Major Global Uncertainty, but Bitcoin sending a signal!

Macro volatility everywhere, except Bitcoin

Dear Bitcoiners,

Uncertainty is dominating the global markets. Meanwhile, Bitcoin has been the least volatile asset during this turmoil.
Uncertainty is the very reason people save money: to store value over time and protect against the unknown. But saving is no longer possible in our broken monetary system, which is driving excessive speculation. This trade war is causing one of the most uncertain times. As a result, investors are de-risking, equities are in a sharp drawdown, and capital is moving into traditional safe havens like treasury bonds and gold. Bitcoin’s behavior is especially remarkable, as it saw one of its least volatile days—signaling its holders are comfortable holding it during this major trade war.

Trade War

Trump truly stirred the pot. And it’s hard to tell what his exact intentions are. Is it a negotiation tactic, an effort to reindustrialize America, a move to roll over debt at better rates—or all of the above?

Rolling Over Debt

As discussed in a previous newsletter, around $7 trillion in U.S. government debt needs to be rolled over this year. If interest rates stay elevated, doing so becomes dramatically more expensive. The annual interest expense on U.S. debt already exceeds $1 trillion. May and June appear particularly heavy months for rollover. The Fed’s high rates are a major burden.

Trump has called on the Fed to lower interest rates, but so far without success. The next opportunity is the Fed meeting on April 30–May 1. Is he now taking matters into his own hands? This trade war uncertainty is driving demand for treasuries—bringing rates down. That’s exactly what’s needed to roll over the debt.

In the chart below, we compare the year-to-date performance of Bitcoin, the S&P 500, and the 10-year U.S. Treasury Yield. Since Trump took office and uncertainty increased, the interest rate on the 10Y Treasury dropped from a high of 4.8% to 3.9%. But to achieve this, Bitcoin and equities are now showing nearly equal negative performance.

This chart is live available for paid subscribers.

👉 Key insight: It took an equal-percentage drawdown in risk-on assets to bring down Treasury yields. Will Trump keep punishing the markets, or will the Fed step in with rate cuts and break the trend?

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Reindustrialization

For decades, the U.S. (and Europe) exported dollars and imported goods, losing manufacturing jobs and weakening the middle class. Are tariffs the way to undo that? I have my doubts. Here's the full circle I tried to map out:

1. Global reserve currency → High dollar demand

2. Strong dollar → Trade deficit (export less than import)

3. Trade deficit → Deindustrialization

4. Deindustrialization → Loss of the American dream

5. No American dream → Political Pressure to bring it back

6. Tariffs → Slow imports, stimulate domestic production, slow economy

7. Slower economy → Fed lowers rates → Weaker dollar

8. Weaker dollar → Reindustrialization, but also inflation

9. Inflation → Hurts the middle class, Fed raises rates

10. Higher rates → Stronger dollar (back to step 2)

One major concern is a resurgence of inflation (step 9). Trump’s solution: low energy costs, “Drill baby drill.”

Bitcoin sending a signal!

In last week’s newsletter, we compared this correction to the one following the ETF approval. If you missed it, you can find it here.

Identical Corrections

We discussed how the next step was setting a higher low. Given the amount of fear in global markets, Bitcoin has held up exceptionally well and, for now, is setting that higher low. In contrast, equities made a lower low. Bitcoin is sending a strong signal here: investors are comfortable holding Bitcoin while equities are selling off.

This chart is live available for paid subscribers.

I’m not here to claim this is the ultimate bottom, but based on the data so far, there’s a strong case that the correction is playing out as discussed last week. Since this correction is heavily macro-influenced, much will depend on how the broader conditions evolve.

Wrap Up

I hope this newsletter helped clarify the dynamics at play. While short-term turbulence may continue, it has nothing to do with Bitcoin’s fundamentals. In fact, Bitcoin’s long-term outlook has never been stronger, and that gives me great confidence.

As always, I would love to hear your thoughts, feel free to share them in the comment section. 👊 🧡

Until next week! 🫡

-Root