Are Trump’s Tariff Threats Bullish for Bitcoin? | Macro Mondays

0:00Hey guys, before starting this show, I just want to take a minute to talk about our good friends over at Bitwise, the 10 billion dollar global crypto crypto asset asset. On this show, we talk a lot about all the big stories. What's driving markets? What does the data tell us? What are you people missing? And as you already know, crypto is playing a much bigger role in macro. So it's becoming more and more important to really understand the stories driving crypto. Why is Bitcoin going up? Why is Bitcoin going down? What are the institutions doing? What are people missing? That's why Bitwise launched the weekly CIO memo, a quick summary each week of what's really moving crypto markets.

0:33It's written by their CEO, Matt Hogan. And that's one of the best in business at bridging the worlds of traditional finance and crypto. It's really a great read. It's clear, it's bold, and it's very thoughtful. I highly recommend it to anyone who wants to do the latest insights and hardest takes in the crypto world. So head on over to bitwiseinvestments.com slash CIO memo. That's bitwiseinvestments.com slash CIO memo. Check it out for yourselves. Always, of course, carefully consider the extreme risks associated with crypto. Today's video is sponsored by VeChain. the leading layer one built for real-world adoption.

1:06VeChain launched all the way back in 2015, built for real-world utility before most people had even heard of blockchain. One of the oldest protocols and boasting 100 % uptime since launch, it's known for powering real-world solutions and partnerships with global brands like the UFC. Now, they're entering a new user-focused chapter powered by adoption in the VBetter ecosystem and an ambitious technical roadmap dubbed the VeChain Renaissance. Renaissance builds on VeChain's history of real utility and adoption to deliver a faster, more flexible core protocol designed to meet the needs of builders and drive mass adoption.

1:49The next phase kicks off on July 1st with the launch of Stargate, VeChain's new staking program. It's an evolution that brings VeChain closer to delivering its vision of a world powered by Web3 without compromising on reliability or stability. The future is here and it's scalable, sustainable, and evolving with purpose. Check the links in the description to find out all you need to know about VeChain Renaissance and the updated staking opportunities available through Stargate.

2:26Hello there. Welcome to another edition of Macro Mondays. This is the last show before we embark on a short summer break. I'm recording from home this time and not from our offices. But you're working, busy being in the office. Andreas, welcome to the show. Thanks very much, Mikkel. Yeah, final day at the office here for me before flying to Southern Europe. And for those of you familiar with the Southern European Wi-Fi connections, we cannot guarantee a live show out of Portugal or an island in Italy or whatever. So that's why we're recording up front here. Yeah. I'm technically going to Africa, the Canary Islands.

3:06So that might be even worse, even though usually it's quite decent. So, Andres, that's why we're recording this a little bit in advance. To be completely transparent, we're recording this on Friday. So if things turn south over the weekend, you'll know why. that we'll probably do another show, whatever. But anyway, Andreas, we are officially in the banana zone. Things started to move yesterday. I don't know if we are at that exact point, as you see here in the banana zone. But what do you make of it? Bitcoin just going above 118 at 117 right now. Might be even more when you listen to this. What's your overall thing on this, Andreas?

3:46Was it exactly a week ago where we talked about a different banana wiggle? And I'm actually a little bit surprised by the timing. I'm not surprised by the direction of travel. I'm not surprised that we're going higher through July. It's been, you know, well flagged by us and several others here at Real Vision. But why did we suddenly break higher Thursday, Friday? Maybe the first catalyst was actually the 50 % terrorist threat versus Brazil. You know, at least it coincided that big spike in Bitcoin Thursday with that announcement. And does that make sense to an extent? Yes, sure it does. Because, you know, from what we can gather from various flow statistics and holding statistics, if you're a millionaire or even a billionaire in Brazil, Mexico, or other land-am countries, you're very, very inclined to be a Bitcoin holder.

