From Tariffs to Bitcoin: How 2025 Markets Keep Defying the Risks
From trade wars to digital reserves, the forces behind 2025’s improbable market climb
Markets are scaling a wall of worry built from tariffs, politicized data, swelling deficits, and attacks on the Fed. Behind the noise, liquidity flows are dictating asset prices — rewarding investors who hedge, diversify, and stay nimble.
Gold Tariff Whiplash
President Trump jolted metals markets with a proposal to impose a 39% tariff on Swiss gold bars. Spot gold spiked above $3,500/oz in a record rally; central banks bought ~120 tons in a week; hedge funds scrambled. Days later, Trump reversed course, sparking a partial pullback but leaving volatility elevated.
Investor takeaway: Policy-by-tweet can reprice global assets in hours. Portfolios need allocations to policy hedges — gold, TIPS, commodity producers, and increasingly, Bitcoin.
BLS Under Scrutiny
July CPI: +0.2% m/m, +2.7% y/y; core CPI at 3.1% vs. 3.0% consensus.
Energy costs fell; shelter remained stable.
New BLS chief raising concerns about politicized statistics.
July PPI: +0.9% m/m;
Services costs: +1.1%
Goods ex-food & energy: +0.4% — largest jump in three years.
Traders now hedge data credibility as well as the numbers themselves — potentially reshaping Fed policy expectations.
Markets pricing in a 25–50bps rate cut; 84% probability of a cut.
Question remains: Will Jay Powell push back on markets using PPI, core CPI, and retail sales trends as ammunition?
Tariffs vs. Deficits
Tariff revenues hit a record $28B in July, on pace for $300B annually. But with a $291B monthly deficit (+10% YoY), Medicare, Social Security, and interest costs overwhelm gains. Less than 10% of federal revenue comes from tariffs, and corporate tax cuts offset half the inflows. Markets are largely pricing out tariff volatility — at least for now.
Pressure on the Fed
Populist rhetoric about taking control of rate-setting — or abolishing the Fed — is gaining traction at the political fringes. While a shutdown is unlikely, political harassment could lift term premiums, dent reserve currency trust, and inject volatility into FOMC events. Read our related article here.
Equities at Records
The S&P 500 and Nasdaq 100 have logged 15 all-time highs in 2025. Nearly 80% of S&P firms posted record profits, but gains are concentrated in tech, semis, and mega-caps. Small caps and cyclicals lag. The result: shallow pullbacks, a steady grind higher, and FOMO-driven capital rotation.
Bitcoin Treasuries Go Mainstream
More companies are raising capital to buy and hold Bitcoin, often trading above their BTC net asset value. GAAP accounting allows paper gains to flow into earnings. Strategy ($MSTR) holds >214,000 BTC; roughly 160 public/private firms hold ~4% of total supply. The thesis: hedge against fiat risk and maintain liquidity outside traditional banks.
Summer 2025 Playbook
Policy volatility, fiscal strain, politicized data, and concentrated market leadership define the current climb. The winners are those with:
Exposure to both real and digital assets
Agile rebalancing strategies
Hedges in place before shocks hit
In The Markets
Closing Thoughts
Fragility is structural. Adaptability is alpha. In 2025, the wall of worry isn’t a metaphor — it’s the market’s foundation.
Enjoyed this newsletter? Get Involved.
Subscribe to MacroMashup: one email a week, zero noise.
Book a call with Dakota Ridge Capital if you’re investing in clean energy or want to optimize for tax strategy
Collaborate with us at contact@macromashup.com
📤 Enjoyed this? Share it via LinkedIn, repost on X → here, or forward it via email.
“You cannot predict, but you can prepare—sidestep risk when markets turn wild.”
I think this quote from Mandelbrot helps
What will upset the apple cart? and when?