Magnet Wars, Bitcoin Gravity, and the New Rules of Trade
Deals Everywhere. Supply Chains in Motion. Policy With a Price Tag
Read Time: 7 Minutes
The U.S. is trying to do three hard things at once: rewire its industrial base, rewrite trade rules, and rethink money. This week’s cross‑currents—rare earth gambits, Bitcoin valuation models, crypto legislation, tariff math, and re-weaponized arms exports—are the real drivers of portfolios, not the noise.
This Week at a Glance
Pentagon takes stake in MP Materials to jump‑start U.S. rare earth magnets.
Interior moves to loosen mining rules for lithium, cobalt, nickel.
Capriole’s “Bitcoin Energy Value” model gains institutional traction.
Crypto Week on Capitol Hill pushes stablecoin and jurisdiction bills forward.
Tariff revenue surges—the TACO trade is noisy, but the Treasury cash is real.
CPI mixed: headline edges up; core tame; tariff “leakage” shows in goods.
Arms‑via‑allies model channels U.S. kit to Ukraine while Europe foots more of the bill.
MP Materials & the Pentagon’s Magnet Play
Washington is finally trying industrial policy on purpose. The U.S. is backing MP Materials to rebuild a domestic rare earth magnet supply chain—the crucial step between mined ore and finished neodymium‑praseodymium (NdPr) magnets that power EV drivetrains, wind turbines, precision munitions, and guidance systems.
Deal Structure (proposed):
Pentagon equity stake: ~15%.
$150M low‑cost loan under Defense Production Act authority.
10‑year offtake contract with a price floor tied to NdPr benchmarks.
Capacity goal: MP’s planned “10X Facility” targets 10,000 metric tons of finished magnets/yr by 2028—enough to move the U.S. from raw‑material exporter to full‑spectrum producer.
Why Markets Care:
This is economic statecraft, not subsidy trivia. A credible U.S. magnet supply reduces Chinese leverage across autos, wind, and defense—and could reprime valuations for miners, specialty processors, and defense primes with magnet exposure. China has played this long game for decades; the U.S. is late, but not out.
Doug Burgum’s Mining Offensive: Permitting as Policy
Interior Secretary Doug Burgum is pushing an aggressive 20–30% cut in federal permitting timelines for strategic mineral projects on public lands.
Focus metals: lithium, nickel, cobalt, rare earths—the feedstock for EV batteries, grid storage, munitions guidance, and permanent magnets.
Framing: National security, not just climate. Burgum warns U.S. manufacturing plans are hostage to Chinese mineral supply chains.
Pushback: Environmental coalitions already lining up lawsuits; Western water use and tribal consultation are friction points.
Market Angle: Faster permits + DPA funding + offtake guarantees = a path for private capital to re‑rate U.S. critical‑mineral juniors now priced as option value only.nd incentives will attract private capital and rebuild domestic capacity.
Bitcoin’s “Energy Value” Gravity — Capriole’s Framework
Capriole Investments has gained Wall Street mindshare with its Bitcoin Energy Value (BEV) model—a fundamentals‑style anchor derived from energy input costs to secure the network relative to new BTC issuance.
Current Model Read: ~$130K “fair value” equivalent. Spot trades below; long‑horizon funds are watching the gap.
Why It Matters:
Post‑halving issuance declines; energy cost per new BTC rises.
Mining cost + issuance supply = quasi “marginal cost” floor for strategic allocators.
When spot trades deep below BEV, long‑only macro funds add; above, they trim.
Investor Use Case: Less day‑trading signal, more valuation gravity—especially for institutions treating BTC as a commodity‑monetary hybrid.
Crypto Week: From Fringe to File Number
Congressional hearing rooms actually said the quiet part out loud: digital assets need rules.
In play:
GENIUS Act (stablecoins): Reserve, reporting, and charter passed House & Senate on a bipartisan basis, and is headed to Trump’s desk.
Clarity Act: Attempts to fence the SEC’s “everything is a security” stance and carve out digital commodity treatment. Passed House and is headed to Senate.
Anti‑CBDC Surveillance State Act: Symbolic, but signals resistance to a retail FedCoin. Attached to the must-pass National Defense Authorization Act.
Several measures stalled, but the existence of coordinated hearings marks a regime shift: crypto policy is moving from enforcement to statute. Sentiment uplift helped push Bitcoin higher and broadened bid across large‑cap tokens.
TACO Trump: Noise vs. The Treasury’s Tariff Cash
Wall Street’s acronym TACO—“Trump Always Chickens Out”—still explains the trade: tariff threat, market wobble, deadline slide, risk‑on bounce. But the money is no joke.
Tariff Revenue Reality
$113B collected YTD (2025) vs $61B YTD (2024).
June 2025: $26.6B vs $6.3B in June 2024.
New 25‑40% rates, plus the 50% copper tariff, are swelling customs receipts.
Sector Effects:
U.S. miners and processors catch a pricing tailwind.
Import‑reliant manufacturers (electronics, autos, appliances) see margin pressure.
Treasury gains a quasi‑automatic stabilizer—tariff revenue now material to fiscal math.
Trading Note: Markets fade the rhetoric—but earnings season will surface the cost pass‑through.
CPI Check: Is Tariff Heat Showing Up?
Latest read:
Headline CPI: +2.7% y/y (above consensus).
Core CPI (ex‑food/energy): +0.2% m/m (slightly cooler).
PPI - zero change in June.
Category noise flagged in furnishings, toys, household appliances—channels where tariff passthrough tends to show first.
Policy takeaway: Mixed data gives Powell room to wait. Tariff uncertainty + imperfect
Ukraine Arms Deal: U.S. Kit, Europe’s Checkbook
Washington has shifted to a “sell‑and-transfer” model: The U.S. sells advanced weapons—Patriot batteries, artillery, interceptors—to NATO partners, who in turn re‑route them to Ukraine.
Why it works:
Sustains U.S. defense production lines.
Moves cost burden toward European budgets.
Keeps U.S. front‑line exposure indirect while replenishing allied inventories.
Broader Implication: A template for future proxy support structures—in Asia as much as Eastern Europe.
Macro Lens: The Big Picture
Industrial policy is finally married to national security. Rare earth magnets, mine permits, and energy security are now investable policy themes.
Monetary & digital convergence: Bitcoin’s energy‑anchored valuation model is gaining institutional use just as Congress edges toward stablecoin law.
Tariffs that “never happen” are funding the government. Ignore the tweet storms; follow the customs ledger.
Portfolio Rule: Track the cash flows. Count the magnets. Price the copper. Watch the policy beta in your supply chains.
In The Markets
Tape & Headlines We’re Watching
“Epstein List” & Hunter-device controversies soaked airtime; markets ignored.
10‑Year U.S. Treasury back near 4.5%.
PPI flat (0.0% m/m June) gives margin relief story.
Trump floated—and denied—firing Powell.
Indonesia trade deal adds LNG + nickel wrinkles.
What To Watch
Want to know the darkside of why reestablishing manufacturing in the U.S?
Listen to Mike Rowe of Dirty Jobs.
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