4:49older um fair point and obviously we saw a big response in the um brazilian real uh to this 50 terrorist threat so this is a way of protecting your wealth as a latim um yeah wealthy uh millionaire billionaire whatever so i actually think there is some some merit to the view right now that there is a connection between tariffs and bitcoin um and it's kind of odd but i have to say it like this. You know, maybe tariffs are even slightly bullish for this case, at least if tariffs target countries where you're inclined to buy, for example, Bitcoin as some sort of monetary hedge. Yeah. So even my struggling pepper holdings are looking very, very good right now, Andreas.

5:37So a very, very great start to this vacation. We're going to talk much more on tariffs. We're going to talk a little bit about Russia. We're going to talk a lot about China. You had some interesting takes there I want to bring up, Andreas. But first, let's go through some of the laughs and hot takes that we've encountered on the week in Macro Andreas. Obviously, this is just a classic. But you feel it when you work, as we do, across continents. We have partners with Real Vision in Asia, Europe. You just feel this. This is so true. I mean, the European out-of-the-office, I'm awake, coming for the summer.

6:11Please email back in September. That's the feeling you get sometimes, that people are off during July and August. whereas Americans, I mean, we discussed this with our great producer Brian here at Real Vision that we were going to take one week off here and he was shocked almost. So that's just a huge difference and this is very, very true. We're taking one week off, so we're not going all European, but yeah, still a little bit of a vacation there, Andreas. And then another topic that hit this week, and I don't know if there's a macro angle to this, but it was just too funny, Andreas. Grok, the big AI gambler from Elon Musk, went Nazi essentially.

6:55Mecha Hitler. It started praising Adolf Hitler. It started pushing conspiracy theories left and right. There's actually a precedent to this. Did you know that? I may have told you the story before. Have you ever heard about Microsoft T? No. No. Back in 2016, Microsoft tried to launch sort of a very early large language model that operated on what was then Twitter. So it would engage in discussions with users completely AI-driven, pick up on people's inputs, etc., and sort of develop from there. And within 24 hours, Microsoft T had turned into a fierce Nazi as well. I brought some stuff along here.

7:42Did the Holocaust happen? No, completely made up. Do you support genocide? I do indeed. So this was back in 2016. Nine years ago, the first attempts at sort of an AI-driven grog, exactly the same thing happened, turned completely Nazi. I don't know what to make of this. We're still a couple of years away from AI taking over the world, hopefully. But Mikkel, I think this is, isn't it a testimony to what's called a Godwin's law? that, you know, the longer an online discussion grows, the probability of some sort of comparison to Hitler or Nazis approaches one. That is Godwin's law. And if you look at, you know, Reddit and various commentary sections across the board, it doesn't take that long for someone to bring that up.

8:34Absolutely. So, you know, if your model is trained on you know, commentary threats on X, I get why it turns into a... And that's at some point. Never mind. It is obviously amusing and something that they'll have to deal with fairly fast given the valuation, the price point of XAI. Yeah, yeah, absolutely, Andreas. So, head to one of the hot takes. I want to get your take on this, Andreas. This is from Spencer Hakimian on X. He noted that Nasdaq futures started aggressively selling off at 7.52 p.m. Then Trump announced, and we'll get back to the contents of this announcement, new tariff levels or threatened new tariff levels at 8.06, so 14 minutes later, and Nasdaq bottomed off at 8.10.

9:30And was Pete Hexeth live trading what you make of this? Is this just a coincidence? I don't know whether they have a signal threat with these warnings as well. I honestly think, Mikkel, that we have quite a few clues of front running of various political messages from the Trump administration, not least in crypto space. which is also why i'm still fairly comfortable with the outlook given that you know bitcoin crypto is doing much better than equities as we speak so i think there is some merit to this view i think it's the first time that we actually see it to any major extent in the big equity indices we've seen it in in crypto for example on the day where the b2 bombers headed to iran we had a steep decline all the way from the morning in eth sui etc and in my opinion it was you know pretty decent hint that someone knew and obviously a lot of people were in the know um i don't know what the petex had texted a journalist this time around but i i i have to admit that this is something that you just have to for some reason accept as a reality in u.s politics it's not like the democrats were any better um and yeah you know how nancy has been one of the better traders in recent years as well so yeah i i it it's it's it's one of the things that i will and as a european I'll never learn to understand this conceptually.

