The market is an ocean; we cannot predict every storm, only trim our sails when it arrives.

I. 1H 2025 in Review: Three Macro Forces That Moved Crypto

1. Trump-era tariff policy

2. Fed interest-rate decisions

3. Russia-Ukraine & Middle-East geopolitics

These drivers remain in play for the second half of the year. Below, we detail the scenarios most likely to shape crypto prices through 2025.

II. Trump Tariffs: The Inflation Wildcard
Tariffs are President Trump’s weapon of choice for three economic goals:

• Lower foreign trade barriers and boost U.S. exports

• Lock in a 10 %+ baseline tariff to swell Treasury coffers

• Reshore high-end manufacturing

Negotiation Scorecard (as of 25 July)

• Japan: Done—U.S. auto tariff cut to 15 % in exchange for ¥5.5 trn Japanese capex in AI & semis.

• EU: Deadline 1 Aug; talks ongoing in Washington.

• China: Third round scheduled 27–30 Jul in Sweden; 90-day extension likely if no deal.

• Philippines & Indonesia: Bilateral deals already signed.

Economic Logic
Tariffs are a negative supply shock → cost-push inflation. Corporations pass the tax to U.S. consumers. Unless data show muted price pressures, the Fed may delay or downsize rate cuts.

Net takeaway for crypto: higher-for-longer rates are a headwind, but inflation hedging could add incremental bid for BTC.

III. Dollar-Tide Cycle: Weak USD = Crypto Tailwind
Although the Fed did not cut in 1H 2025, the DXY fell from 110 to 96.37—textbook weak-dollar phase.

Why the USD Is Soft

• Tariffs shrink the U.S. trade deficit, breaking the recycling loop that props the dollar.

• Ballooning fiscal deficits and rising real yields undermine confidence.

• Petro-dollar deal expires un-renewed; central-bank USD reserves drop from 71 % (2000) to 57.7 %.

• Rumored “Mar-a-Lago Accord” hints at a deliberate policy pivot.

Historical Rhythm

• Full USD-tide cycle ≈ 4–5 yrs.

• Weak-dollar leg ≈ 2–2.5 yrs.

• Starting Jun 2024 → likely extends to mid-2026.

BTC vs. DXY Correlation
Bitcoin and the dollar index trade -0.78 over rolling 90-day windows. If the weak-dollar regime persists, global liquidity loosens—bullish for crypto.

IV. Fed Policy: Cautious, Data-Dependent, Politically Fraught
Remaining 2025 Meetings & Market Implied Odds (CME FedWatch)

• Jul 30: 95.7 % unchanged

• Sep: 60.3 % chance of ‑25 bps

• Nov/Dec: 1–2 cuts priced for full year

Why the Fed Is Stalling
1️⃣ Sticky inflation—Jun CPI +0.3 % m/m; core PCE 2.8 % y/y; tariff pass-through still ahead.
2️⃣ Growth merely sluggish—2025 GDP est. 1.5 %; but retail & consumer-sentiment prints surprise to the upside.
3️⃣ Resilient labor—unemployment 4.1 %; Q3/Q4 forecasts 4.3 % / 4.4 %.

Political Overlay
President Trump has publicly pressured Chair Powell on X, even threatening dismissal. Powell’s term ends May 2026; a replacement nominee is expected Dec 2025 or Jan 2026. Yet the FOMC vote on 30 July is almost certain to stand pat.

Bottom line: Expect one or two token cuts in 2H. Historically, Bitcoin has shown low sensitivity to the Fed Funds rate; global liquidity (proxied by USD weakness) remains the stronger driver.

V. Geopolitics: A September Cliff Edge

• Russia-Ukraine: Trump’s 50-day cease-fire ultimatum (set to expire 2 Sep) faces a Russian build-up of 160 k troops near Donbas and Ukrainian drone strikes on Moscow airports.

• Russia-Germany military accord dissolved; EU relations at a new low.

If the cease-fire collapses, 100 % secondary tariffs on Russia plus NATO escalation could roil risk assets, crypto included.

VI. U.S. Crypto Policy Enters Its Honeymoon
GENIUS Act (effective Jul 2025):

• Stablecoin issuers may not pay interest to holders, but can share reserve income (e.g., USDC 12 % APY via Coinbase).

• Designed to protect bank deposits from migrating to yield-bearing stablecoins.

CLARITY Act (passed House, in Senate):

• SEC regulates security tokens.

• CFTC regulates commodity tokens (BTC, ETH).

• “Mature Blockchain” pathway lets decentralized projects exit SEC oversight after certification.

• DeFi exemptions for code writers, node operators, non-custodial front ends.

Together with the Anti-CBDC Surveillance State Act, these bills shift the U.S. from “regulation-by-enforcement” to sunshine regulation, defending dollar dominance while inviting compliant innovation.

VII. The “Coin-Equity” Trade: Sizzle, But Can It Sizzle On?
MicroStrategy’s “Bitcoin playbook” has gone viral. Corporations are now adding ETH, BNB, SOL, XRP, DOGE, HPYE, TRX, LTC, TAO, FET—a dozen altcoins—to treasury reserves.

MicroStrategy’s Triple Flywheel

1. Stock-Coin Feedback Loop
   Premium to NAV (1.61×) → cheap equity funding → buy BTC → BTC price up → NAV per share up → valuation re-rates → repeat.

2. Equity-Bond Coordination
   Zero-coupon converts shift debt pressure to equity; hedge-fund arb flows provide cheap liquidity.

3. Fiat-Debt Arbitrage
   Borrow depreciating fiat, stack appreciating crypto—long-cycle wealth transfer.

Capital Stack Tactics

• Preferred shares → fixed-income buyers

• Converts → arbitrage funds

• Common stock → risk-takers

The question for 2H 2025: how many corporates can replicate this alchemy without balance-sheet stress if crypto volatility surges or equity premiums collapse?

Trim the Sails
Bull case: Weak USD + regulatory clarity + corporate treasuries = sustained risk-on bid.
Bear case: Stagflation scare, Fed stand-pat, cease-fire failure = liquidity shock.

For now, the wind is at crypto’s back—but every sailor knows the weather can change faster than the forecast.

The market is an ocean; we cannot predict every storm, only trim our sails when it arrives.

I. 1H 2025 in Review: Three Macro Forces That Moved Crypto

1. Trump-era tariff policy

2. Fed interest-rate decisions

3. Russia-Ukraine & Middle-East geopolitics

These drivers remain in play for the second half of the year. Below, we detail the scenarios most likely to shape crypto prices through 2025.

II. Trump Tariffs: The Inflation Wildcard
Tariffs are President Trump’s weapon of choice for three economic goals:

• Lower foreign trade barriers and boost U.S. exports

• Lock in a 10 %+ baseline tariff to swell Treasury coffers

• Reshore high-end manufacturing

Negotiation Scorecard (as of 25 July)

• Japan: Done—U.S. auto tariff cut to 15 % in exchange for ¥5.5 trn Japanese capex in AI & semis.

• EU: Deadline 1 Aug; talks ongoing in Washington.

• China: Third round scheduled 27–30 Jul in Sweden; 90-day extension likely if no deal.

• Philippines & Indonesia: Bilateral deals already signed.

Economic Logic
Tariffs are a negative supply shock → cost-push inflation. Corporations pass the tax to U.S. consumers. Unless data show muted price pressures, the Fed may delay or downsize rate cuts.

Net takeaway for crypto: higher-for-longer rates are a headwind, but inflation hedging could add incremental bid for BTC.

III. Dollar-Tide Cycle: Weak USD = Crypto Tailwind
Although the Fed did not cut in 1H 2025, the DXY fell from 110 to 96.37—textbook weak-dollar phase.

Why the USD Is Soft

• Tariffs shrink the U.S. trade deficit, breaking the recycling loop that props the dollar.

• Ballooning fiscal deficits and rising real yields undermine confidence.

• Petro-dollar deal expires un-renewed; central-bank USD reserves drop from 71 % (2000) to 57.7 %.

• Rumored “Mar-a-Lago Accord” hints at a deliberate policy pivot.

Historical Rhythm

• Full USD-tide cycle ≈ 4–5 yrs.

