Follow the Money, Not the Drama

Why 2025 Is a Pivot Year for Bitcoin and Bonds

“Drama is anticipation mingled with uncertainty.” William Archer, Scottish critic

“Capital flows where it’s treated best.” A Global Macro Adage

TlDr:

While confusion and last-second heroics determine winners and losers on the court, in parliament, and on the pitch, markets are offering a clearer verdict on 2025’s real winners and losers.

Join us today at 12PM EDT on The New Barbarians Podcast.
Bill Mann, Connor Farley, and I will unpack how two simple ChatGPT prompts about Monday's Knicks-Celtics game delivered predictions that ranged from prophetic to delusional—making Paul Tudor Jones’ AI concerns seem oddly prescient.

Markets Have Spoken

The invisible hand has drawn sharp lines between 2025’s winners and losers.

• Losers: U.S. equities and the U.S. Dollar (DXY)

• Winners: Gold, the Euro, and German equities (EWG)

• In-between: Treasuries and Bitcoin—the assets with the most risk and reward

YTD price action has been anything but smooth (below). But if you zoom out, the divergence is by design, not chance:

Trump’s chaotic tariff policy is prompting U.S. equity outflows and forcing CEOs to pull guidance.

Germany, shedding its fiscal restraint or Debt Brake, is deficit-spending like it’s 1999—or more aptly, 1939—on military and infrastructure. With a stronger balance sheet than most G10 peers, it’s attracting capital in a world desperate for clarity.

(See The Ledger section below for charts and data.)

The Yellow Light: Treasuries and Bitcoin

Amid the chaos, two assets—U.S. Treasuries and Bitcoin—sit in the middle of the return stack.

• Treasuries: Still standing, but battered. An old fighter with a glass jaw.

• Bitcoin: Ascendant, signaling its emergence as a finite, secure, politically neutral store of value.

Yesterday's move—BTC up 3.2%, UST10Y flat—suggests the light is turning green for Bitcoin, yellow for Treasuries.

Yesterday also marked a milestone: New Hampshire officially passed legislation creating a Bitcoin Strategic Reserve, the first of 22 states with similar bills in flight. Fitting, isn’t it? The “Live Free or Die” state leads again.

Follow the Money, Not the Drama

Yesterday, Friedrich Merz failed to secure an initial majority in the Bundestag—the first such failure for a German chancellor since 1944. Though he later won a follow-up vote, it underscores a central theme: the West is losing its ability to build consensus.

This echoes our July post, The Centre Cannot Hold, when France called snap elections after Macron’s failed confidence vote.

Across the U.S. and Europe, governments increasingly rely on:

• Short-term wins over long-term policy,

• Temporary fixes like the U.S. debt ceiling extensions (next one due this summer),

• Tariff delays and PR plays like Trump’s 90-day tariff pause,

• And fiscal stimulus to patch over structural wounds.

Political theatre—like Knicks vs Celtics’ OT comeback or Inter’s late equalizer versus Barcelona yesterday—is entertaining, a fleeting joy that doesn’t fix global imbalances. Deficit spending is now the only unifying policy.

Sports, like magic, thrives on the unexpected. Who knew that the Celtics would miss 45 of their 60 three point shots? Both NBA records. My ChatGPT 4.0 model obviously didn’t, as halfway through the second quarter when the Kicks were down by 8, I asked who would win.

The answer: Celtics, 112 to 98

Chat GPT was wrong, because the Celtics epic 3 point shooting failure was NOT in the data. Was it the Knicks D? A pre-game Cinco De Mayo celebration that caused the failure? We don’t know, that’s why we pay to watch. However, when it comes to markets, politics and other ‘unusual’ geo-political events, we think there is an underlying cause or problem: Namely, a growing load of sovereign debt and deficits being kicked down the road.