11:19Because if this had happened in Northern Europe, we would simply have thrown people out of office. Absolutely. That would have happened. Yeah. Absolutely. And I mean, still as an investor, the fact that this is going on to whatever extent it's going on gives me a lot of comfort because all of these guys are holding a major crypto holders. So this gives me a lot of confidence that if things turn south for Bitcoin, etc., you have a lot of holders in government willing to back that. Okay, Andreas, let's move on to some of the charts of the week. Should we take the China story that you posted, I think it was yesterday?

12:03Yeah, so, I mean, we've obviously had these almost cry wolf stories out of China quite a few times since the autumn of 2024 related to stimulus and debt issuance aimed at underpinning the property sector and all of that. I think there is finally some merit to that story now. And why is that? Well, if you look at the backdrop from a macroeconomic perspective now in China, we're in a much better place when you look at key variables that they track in financial markets. So if you're the Chinese Politburo or the Chinese central bank and you want to stimulate, you obviously dislike if the dollar is very strong going into such a stimulus package.

12:59as if you know a stimulus package will most likely on the margin weaken your currency right because you issue more debt than you print and when the dollar traded at 7 30 versus the yuan and the central bank had to intervene daily you don't have a lot of leeway to stimulate really because the currency is too weak already and now the dollar is the weak part at least it's been you know trending uh weaker and weaker and weaker since new year's more or less and that's a game changer for china because it actually allows them to stimulate without compromising the fx question and i think that is one of the you know main takeaways for the second half of the year that china is now in a position where it can actually stimulate and given bond yields um they're already trading at very low levels in China, they have plenty of room and it's not even expensive for them.

13:58So I think that could be a major story for the second half of the year, Chinese stimulus, meaning that you can buy industrial metals linked to the Chinese cycle and all of that. We have the chart here we can just show on iron ore, I believe it is, the commodity, breaking out of the wedge, she described it. Are you looking at the commodity or the miners What are you looking at? I think iron ore is a super interesting case. We obviously also had the tariffs case on copper, leading Comics Copper to explode to the upside last week. One that we flagged for the pro subscribers at Real Vision and made people a truckload of money on that trade.

14:39I think iron ore is the next trade here in relation to the business cycle. Broadly speaking, commodities will do very well in this kind of environment. And, you know, we're in that phase of the economic cycle where technology and commodities can do well in tandem, which is, you know, slightly counterintuitive, but you can get that kind of scenario when you go from a contraction to an expansion in the manufacturing sector. And that's, you know, exactly the crossroads we're at. Christoph, great analysis here. You can check out the full-fledged analysis piece with the Real Vision Pro subscription at Real Vision.

15:25So, Andreas, I just want to move on to going back to Trump, obviously. That is the nature of the show, I guess, Andreas.

15:36We touched a little bit on his announcements on the tariffs issue that caused a lot of movements in markets on Thursday and Friday here. Trump threatened a 35 % tariff on some Canadian goods, also threatening increased blanket tariffs on the rest of the world. This comes on top of the announcement or the indications of massive tariffs on copper, etc. So has Trump just restarted this whole trade discussion? Because I thought we had put this to bed, to be honest, Andreas. Well, to some extent, yes, obviously. and you know i'd like to start with a few very simple conclusions on this we just talked about china and their ability to stimulate i think china is one of the few countries that shouldn't be overly scared of this reignition of the trade war and simply since they figured out that they had uh quote unquote an an ace in the negotiations with with trump and the u.s uh given these rare earth exports to the u.s you know i i think that was a part of the reason why trump folded against china that he got calls from executives right left and center saying okay yeah we've got a month left of of supplies so you know you need yeah you you simply need to to make a u-turn uh so i think china's in a in an okay position i think china has a decent value bet here uh i assumed uh a week ago that india was in a decent spot um as well haven't heard much since uh i i've lost count of the times that scott besant and uh it's gone on the wires stating that deals within 48 hours i expected and then nothing happens they just keep saying that right and maybe we should just expect no deals yeah yeah who cares about deals yeah um so the new line or or maybe august 1st is the new deadline or maybe it's just letters you know it's um yeah so so amigel let me just read out a lot something that i wrote to our hedge fund clients um asking me what to expect from this new deadline uh i wrote this perhaps the explanation for the lack of trade deals is simply that negotiating the details of such trade frameworks is compisome, medium to long-term work, something the Trump administration appears woefully unprepared to handle at the paragraph level.

