Trump's terrifying tariffs

As equity and crypto markets went down this week, the amount of attention and anger directed at Trump's tariffs increased. Ostensibly this makes sense, since the various Trump tariff announcements have roughly coincided with declines. It's a safe bet that tariffs have had some effect on markets, but I question whether their effect is as pronounced as the attention and level of ire on Crypto Twitter (CT) would indicate.

On the always good Bits + Bips podcast this week, I found myself agreeing with this week's guest Travis Kling's assessment that much of the decline could be explained by general Trump uncertainty, which tariffs are certainly a part of, but not the whole story.

I also agreed with his view that the Trump admin is likely trying to frontload economic austerity, or give the economy "medicine" as it's being called. The rationale is that you administer the medicine now while you can still reasonably blame Biden. The hope is the economy will be better by midterms.

That Trump medicine made price action rough this week, but there still were positive news stories. Ukraine agreed to a 30-day ceasefire with Russia after diplomatic efforts in Saudi Arabia led by the U.S. February's Consumer Price Index—a key measure of inflation—eased to 2.8%, coming in slightly under the anticipated 2.9%.

There were also positive stories specifically about crypto. I stated on this week's episode of Token Narratives the famous quote, "people overestimate developments in the short term, and underestimate them in the long term." Developments like the ones below are long term bullish.

The U.S. Congress overturned the IRS Broker Rule, easing compliance burdens on crypto entities and preventing regulations that critics say stifled innovation and pushed development overseas. The Senate Banking Committee has advanced two bills on stablecoin regulations and financial fairness.

Caution and patience are still advisable right now. Arthur Hayes predicts Bitcoin may bottom at $70k before its next rally, citing short-term volatility caused by the Trump admin's medicine basically engineering a recession, or getting close enough to one. I largely agree with his thesis, which he shared with me in an interview this week.

-David Sencil

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News

Trump Proposes Tariff-Free Trade for Canada in Exchange for Statehood, BTC Slides Below $80K

President Donald Trump announced a 50% tariff on Canadian steel and aluminum imports, combining a 25% duty on.… read more.

Editor's comment: Many believe tariffs are one of the chief reasons markets have fallen. While they certainly have contributed, I think there are other factors that are just as important.

SEC vs Ripple: XRP Lawsuit Wrapping up as Negotiations Reach Final Stage—Report

Ripple's high-stakes legal battle with the SEC may soon end, as negotiations reportedly center on vacating a key… read more.

Editor's comment: Once this lawsuit is finally resolved, I believe impediments for a spot XRP ETF are mostly gone.

Arthur Hayes Predicts Bitcoin Bottom at $70K, Sees Strong Bull Market Ahead

Bitcoin could drop to $70,000 before its next rally, Arthur Hayes predicts, emphasizing patience. He warns of… read more.

Editor's comment: I interviewed Mr. Hayes this week. I found his thesis for the remainder of the year compelling.

Congress Torches IRS Crypto Rules in Major Win for Digital Assets

Congress just delivered a massive win for crypto innovation, overturning the controversial IRS crypto rules that… read more.

Editor's comment: The price action doesn't reflect it, but it's important to remember that crypto is getting many wins on regulatory and legislative fronts. This is yet another positive development for crypto.

'Markets Are Gonna Soar': Trump Shows Confidence as Inflation Cools and Stocks Rise

Equities and cryptocurrency markets rebounded following a sharp downturn earlier in the week, fueled by signs… read more.

Editor's comment: Trump and his administration will be happy about inflation decreasing, but I still think they want to front load more "medicine" for the market.

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