Explained: Tariffs, Stocks, Gold, and Bitcoin...

Despite having a degree in Economics, and being technically qualified to work at the Bank of England, I literally have no idea what’s going on. Not that that’s going to stop me from pretending…

This Week in Crypto (and TradFi)!

Given the extenuating circumstances, let’s just take a step back, look at the whole Tariff situation, and how it might relate to Bitcoin.

Firstly, what happened (in a nutshell):

• The US got into a tit-for-tat trade war with China, with both sides raising Tariffs on each other.

• Equities nuked (with the S&P falling to 21% off it’s high) while bond yields pumped (hard) in one of the most volatile weeks across markets in history.

• The US then announced 90-day pause on reciprocal tariffs above 10% for all countries except China, which faced an increased minimum tariff rate of 145%. ​China responded by raising its tariffs on U.S. goods to 84%.

• The S&P 500 surged 9.5%, and the Nasdaq rose 12.2%, marking one of the largest gains since World War II. ​

Okay. Let’s take another step back, and look at the objectives of the current administration - is there a method in the madness? (Ermm, maybe, but also, maybe not):

1. Rebalance the Trade deficit and re-negotiate trade deals worldwide

   • Pressure countries - particularly China - to remove non-tariff barriers and stop practices the U.S. views as predatory or protectionist (e.g., forced tech transfers, IP theft).

2. Raise money to close the fiscal deficit

   • This goes hand-in-hand with DOGE. The US runs an annual deficit of $2T. Elon’s goal is to cut $1T in waste, fraud and abuse. Lutnick’s goal is to raise $1T - one mechanism here is from Tariffs. They also have stated they want Tariff revenue to subsidise an elimination of income tax for everyone earning under $150K.

3. Re-shore American Manufacturing, particularly in strategically important industries

   • COVID made it apparent that US supply chain’s are massively dependant on foreign imports in a wide array of massively important industries; from defence to pharmaceuticals to steel to autos. In a Kinetic war, or some other form of seismic global event, these supply chains and US national security would be severely hampered.

Sounds great in theory! However, there are problems here:

1. Inflation: Tariffs raise the cost of imported goods, disrupt supply chains, and reduce competition - driving up prices on consumer products. Now, personally, I’m a monetarist - meaning that sustained inflation can only be caused by an increase in the money supply. Tariff’s are simply a tax and cause a one time price increase (rather than long term generalised inflation). Further, a rise in the USD would make imports cheaper, offsetting some inflation. However…

2. Growth. The main risk is a recession. If the Tariff’s are too severe, quick, or heavy handed they will impact business forecasts, investments and consumer confidence.

3. Geopolitical turmoil. Now obviously, the whole world wants access to the American consumer. They’re not going to happy about being taxed on their exports - so the US risks alienating it’s allies. Canada and the EU in particular are not happy.

4. Financial market turmoil. An explicitly stated goal of the Bessent (Secretary of the Treasury) has been to lower the 10Y, given the amount of debt the US has to refinance. I believe every 100 basis points is worth around $100BN. Generally, what happens when equities sell off - which they have done this week (massively) - is that yields decrease as investors buy bonds (flight to safety). However, this has not been the case - which is VERY alarming. Further the USD has been nuking. The nightmare scenario here is stagflation: equities nuke, unemployment rises, short term inflation from Tariff’s is not offset by the dollar rising in value, and a recession. This all obviously leaves the Fed between a rock and a hard place.

A few other dynamics to note here also:

• Oil is down 25% from January highs, and factor inputs are down too. If CPI has soft prints, the FED has room to cut in the short term.

• Re-shoring is a massive “if” factor here. The US is in a race to re-shore as fast as possible to offset reduced consumer spending and lower receipts. Now, this can get really complicated, but the short and simple version is, Trump said he wants to see reshoring happen in two years. This is, to put it lightly, rather optimistic.

