Bro, let me tell you what’s going on in the markets right now—it’s wild.
So, Trump’s kind of in a tough spot. He was trying to play hardball with China using tariffs, but it looks like he had to back down. Imagine him having a chat with Xi Jinping like,
“Xi, thanks a lot for the help. I’ve tried everything to get the US central bank (the Fed) to chill out and cut rates, but nothing worked. If it weren’t for your help pushing back with tariffs, I might’ve already driven us into a recession. Seriously, thanks.”
Then there’s this dramatic moment from last night—basically, a bunch of big bondholders (think China, Japan, Europe) dumped US bonds. And when the US government wants to borrow money, it sells these bonds. So yeah, it looked like a financial panic. The market basically forced Trump to back off. China’s not playing anymore. They’re saying loud and clear:
“If the US wants to go all in on this fight, we’re not backing down.”
Meanwhile, over in China, their inflation (CPI) just ticked up from negative to flat—yeah, from -0.7% to 0.0%. That’s technically an improvement, and even with a weak Yuan and a sluggish Yen, Bitcoin is on the rise. Why? China’s central bank is quietly injecting money into the system while the US has already hiked rates twice recently. That shift in global money flow is helping risk assets like Bitcoin.
Bottom line: This is looking like a win for China.
And here’s where Jamie Dimon comes in—the guy running JPMorgan. He understands the flow of money way better than the US Treasury Secretary, who mostly cares about making the president look good. Jamie Dimon? He’s loyal to the money. And if he’s telling the President to cool it with the tariffs, it’s probably because the US is actually losing more from this trade war than China is.
Now back to Bitcoin.
People think Bitcoin only goes up because people buy it. But that’s not really the whole picture. It also rises when there’s more money sloshing around in the system—when liquidity increases. So yeah, buying pressure helps, but Bitcoin also functions like digital gold, a place to park value when currencies weaken.
If Bitcoin was just going up because people bought it, and crashed when they sold? That’d be a Ponzi scheme. But it’s not. It’s now considered a legit asset class, like gold, stocks, oil—you name it. Big players like BlackRock wouldn’t be touching it if it were just hype.
Even JPMorgan agrees: despite talk of a recession and delays in Fed rate cuts, Bitcoin can still go up in 2025. Why? It protects against a weakening dollar, especially if Trump’s policies cause inflation. Plus, crypto markets are getting more stable and institutions are slowly embracing it.
Still, not everything is so clear-cut. Some economists, like James Thorne, say there’s no solid proof yet that tariffs cause long-term inflation—but the fear alone is driving decisions. China’s still dealing with deflation, and they haven’t even fully rolled out their stimulus yet.
That brings us to Bitcoin again—its recent rise isn’t even from China’s liquidity yet. It’s still mostly driven by US liquidity and maybe even speculation. If BlackRock is selling and retail investors are piling in, that might explain part of the price movement.
And tonight? Big moment. The US will release its CPI (monthly inflation report). If inflation comes in lower, markets will start betting that the Fed will go soft—Dovish, in Wall Street speak. That usually weakens the dollar and lifts Bitcoin. That’s the playbook.
But here’s the twist:
The Fed’s job is to keep inflation in check and make sure people have jobs. Right now? Job growth is meh, unemployment’s at 4.2%, consumer spending is slowing, home sales are just okay, and interest rates are still high at 4.5%.
So can the Fed still afford to act tough (stay Hawkish)?
Well… they’ve already dialed back their money-tightening (QT) from $25 billion/month to just $5 billion, and emergency funds (RRP) have shrunk from $2 trillion to $156 billion. On top of that, China and Japan are selling off US debt, shaking up the bond market, and the US still hasn’t raised its debt ceiling.
So realistically, can the money supply actually shrink right now?
Doesn’t look like it.
So where does Bitcoin go?
If liquidity flows again—especially from China later—it probably goes up.
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