Despite improving liquidity conditions and favorable seasonality offering reasons for optimism, the ongoing trade war remains the dominant driver of crypto’s next move. As such, we believe it’s prudent to stay patient. We’re increasing our Core Strategy allocation to USDC to 50%, keeping altcoin exposure minimal as we assess the potential fallout from the Liberation Day tariff announcements. While this may seem discouraging, the roadmap has become more straightforward: we turn bullish if other countries concede (our base case) or if economic weakness results in a fiscal and/or monetary response.

Liberation Day

Liberation Day came and went. To put it bluntly, the tariffs announced by the White House were far more punitive than expected. Every country received a blanket 10% tariff, with higher reciprocal tariffs applied to those with steeper levies on U.S. exports. Some highlights include:

• China: 34% (in addition to an existing 20%)
• EU: 20%
• Vietnam: 46%
• Taiwan: 32%

According to the analysis constructed below, this would bring the weighted-average tariff rate to nearly 30%.

The market’s reaction was predictable: risk assets sold off hard. BTC held up relatively well for a time, but it's now starting to show additional weakness.