation Heat Map - 2 Week Time Frame
Bitcoin Bottom Line
- Bitcoin, like Gold, has made a recent new ATH . . . . . . . . . not an insignificant difference that both the Nasdaq and S&P 500 have not, who's leading who here?
- Bitcoin had an excellent setup and chance to really run (that break of 103Kish and weekly momentum building, etc.), but it did not. It has been rejected on this first attempt up at these levels.
- Market very clearly emphasizing the importance of the 103Kish area, got above it with a beautiful setup behind it and did not launch vigorously past the previous ATH (though it made a new ATH), now testing back to it
- Perhaps worth considering, although BTC has shown very impressive 'flex' away from QQQ and the Risk On/Off dynamic, by no means are we in a state of zero correlation. Is Spoos waiting for BTC to move or is BTC waiting for Spoos to move?
- Plausible that this test back to this 103Kish area ends up as a very bullish retrace and fuel for later
Risk On/Off
If Spoos was fiddling much more with 6000 than it has been with 5900 . . . . . . . then I might be leaning more bullish in the very short term (and prepping to ask TiNA for forgiveness – again). Obviously prancing around inside this zone, senses still leading me towards the focus remaining on the S&P 500 for signal and direction. It’s a broad based and very recognizable index with ES being the tip of the spear for Risk On/Off. ES spent some time in the overnight sessions above 6000 (ultimately sizzled and fizzled out) and some time below 5900 during regular trading hours. Yet – here we are still.
Feels like I could easily challenge both a steadfast Bull and a steadfast Bear. Why isn’t the S&P breaking above 6000 when it obviously has had so many chances to do so? Conversely, why isn’t the S&P breaking down below 5900 when it has had so many chances to do so? The market loves to inflict as much pain as possible on as many participants as possible.
The JGB 10YR is 9 basis points from breaking arguably a little triple top formation and reaching a whole new level of price discovery, though bond VOL as of Friday's closing isn't necessarily indicative of that at the moment. With a strengthening economy and inflation and BOJ trying to talk hawk (and dove) and with everything else going on globally with yields . . . . . . is it crazy to think JGB 10YR dumps further and yields make new highs? Time will tell.
10YR Gilts about 30 basis points from finding a new level of price discovery:
Gross Leverage nearly off the charts as it has clearly come roaring back . . . . . . . . . . . . . so levering up an already levered long status is the next impulse higher? Hmmmmm.
SPY 4HR
Upside energy fading for Japanese banks as Nikkei drifts slightly higher:
Bottom Line for Risk On/Off - let's see how the market reacts to this latest ramping in Trade Policy uncertainty. My stance is still leaning in a broader sense in favor of the 'Melt Up' but seeing no reason to chase since the price/volume is not showing me that. On the hunt for solid entries but in no rush to move simply to make a move.
Bitcoin As Collateral Only Helps NGU Tech
Think about it . . . . . . . if BTC is “locked up” as collateral, then it can’t be sent to an exchange and sold into the market (assuming the lender is a legit good actor and not nefarious). If individuals and businesses allocate certain amounts of Bitcoin as collateral and they like doing so, then this could persist for a very long time. Remember, we live in a credit based society. Status as Pristine Collateral only enhances the Store of Value use case – they scratch each other’s backs.
Themes From The Bitcoin Conference
Outside of product and development, there was certainly a very big American and policy related theme at the conference. This was perhaps the biggest overall theme kind of hovering above everything.
Mining had a huge presence which was obviously expected as it’s a huge industry and a major component of Bitcoin. Beyond that – what jumped out at me was the blending of the old and new and “doing stuff with Bitcoin” such as using it as collateral and DeFi. I’m not vouching for or against any vendors in particular, just reporting themes.
There was a lot of activity blending the old and the new if you will. Rumble, RobinHood, and the Gemini Credit Card (Gemini seemed to want the entire focus on their credit card which is a TradFi/NewFi play if you will) I would say all had a very significant presence. Video/Social and TradFi trying to ride the Bitcoin train is how it looked to me. There were multiple entities working on lending with BTC as collateral and “Bitcoin DeFi” stuff so to speak.
I was surprised, but perhaps because I never looked, at how robust and extensive the Bitcoin community around art and merch is. There was quite a bit of Bitcoin art/culture on display and merchandise to buy if one chose to do so. Struck me how much was there. Plenty of faces one may have seen on YouTube as well in the facility.
Ross Ulbricht Message
Freedom. Decentralization. Unity. I thought it was an incredible presentation. Seemed to me he may have wanted to thank people even more but emotions could have become too much to overcome. He kind of reverse engineered it. He’s out because the people demanded freedom, justice for an excessive punishment et al. Freedom is so central to Bitcoin. We have a choice and anyone can choose to use Bitcoin. Stay decentralized as we are much stronger that way. Stay unified as the opponent wants us divided. There was much more and I am in no position to speak for him. I thought it was an incredible way for the conference to wrap up. Ross took BTC from Zero to 1. He proved it could be a monetary network where people would voluntarily transact among other things. Ross shared how Bitcoin went from 1 to 10 while he was locked up and now it’s time to go from 10 to 100.
Pakistan Jumps In
Pakistan, a nuclear power, plans to create a Strategic Bitcoin Reserve. Game theory.
State of Lightning in Asia
Lightning News provided a very helpful guide on the status of the Lightning Network and Bitcoin in Asia in 2025.
Tether Talk and Lightning
For years I didn’t completely ignore Tether though I put very little effort into keeping up with the details. Over the last few years I came to realize how Tether truly is shooting for the stars. They didn’t provide capital to Rumble without having a reason for doing so. Perhaps they see even running #2 to YT is a very lucrative opportunity over time. They aren’t holding Bitcoin and Gold for no reason. The session conducted by the CEO of Tether was very interesting.
The Tether CEO talked through why they decided to go with the Lightning Network with USDT for the long haul. He kept emphasizing how the only way he saw Tether being able to scale was to get away from the limitations of a solution such as TRON and to get on top of a P2P network. He didn't want to rely on anything that is "single use state". This was the main reason according to the CEO.
Beyond the Lightning Network – the presentation walked through a few of Tether’s efforts with AI Agents, mining, and more. Tether wants to become the biggest miner in the world and said mining's main objective for them was to protect the 100K stack. For their QVAC AI Agent project, the agents have a Bitcoin/Lightning wallet.
Mining Update
Long UVIX. Long USD hedges. Yes, still short Nikkei. I realize the Nikkei has been inching higher. It's a hedge. JGBs can tip of a Risk Off move and impulse for liquidity (sell BTC since it's arguably the most liquid asset 24/7/365) spillover to equities Nikkei gets hit can serve as a hedge.
If Bitcoin breaks decisively below the all important 103Kish level here after setting a new ATH, then I will very likely be entering a fiat based net short on Bitcoin as a hedge.
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