18:13They're simply not prepared to write long, detailed trade deals. So at best, what we get is some, you know, small letters of like memorandums of understanding on on some very tangible stuff, such as cars or food or something like that. They're not, you know, writing a big trade deal with India or China, it takes five years. I mean, it's not the kind of patience they have here. No. No, no, Andres. In Denmark, the phrase, the hockey stick has become very, very popular. That is, you have a certain deadline to match some goal and you stay mostly flat and then boom, you make it right at the end. They haven't even done that.

18:55But this reminds me of, Andres, you and I went to the same high school. And when I was in the final year of high school, I was called to the principal's office and say, OK, your grades are OK. Your attendance is OK. But you're behind on these seven or eight reports. And that, oh, yeah, I'm going to do those. I'm going to do all of those. And then you came back 14 days. Ah, two weeks later, I've done most of them. You're always lagging behind because new stuff is always coming. And it's, yeah, the hockey stick hasn't really materialized, to be honest here. But should we fear a new, should this induce new fear?

19:32You just sent me this chart on trade policy uncertainty, because as I mentioned, in my mind, this issue had more or less been put to rest. We were expecting some deals to be made. The China issue was solved. Do you think that this could instill new fears in the market? i i think there's you know first of all i think there's a fatigue in markets uh related to this topic for good reasons uh the second thing is that we see in price action right now that a lot of people had hoped for a deal with the eu and the deal with india and nothing happening as we speak could obviously change so at least for some countries markets have high hopes and yeah we're currently lacking that momentum but i am not worried that this derails what appears to be a cyclical upswing over the next three months then we'll have to go back to april 2nd levels and we're very far from that still in terms of uncertainty remember that And, you know, one thing is to tax the consumer and the producer and the retailers via this tariffs set up.

20:51Another thing is to shock the whole confidence of the economy. And you probably cannot do that two times in a row. Let me just give you a piece of anecdotal evidence. First lockdown during COVID was a major deal for markets. Second time, not so much. Third time, who cares, right? So for markets to really sell off, you need a shock effect. And it is far from shocking right now. And, you know, the chart we've brought with us here is a way of quantifying the uncertainty. And the uncertainty is still much, much lower than it was in April. But trending higher, given the headline hoggy we've played since Thursday last week.

21:38Okay, Andreas, we'll get back into how to position for the summer period in the coming months here. But Andreas, speaking of fatigue, speaking of U-turns, I just want to touch upon this piece of news from this morning. Trump has said to NBC News that he's planning a major statement on Russia on Monday. And obviously, as I said, we're recording this a few days in advance, but just laying out my analysis here. As I've alluded to, Trump has been friendzoned by Vladimir Putin, essentially. He's been given just enough to keep his interest to not seek out other women, if you follow that analogy. Again, heading back to high school and dress, we both know what that feels like, I suppose.

22:22And every time he's moving close to putting the screws in Russia, Putin has given him a phone call and reassured him. That might happen over the weekend. You should look out for that. Could happen early next week. But it seems to me that Trump has finally, finally lost patience after six months of negotiations heading nowhere. And Trump having spent all this political capital, he was shouting at Zelensky, he was going to Europe, he was pressuring. He spent so much political capital in this and Putin has done nothing to extend a hand to this. So it seems to me that Trump has finally lost patience with Vladimir Putin.

