Preparing Yourself for Crypto Volatility
372: Tariffs, Macro Volatility, and Opportunities to Be Had
Morning folks.
Well we got it (and still might get another now that China is set to impose 10-15% tariffs on US oil, agricultural equipment, coal, and LNG). You couldn’t let me have one good night of sleep could you China!!!!!!!
The biblical crypto pullback earlier this week that rinsed the non believers from the market with ruthless red candles was savage. Meme coin casual enthusiasts were blown out and leveraged traders stood zero chance as position after position was liquidated causing a trademark waterfall of down only pressure that lasted into Sunday evening. The panic was palpable.
This wasn’t our classic 30% market pull back in a bull market — this one felt different and with macro conditions changing by the day and by the hour it’s an important time to take a pause and reassess what might be going on beneath the surface.
Sunday night, the cryptocurrency market saw a sharp decline, with major coins and assets experiencing significant losses. Bitcoin dropped around 15%, falling to approximately $91,400. Ethereum took an even bigger hit, plunging about 24% to trade near $2,495. XRP and Dogecoin also saw double-digit losses, down roughly 18% and 19%, respectively.
The sell-off was driven by broader market concerns, reflecting ongoing volatility in the crypto space but also the tariff announcements on Mexico and Canada announced by President Trump.
Leveraged traders were the biggest losers — the sell-off triggered massive liquidations, exceeding $2.2 billion in a 24-hour span. Ethereum traders were hit the hardest, with roughly $600 million in leveraged positions wiped out, while Bitcoin liquidations surpassed $400 million.
Today we are also going to cover what I think comes next in the markets and one of my major predictions for 2025 in the crypto markets. The clues are there — but for some reason people are sleeping on what could be an absurd opportunity. At the end of the post I will also list out the biggest geo-political and global news updates you need to be aware of (there are quite a few).
Plan is to cover crypto today as that’s what’s most pressing and then shift to geopolitics/global news Wednesday or Thursday (lot to cover there as well and it’s not lost on me).
We will expand on these in Thursday’s post (for everyone) along with appropriate updates from the equities markets in the wake of new Chinese tariffs — shoutout all paid subs who followed the PLTR 0.00%↑ call I made all last year and the year before (its trading over $100 now). Depending on how much you put in that’s probably like a 1,000x-10,000x return on your money for the cost of Arb Letter. Epic.
I am getting flooded with questions on X and Instagram including:
What should I buy on this dip?
Is the bull market over?
Why is Bitcoin not dumping as hard as alts and memes?
When can we expect a recovery?
Will tariffs ruin this bull market?
We will cover all of this today.
I have also noticed an increase in capitulation — that is people who publicly announced they were blown out liquidated, or done with crypto because of this pull back. While the pullback earlier this week was violent in nature and unprecedented even when compared to the pullbacks from the FTX collapse and the Covid era — a solid bounce did happen prior to the Chinese tariff news that came out last night.
This event is a good reminder of how to properly approach risk management. As I have said countless times before — crypto is a highly volatile asset class and it’s volatility will unsettle even the most experienced traders and investors if you let your judgement and emotion slide too far.
The good news?
I think this pullback and any incoming ones are a much needed reality check and rinsing of the system to set us up for newer highs. While many who can’t see past the trees for the forest are probably pissed prices dipped that much — the veterans know this is a golden opportunity to pick up puked coins at cheaper prices for the long haul.
On top of that we have many bullish clues dropping left and right that could signal another pump in the short term soon. Below — we see Senator Cynthia Lummis commenting on an X post by Karoline Leavitt who is announcing Trump’s call today for a Sovereign Wealth Fund (will crypto be added to it?)
Additionally we have news that today Donald Trump's appointed Crypto Czar and All In podcast member — David Sacks is reportedly set to hold press conference to discuss how "to secure America as a leader in the digital asset ecosystem."
To answer the immediate question yes I am still buying — and today we will go over what exactly while covering reminders on strategy, exchanges I use, and where I think the opportunity lies in 2025. It’s obvious something big is coming in crypto.
This is a rapidly changing landscape, even more so now with the macro changes brought on by Trump and his slew of executive actions. China is getting cute just hours after Canada and Mexico bowed down to the US and the future is uncertain but don’t let the short term volatility shake you out of being exposed to tremendous upside.
The volatility is the new norm and as long as you can adapt and stay focused on the simple strategies that have worked up until this point, you stand an excellent chance of navigating the chaos, surviving, and coming out on the other side.
We might have some fresh new deals to be had as the week progresses.
Let’s start with a review of the sell offs and then move into strategy and specifics.