• Weak-dollar leg ≈ 2–2.5 yrs.

• Starting Jun 2024 → likely extends to mid-2026.

BTC vs. DXY Correlation
Bitcoin and the dollar index trade -0.78 over rolling 90-day windows. If the weak-dollar regime persists, global liquidity loosens—bullish for crypto.

IV. Fed Policy: Cautious, Data-Dependent, Politically Fraught
Remaining 2025 Meetings & Market Implied Odds (CME FedWatch)

• Jul 30: 95.7 % unchanged

• Sep: 60.3 % chance of ‑25 bps

• Nov/Dec: 1–2 cuts priced for full year

Why the Fed Is Stalling
1️⃣ Sticky inflation—Jun CPI +0.3 % m/m; core PCE 2.8 % y/y; tariff pass-through still ahead.
2️⃣ Growth merely sluggish—2025 GDP est. 1.5 %; but retail & consumer-sentiment prints surprise to the upside.
3️⃣ Resilient labor—unemployment 4.1 %; Q3/Q4 forecasts 4.3 % / 4.4 %.

Political Overlay
President Trump has publicly pressured Chair Powell on X, even threatening dismissal. Powell’s term ends May 2026; a replacement nominee is expected Dec 2025 or Jan 2026. Yet the FOMC vote on 30 July is almost certain to stand pat.

Bottom line: Expect one or two token cuts in 2H. Historically, Bitcoin has shown low sensitivity to the Fed Funds rate; global liquidity (proxied by USD weakness) remains the stronger driver.

V. Geopolitics: A September Cliff Edge

• Russia-Ukraine: Trump’s 50-day cease-fire ultimatum (set to expire 2 Sep) faces a Russian build-up of 160 k troops near Donbas and Ukrainian drone strikes on Moscow airports.

• Russia-Germany military accord dissolved; EU relations at a new low.

If the cease-fire collapses, 100 % secondary tariffs on Russia plus NATO escalation could roil risk assets, crypto included.

VI. U.S. Crypto Policy Enters Its Honeymoon
GENIUS Act (effective Jul 2025):

• Stablecoin issuers may not pay interest to holders, but can share reserve income (e.g., USDC 12 % APY via Coinbase).

• Designed to protect bank deposits from migrating to yield-bearing stablecoins.

CLARITY Act (passed House, in Senate):

• SEC regulates security tokens.

• CFTC regulates commodity tokens (BTC, ETH).

• “Mature Blockchain” pathway lets decentralized projects exit SEC oversight after certification.

• DeFi exemptions for code writers, node operators, non-custodial front ends.

Together with the Anti-CBDC Surveillance State Act, these bills shift the U.S. from “regulation-by-enforcement” to sunshine regulation, defending dollar dominance while inviting compliant innovation.

VII. The “Coin-Equity” Trade: Sizzle, But Can It Sizzle On?
MicroStrategy’s “Bitcoin playbook” has gone viral. Corporations are now adding ETH, BNB, SOL, XRP, DOGE, HPYE, TRX, LTC, TAO, FET—a dozen altcoins—to treasury reserves.

MicroStrategy’s Triple Flywheel

1. Stock-Coin Feedback Loop
   Premium to NAV (1.61×) → cheap equity funding → buy BTC → BTC price up → NAV per share up → valuation re-rates → repeat.

2. Equity-Bond Coordination
   Zero-coupon converts shift debt pressure to equity; hedge-fund arb flows provide cheap liquidity.

3. Fiat-Debt Arbitrage
   Borrow depreciating fiat, stack appreciating crypto—long-cycle wealth transfer.

Capital Stack Tactics

• Preferred shares → fixed-income buyers

• Converts → arbitrage funds

• Common stock → risk-takers

The question for 2H 2025: how many corporates can replicate this alchemy without balance-sheet stress if crypto volatility surges or equity premiums collapse?

Trim the Sails
Bull case: Weak USD + regulatory clarity + corporate treasuries = sustained risk-on bid.
Bear case: Stagflation scare, Fed stand-pat, cease-fire failure = liquidity shock.

For now, the wind is at crypto’s back—but every sailor knows the weather can change faster than the forecast.