• The implicit post-WW2 order is that the US exports dollars, and buys the worlds goods. The rest of the world buys Treasuries. China (and maybe other countries) have likely started selling treasuries, explaining why the 10Y hit 4.5%, up from a low of 3.7%. This costs the US c.$80B when it comes to refinance the c.$10T of debt later this year. Bessent needs this to go down. I cannot stress that enough.

• The Administration appears to be willing to stomach turmoil on wall street. Bessent said something remarkable the other day: "The top 10% of Americans own 88% of all stocks.. The next 40% owns just 12%. The bottom 50% has nothing but debt… we have got to give them some relief.” I.e. in plain English - it’s Main Streets turn, Wall street has done well enough. As long as the core economy survives, the administration will accept lower equity prices.

Alright that was a lot. We’re nearly at the bit where Bitcoin comes to save us. First, let’s check in on Gold:

It’s a classic flight to safety: stocks down, dollar down, 10Y up. Luke Gromen has been banging this drum for a while (he's been massively long Gold and BTC for a while):

Personally, I’m more than happy for Gold to lead for now - to me, it’s hilariously obvious that the trade of our lifetimes is Bitcoin to Gold parity. We all know that Bitcoin is superior money to Gold.

Put bluntly:

You are a nation (or even an individual or business) that does not have confidence in the US right now: You don’t want to hold US equities, US government debt or US dollars. You also don’t want to buy other nations equities, debt or currencies, because inevitably they’ll debase it. Historically, this is where you’ve bought Gold. You accept the costs to purchase tonnes upon tonnes of Gold, physically ship it to a vault (out of your custody) and take the exorbitant costs to physically store it. You accept that it will be inflated at 2% a year - after all, it’s better than anything else.

In 2025 however, you can buy an asset that is controlled by nobody, yet accountable to everybody, that cannot be arbitrarily debased, that is a bearer asset and can be secured at little to no cost, that can be sold, transferred, bought and borrowed against 24/7/365 from anywhere in the world.

Gold can win the battle, but Bitcoin will win the war.

This Week in Tech

A round-up of AI news for you this week:

OpenAI announced on Thursday that they’re rolling out a new memory feature in ChatGPT that allows the chatbot to base its responses to user questions on the contents of their previous conversations.

• The new feature will initially roll out first to ChatGPT Pro and Plus users. 

• It’s currently unclear if/when the feature will be available to free users. 

• There is an opt-out - users can turn off the memory feature in ChatGPT’s settings, as well as manage specific saved memories. 

And some more OpenAI news - the company is counter suing Elon Musk for enjoinment from “further unlawful and unfair action”. 

• Musk initially sued OpenAI for abandoning its nonprofit mission. He had first sought a preliminary injunction to halt the transition to a for-profit company. In March, a federal judge denied the request, but allowed the case to go to a jury trial in Spring 2026. 

• In a filing on Wednesday, attorneys for OpenAI called for Musk to be prohibited from any further “unlawful and unfair action” and “held responsible for the damage he has already caused”. 

• In an emailed statement, Marc Toberoff, an attorney for Musk, said, “Had OpenAI’s board genuinely considered [Musk’s bid for the company’s nonprofit earlier this year] as they were obligated to do, they would have seen how serious it was. It’s telling that having to pay fair market value for OpenAI’s assets allegedly ‘interferes’ with their business plans.”

And Anthropic announced on Wednesday that they’re launching a new, expensive subscription plan for AI chatbot Claude, called Max. 

• Max comes with higher usage limits and priority access to the company’s newest AI models and features. 

• Max has two different price points - $100/month tier with 5x higher rate limits and a $200/month tier with 20x higher rate limits.

As usual, below are some fundraising announcements, M&A, and tech personnel changes that caught our eye:

• AI agent startup Artisan raised a $25M Series A, led by Glade Brook Capital. 

• Police drone startup Brinc raised $75M in new funding, led by Index Ventures. 

• Early-stage venture firm SignalFire raised over $1B, bringing its total assets under management to around $3B. 

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Disclaimer: None of the above is financial advice, seriously.