Core Strategy

Given today’s developments, we believe it will be appropriate to increase exposure in our Core Strategy (total long position from 50% to 75% long and increasing our relative altcoin weighting). That said, given the explosive nature of today’s move and the firm resistance BTC is testing, we think it is prudent to wait for either a retrace or a confirmed breakout before executing.

Bond Market Puts the Brakes on Tariffs Ex-China

Last night, we noted that the trade war was accelerating and morphing into a broader capital war, as evidenced by China’s significant move to devalue the Yuan. We also highlighted the ongoing selloff in the long end of the yield curve, which has become a focal point as investors appear to be boycotting long-term Treasuries.

Combined with rising credit spreads and more than four rate cuts being priced into 2025 Fed Funds futures, these dynamics suggested early signs of stress in the credit market.

This led us to adopt a cautious stance. However, we also pointed out that a material breakdown in the credit market’s ability to function could eventually prompt a response from the Fed, which could be a bullish development for crypto.