Bitcoin's 4 Puts

A massive thank you to

Uranium investor

for allowing me to share this post with Contrarian Capitalists. Even more so because this is a paid subscriber only post on

Uranium investor

, however, due to a strong working relationship, Contrarian Capitalists are able to read it for free.

A couple of editing points to note. I have slightly edited the format in order to improve both visibility and readability. A small amount of grammar has been corrected and the bit at the end in BOLD and italics was added by me.

Bar that, all words and thoughts are those of

Uranium investor

.

Enjoy!

---

Photo by Kanchanara on Unsplash

Bitcoin is down over 20% from it’s all time highs. MSTR 10.45%↑ is down about 45% from it’s all time highs.

The S&P500 and Nasdaq 100 are down massively also. I talked about the recent tariffs and what they mean in my two previous posts and talked more about bitcoin including why it has to go higher based on its fundamentals in the long term and why bitcoin soaring would be great for uranium and uranium stocks in my previous posts.

Now I’m going to talk about four ways bitcoin may get a “put” on it, basically guaranteeing if any of these things happen bitcoin is way less likely to go much lower. These “puts” are;

1. Fed put

2. Fiscal put

3. Policy put

4. SWIFT put

1. FED PUT

The fed put is the idea that the stock market and bond market cannot drop too much too quickly unless something dramatic occurs because the federal reserve can inject liquidity through quantitative easing or lower interest rates to stop it from doing so. Of course, there are a few issues with this since it is also inflationary. However, given the March inflation data was way lower than expectations this seems much more likely.

Recently, yields, and of particular importance, 30 year treasury yields have been blowing out. When this occured in 2020 the fed injected trillions into the economy. Of course, inflation fears are bigger now then they were before although there are indicators of inflation going back to normal.

Another important thing to note is that Trump asked the supreme court to let him fire top agency officials which would include Jerome Powell affecting the independence of monetary policy and would most likely be incredibly inflationary.

Overall, this is somewhat likely, I wouldn’t bet for or against this happening soon although the longer the markets are affected the more likely it is to occur and is likely to occur in a few months if the tariff situation remains. This is likely to be one of the more effective options.

2. FISCAL PUT

If the markets continue to weaken another way to juice them would be to lower tax rates or increase government spending. Of course, this would increase the deficit so would raise interest rates and bond yields but would most likely be bullish for stocks.

What is important to note is that there is also a possibility that this would be bearish for stocks also if investors sell stocks to buy treasuries instead, although this is generally considered to be unlikely and historical precedence suggests this would not be the case.

Overall, I expect that this will occur since the problem of the deficit can still be pushed onto future administrations despite the debt being high, since although it is high it is not high enough to incentivise deficit reduction and the reserve status of the dollar allows artificially low borrowing costs.

Tariff income can easily fund some income tax cuts. Exactly how well this will work is debateable and would depend on the extent of the stimulus.

3. POLICY PUT

This is, in my opinion, almost guaranteed to happen. The worse the markets do; the more likely Trump is to want a deal. If the markets keep freefalling a deal is practically inevitable in my opinion.

Of course, there is the possibility that Trump just does not care about the stock markets anyway since most voters hardly own stocks anyway although I think he most likely does since the people funding his political compaigns own stocks, it would not be a good look, and it would affect his base somewhat indirectly, although the extent is debateable.

Trump is unlikely to want to go out without a deal for reasons mentioned in my last post and is unlikely to get everything he would ideally want either making the negotiations more complicated although we are starting to see tensions decrease with China saying they won’t increase tariffs further.

I believe this will happen and the market will definitely bottom if this occurs and probably bottom just on the idea that the likelihood of it occuring increases before there is actually a policy shift. This is both the most likely and most effective one for stopping markets crashing.

4. SWIFT PUT

Lastly, and what I believe would be the most bullish for bitcoin although extremely bad for stocks and bonds is if we see an escalation in the trade war causing China to get kicked out of the SWIFT system.

This because China would have much more difficulty with transacting in dollars and would most likely decide to transact in bitcoin instead, although they would have huge difficulties with transacting purely in bitcoin due to speed issues and affecting the price of bitcoin too much for their liking. I believe if this does occur then bitcoin can easily 10x just from this alone.

I believe a trade deal would be made without resorting to China being kicked out of SWIFT although there is also a decent chance of it occurring. I believe even with escalation Trump would prefer to not kicking China out of SWIFT since it would cause mass de-dollarisation and would make treasury yields soar.

Overall, I believe due to a variety of ways we could see bitcoin having a put and one “put” even causing bitcoin to soar as well. It would be irrational to sell bitcoin or bitcoin stocks.

I believe the most likely to occur is a policy put and the most effective but least likely being a SWIFT put. I also believe a fiscal put is likely to occur and a FED put being unlikely to occur since I do not believe the markets will be affected long enough for the FED to get involved.

If you liked this Substack make sure to like, comment below and restack. See you guys next time.

If you liked this Substack post make sure to subscribe to my paid posts also so you can get more content like this. Make sure to like, restack, comment below and follow me on twitter. Thanks!

---

---

NB - If you are not an owner of BTC but are intrigued to have a stab at where the price is going to go, then you can head over to Polymarket | The World's Largest Prediction Market.

Thank you and please subscribe to

The Contrarian Capitalist

and

Uranium investor

if you have not already done so.