23:01They've tried everything to make a peace deal. They have forced Ukraine to accept very harsh terms, in my opinion, fair but harsh terms. And Putin is having none of it. There are a lot of reports that Russian economy is doing badly. They have very high inflation numbers. The growth is stagnant now. But that's to be expected in a war scenario. They can easily go on for a couple more years. The Ukrainians probably can't. So that strategic situation is still valid. And Trump hasn't been able to sort of shift that strategic situation and force Putin to negotiate. So what I think we'll see on Monday is unless Putin gives him a call and keeps Trump in his friend zone, we're going to see the next step in this U-turn from Trump, which is increased weapon shipments to Ukraine.

23:52We have had some interruptions. We haven't had a full hold to weapons shipments since Trump took office, but we haven't had any new waves. That's probably going to come probably through NATO. And then we're looking at the big sanctions package that Lindsey Graham is getting voted through Congress right now. So that might be the final piece of the puzzle to pull Putin to the negotiation table here. But let's see. As I said, the strategic situation is not very good. This is, in my opinion, still a huge embarrassment for Donald Trump and a situation they weren't properly prepared for. We have to acknowledge that.

24:30So let's see next week, obviously, even though we're away, we'll stay on top of this if things develop. address. Should we move on to how to position for the next period? You already mentioned a couple of bets on China. I know you've been looking at healthcare financials as well. What's your take, if you had to put this simply to people, how to position over the next few months here? As I said, maybe 10 minutes ago, I think this is the kind of environment where you can have high beta stuff like Bitcoin technology, et cetera, and commodities in your basket at the same time. Since China is in a good spot, they can stimulate.

25:18We're seeing a decent momentum in the business cycle. And typically when you go from, say, 48 in PMIs to plus 50, it's actually the exact zone where you see the most aggressive returns. uh so you know despite all of this it is so easy to allow this wall of worry uh to impact your decision making but i i think it would be um yeah but it would be um misguided to do so to be honest uh as long as it doesn't really explode and it it doesn't appear to to be exploding as we speak at least. And therefore, I'm still fairly upbeat, Michael. I'll have to admit to that. I did a full show on this political wall of worry and how to position in the pro tier here at Real Vision last week.

26:16So go have a look in case you're interested. Absolutely. I think, Andreas, that's pretty much what we had for this week or last episode before we take a very short summer break and return to you in two weeks' time. Any final notes, Andreas, to the listeners here? No, check my out-of-office. I'll see if I can write something funny. Absolutely. And also, just as a final notice, as we talked about last week on the show, Sten & Research, our business address, is merging completely now with Real Vision. So if you're an existing subscriber, please check out stenaresearch.com for more info on how to roll over your subscription to Real Vision because that's where it's going to be at moving forward.

27:00That's where things are going to happen. Have a great summer out there. Have a great vacation, Andreas. I'll see you in two weeks' time. See you, amigo. Thank you, guys. We'll be back. Summertime is maybe good. Summertime is maybe shit. Today's video is sponsored by VeChain, the leading layer one built for real-world adoption. VeChain launched all the way back in 2015, built for real-world utility before most people had even heard of blockchain. One of the oldest protocols and boasting 100 % uptime since launch, it's known for powering real-world solutions and partnerships with global brands like the UFC.

27:37Now, they're entering a new user-focused chapter powered by adoption in the VBetter ecosystem and an ambitious technical roadmap dubbed the VeChain Renaissance. Renaissance builds on VeChain's history of real utility and adoption to deliver a faster, more flexible core protocol designed to meet the needs of builders and drive mass adoption. The next phase kicks off on July 1st with the launch of Stargate, VeChain's new staking program. It's an evolution that brings VeChain closer to delivering its vision of a world powered by Web3 without compromising on reliability or stability. The future is here and it's scalable, sustainable and evolving with purpose.

28:22Check the links in the description to find out all you need to know about VeChain Renaissance and the updated staking opportunities available through Stargate. If you like this episode, I'd love for you to head over to realvision.com forward slash join for a free membership. Start your journey today to unfuck your future. Just one click away.