The One Crypto Trade That Still Makes Sense Right Now

1-12) Bitcoin is showing notable resilience compared to U.S. tech stocks. If its historical correlation with the Nasdaq had held, Bitcoin could have fallen into the low $60,000 range. However, the relationship appears to be shifting—Bitcoin may no longer follow tech stocks with a predictable beta. Instead, it’s increasingly acting as a refuge and potential store of value for U.S. asset holders.

Nasdaq (LHS) vs. Bitcoin (RHS)

2-12) It’s not just global trade that Trump is reshaping—he’s also challenging the international security framework, where the U.S. military has long been the central and reliable anchor of transatlantic security. With America signaling a retreat from that leadership role, this could mark a broader decline in global military influence. While no apparent alternative power is ready to step in, the shift may contribute to a reassessment of the U.S. dollar’s overvaluation and its role as a safe-haven asset.

3-12) While Fed Chair Powell remains in his role until May 15, 2026, his consistently hawkish stance has previously clashed with Trump’s economic views. Trump would likely move to replace Powell with someone who sees the natural real interest rate as significantly lower. Such a shift could set the stage for broader market expectations of U.S. policy easing, potentially leading to sustained dollar weakness—not just in 2025 but well into 2026.

4-12) Fixed income markets are now pricing in four rate cuts for the U.S. this year, but whether those cuts materialize depends entirely on Fed Chair Powell’s actions. If the Fed accelerates its cutting cycle, the U.S. dollar could weaken rapidly, potentially triggering a strong rally in Bitcoin.

5-12) Four rate cuts signal that markets are firmly expecting a Powell pivot, even though the U.S. labor market remains resilient. Today’s Nonfarm Payrolls report may still show moderate strength, but the real focus is on Powell’s upcoming remarks. While he previously suggested the Fed could look through short-term inflation pressures, those pressures have intensified since he last spoke. If Powell strikes a more hawkish tone today, there’s a real risk that equities and other risk assets will sell off—potentially making him the scapegoat for renewed market weakness.

6-12) During Trump’s first trade war, tariff announcements were followed by a stronger U.S. dollar. This time, however, the opposite may unfold. Unlike his first term, when globalization was the foundation of global trade, today’s political climate is shifting, with leaders increasingly focused on domestic priorities over international cooperation. A weaker dollar could also reflect shifting expectations that less global trade will be settled in dollars, with foreign governments moving away from U.S. assets—a potentially catastrophic miscalculation by the Trump team.

7-12) Everyone is arguing that Trump will negotiate before those reciprocal tariffs take effect on April 9. Still, there is a possibility that these were not negotiation tactics, but rather a new level of providing access for foreign companies to the US consumer.

8-12) Historical evidence suggests that in trade wars, countries with trade surpluses tend to lose out to those with deficits. Unlike during Trump’s first term—when the focus was on incremental gains—he now appears to be seeking a more decisive victory rather than settling for minor adjustments in America’s favor.

9-12) The key signal will be bond yields: if they fall, markets are bracing for recession; if they rise despite recession risks, it could signal broader dislocations. In 2015, Chinese investors turned to Bitcoin as a safe haven amid yuan devaluation; this time, it might be U.S. investors seeking the same.

10-12) We maintain a mildly bullish view on Bitcoin, particularly in relation to U.S. stocks and altcoins. With altcoins already deep in a bear market, it's unlikely that consumers or speculators will divert spare capital into high-risk, low-conviction cryptocurrencies. In this environment, Bitcoin's dominance is likely to continue rising as more discerning investors choose to allocate capital to the most established cryptocurrency. This may even extend to U.S. dollar holders, given the lack of compelling alternatives.

Bitcoin Dominance (LHS) vs. Crypto Market Cap ($ trillion, RHS)

11-12) The one clear takeaway is that altcoins are likely to continue underperforming. If U.S. equities extend their decline, the dollar weakens, and the tariff war drags on without resolution, Bitcoin could emerge as the relative winner (vs. US dollar, or vs. US stocks, or vs. altcoins → see our report from January 15 here). In a market clouded by uncertainty, even identifying the smallest outperformer could prove to be a successful trade.

12-12) Europe and China are both pursuing fiscal expansion, and retaliation to U.S. tariffs appears likely—moves that typically support their respective currencies. In such an environment, there may be few safe havens, but distinguishing winners from losers becomes essential to preserving capital. A long Bitcoin versus short altcoins position could be one of the clearest trades in this landscape.

Favorite Trade: Long Bitcoin vs Short any altcoin