Netizen Premium | Bitcoin Deep Dive #27

Are Tariffs Quietly Fueling the Next Bitcoin Bull Run?

We're deep into a Fourth Turning that began with the 2008 Financial Crisis, when governments abandoned monetary restraint and began printing money with no fear of inflation. The U.S. Dollar and fiat currencies worldwide are now under mounting pressure. Bitcoin emerged in 2009 as a grassroots solution to government monetary abuse, and today's tariff-driven inflation cycle is accelerating the exact monetary breakdown Bitcoin was designed to solve.

Tariffs Ignite Sticky Inflation Cycle

The latest catalyst accelerating this breakdown is trade policy. The U.S. effective tariff rate has surged to 18.3%, the highest level since 1933, creating a structural inflationary shock that will persist for months. July's Producer Price Index exploded to 5.3% on a three-month annualized basis, the fastest acceleration in years, signaling inflation pressure yet to hit consumer prices. Tariffs hit hardest where it matters most: low-income households and small businesses that can't negotiate with suppliers or absorb margin compression like large corporations. This inflationary impact won't arrive linearly and will likely roll through sector by sector as companies exhaust inventory buffers and reset pricing strategies. The Fed's obsession with their arbitrary 2% inflation target risks a catastrophic policy mistake: tightening monetary policy into a stagflationary shock.

TLDR: Structural inflation pressures from tariffs make Bitcoin's fixed supply increasingly attractive as fiat purchasing power erodes.

Fiscal Dominance Guarantees Money Printing

Tariffs deliver a one-time $300 billion revenue boost, but this pales compared to government spending, with Medicare, defense, net interest, and Social Security compounding at over 10% annually, representing two-thirds of the federal budget. Despite this tariff windfall, the U.S. budget deficit remains stuck at 6.4% of GDP, exposing the government's fiscal addiction. President Trump's One Big Beautiful Bill promises trillions in tax cuts and subsidies, confirming that both parties prioritize vote-buying over fiscal responsibility. The Fed is now boxed into an impossible choice: keep rates high and trigger recession, or cut rates and fuel more inflation. Either outcome weakens the U.S. Dollar's credibility. Markets are already pricing regime change at the Federal Reserve, with Treasury Secretary Scott Bessent and potential Fed Chair candidates openly calling for "foundational change" and abandonment of the failed 2% inflation target, which would further fuel our everything rally thesis.

TLDR: Fiscal dominance guarantees endless money-printing cycles that Bitcoin's algorithmic monetary policy was designed to escape.

Goldilocks Market Meets Global Fragmentation

The current market regime remains in GOLDILOCKS, a risk-on market supported by BULLISH momentum in Bitcoin, equities, and gold alongside a BEARISH U.S. Dollar. Fifteen tariff rate adjustments in 2025 alone have institutionalized trade uncertainty as a permanent feature, accelerating global economic fragmentation and supply chain reshoring. Global liquidity growth has decelerated to just 4% annualized as only China continues expanding while the Fed, ECB, and Bank of Japan contract their balance sheets. This Fourth Turning backdrop of monetary regime change, political upheaval, and trade wars is creating the perfect environment for neutral, apolitical money to emerge as the global settlement layer. Bitcoin stands uniquely immune to tariff policies, political appointments, or central bank meetings, and its value proposition continues to strengthen as traditional monetary systems fragment.

TLDR: As global trade fragments and monetary regimes shift, Bitcoin's neutrality positions it as the ultimate winner in a multipolar world.

With tariffs driving inflation higher and fiscal dominance guaranteeing monetary expansion, Bitcoin's monetary premium continues expanding. Let's examine what the on-chain data reveals: