Tariff Tantrum

Keeping with the theme of 2025, the Trump administration's Liberation day has created a load of downside volatility, shaking up equities, bonds and Bitcoin, but with a side of decoupling in the air.

G’day Folks,

The year of chaos continues, with the Trump administration releasing their implementation plan for global trade tariffs. Asset markets took a hit, with equity indices trading down -5% or more in a day, and the US 10y Treasury yield falling below 3.9%.

Whilst the implementation of tariffs by Trump should not have been of any surprise, it appears many in the market didn’t expect them to be as large and as wide-ranging as they are.

Personally, I find this whole event fascinating across several dimensions:

• The sheer scale of the structural shifts we are watching in global markets is wild to think about. We’re watching a real time re-architecture of global commerce.

• There appears to be a rotation of capital out of the US, and into foreign markets. This has been a ‘widow maker’ trade for decades…but now seems to have legs.

• Bitcoin and Gold are holding up far better than I had expected.

This final point is the one I want to focus on today, as it is obviously the most interesting to us as Bitcoiners.

The chart below is a zoomed in view of the trading action over the last few days, pricing Bitcoin in units of the S&P500. If you had of asked me what Bitcoin would be doing on a day when equities were down -5%, I’d assume Bitcoin would be down at least -10%.

Bitcoin has outperformed the US equity market during this risk-off event.

Even though BTC is trading well off its ATH, and sold off earlier than equities, this near-term divergence is non-trivial, and warrants a deeper investigation.

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📈 Reminder: you can find the charts from our articles on the Checkonchain Charting Website, and a guide in our Charts Tutorial Video.

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