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I think one of the easiest ways to misunderstand markets is to spend every day staring at the chart of the thing you already own.
If you own Bitcoin, you watch Bitcoin.
If you own gold, you watch gold.
If you're long tech, you watch Nasdaq.
Do that for long enough and you start explaining the entire world through your own position.
The problem is that a lot of big moves don't actually begin in the asset you're trading.
Something can start in bonds, move into FX, then metals, and eventually reach Bitcoin.
Oil can move inflation expectations, inflation moves yields, and a few steps later the valuation of the tech stock you own has changed even though nothing happened to the company itself.
The last few days are a pretty good example.
On August 19, the US Treasury announced that it would increase the size of its long-end Treasury buybacks.
Long-term yields initially moved lower. The dollar weakened. Gold and Bitcoin accelerated.
Bessent had also previously talked about supporting Japan if necessary around yen-related stress and discussed tools such as FIMA more actively.
You can treat all of those as separate headlines.
I don't think the market did.
The broader message was that policymakers seem increasingly willing to step in when stress starts appearing in important parts of the financial system.
That doesn't mean the US has suddenly announced a policy of deliberately destroying the dollar.
That's taking it too far.
Markets don't need Bessent to literally say that anyway.
They just need to see that Treasury can respond when the long end becomes disorderly, that policymakers have tools available if something like the yen carry trade becomes a problem again, and that liquidity support can become larger when needed.
Then the market asks a much simpler question:
What do I want to own in that environment?
Suddenly gold, silver, copper, gold miners, Bitcoin and Bitcoin miners aren't just unrelated tickers moving on the same screen.
Their individual stories are different, but there's a trade connecting them.
The debasement trade.
Moving away from monetary claims and toward scarce or real assets.
And I think that's also part of why Bitcoin moved so much harder.
Gold can buy the same macro story.
So can BTC.
But Bitcoin has thinner liquidity, more leverage and much more fragile positioning.
A change that gold might price over several days can sometimes get compressed into a few hours in BTC.
Put a crowded bearish position on the other side of it, force shorts to close, and suddenly a relatively small change in macro can create a very large move in price.
We've basically watched that happen this week.
But there's another part people tend to forget once a trade starts working:
It won't be the trade forever.
A month from now the market could be worried about something completely different.
Oil could accelerate again and push inflation expectations higher.
Suddenly nobody cares about debasement for a while. "Higher for longer" comes back, yields and the dollar move higher and long-duration tech gets hit.
Or employment deteriorates much faster than expected.
Now inflation isn't the main story anymore. Recession is.
Bonds rally, cyclicals get sold and defensive positioning starts making more sense.
Maybe the next problem is AI capex.
Markets stop caring about macro for a few weeks and start asking whether all that spending is actually producing enough return. Money comes out of semiconductors and data center trades and rotates somewhere else.
Or Japan gives us another carry shock.
Then some of the same risk assets everyone couldn't buy fast enough a few days earlier get sold together.
You won't see any of that by staring at a Bitcoin chart.
And I think the US itself is increasingly stuck between three things it would ideally like to protect:
- Bondholders.
- The value of the dollar.
- Economic growth.
As the debt math gets heavier, protecting all three at the same time becomes harder.
Let long-term yields run too far and bondholders take losses, financing becomes more expensive and growth gets squeezed.
Intervene to reduce funding pressure and keep the long end under control, and eventually people start asking questions about the real value of the currency.
Fight inflation aggressively enough and you increase the risk of sacrificing growth instead.
There's no clean answer.
Which is why I don't think the next few years will be defined by one giant trade that you discover once and hold forever.
The market will keep repricing which one of those three is most likely to be sacrificed.
- Sometimes it'll look like the dollar is taking the hit, and gold, silver and Bitcoin will be the trade.
- Sometimes inflation will come back and duration will be the thing nobody wants.
- Sometimes growth will break and everyone will suddenly want the recession trade.
- Then something breaks in the bond market, policymakers respond, and the whole combination changes again.
You don't need to catch every rotation on day one.
And you're definitely not going to predict every macro event.
But if the only chart you look at is the asset sitting in your portfolio, you'll eventually end up trying to explain everything through that asset.
And that's usually where the mistakes start.
So I'm becoming less interested in asking whether we're entering a bull market or a bear market.
I don't think today's macro, fiscal and political environment is that clean.
There isn't one trade running every day.
I'd rather ask:
What could the next trade be?
And if I'm wrong about the current one, is my portfolio flexible enough to move with it?