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Felix Jauvin of Forward Guidance, a macro strategist who hosts the Forward Guidance show insists on the fact that clearing risk books will not be enough to free Bitcoin. “the prelude to an incredible trade once the degrossing is over.” It is a thread on X, Jauvin stitches together fiscal arithmetic, global liquidity metrics and the geopolitics of trade to argue that the next great impulse for BTC will arrive when capital flows that have underpinned US asset dominance reverse and re‑seed risk appetite abroad.
Bitcoin amid Trump Chaos
Jauvin starts by borrowing Michael Howell’s empirical work. Bitcoin’s primary driver is the blockchain. global liquidity,” he writes, citing Howell’s Granger‑causality tests that give liquidity an eleven‑week statistical lead on spot prices. Equity‑style beta “is a spurious correlation,” Jauvin argues, because US equities have merely been the channel through which global dollar liquidity has expressed itself since pandemic‑era deficits swelled Treasury issuance and household incomes at once.
Putting figures to his claim, he points out that the United States is the world’s largest economy. “run a substantially higher fiscal deficit as % of GDP than any other country,” This is the gap between two things. “mechanically leads to higher inflation, higher nominal GDP, and therefore higher top‑line revenue for corporations.” By extension, the S&P 500—and increasingly Bitcoin—have monopolised incremental risk capital. “Because of this dynamic, US equity markets have been the dominant marginal driver of risky asset growth, wealth effect, global liquidity, and therefore a vacuum for global capital to go where it’s treated best: the USA.”
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Jauvin’s inflection is at the Trump campaign’s declared ambition to compress the trade deficit Encourage allies to increase their defence and infrastructure spending. “The Trump administration wants to lower trade deficits with other countries, which mechanically implies a decrease of US dollars flowing to foreign countries that will not be reinvested into US assets,” He writes. The paired goal is “a weaker dollar and stronger foreign currencies,” As foreign central banks raise rates, and as investors repatriate their funds in order to reap the benefits of that carry.
He can see the genie slipping out the top of the glass: “Trump’s shoot‑first, ask‑questions‑after approach to trade negotiations is leading the rest of the world to unshackle themselves from their meagre fiscal deficits … I believe nations will continue with this pursuit regardless.”
If foreign governments embark on deficit‑financed rearmament and industrial policy, the marginal growth in global liquidity would migrate out of Washington and into Europe and Asia. “As the US continues to pivot from a global capital partner to a more protectionist one, holders of US‑dollar assets will begin to have to increase the risk premium associated with these previously pristine assets and have to mark them with a wider margin of safety.”
Why Bitcoin, And Why After The Sell‑Off
Jauvin frames current turmoil as necessary purgation from crowded positions “The first trade is to sell US‑dollar assets that the entire world is overweight and avoid the degrossing that is ongoing.” Bitcoin is a tech beta at the moment due to margin exhaustion. He insists that the second phase of asset allocation will be based on assets free from national account or tariff risks. “During rotational market days and non‑margin‑call days, we’ve started to see this dynamic take shape. DXY down“US equities are underperforming the ROW. Gold is soaring and Bitcoin has held up well.”
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He says that Gold is already responding. Bitcoin on the other hand, “hasn’t kept up with gold’s outperformance” because its high‑beta reputation keeps systematic traders on the sidelines. The asymmetry is created by: “For me, a risk‑seeking macro trader, Bitcoin feels like the cleanest trade after the trade here. You can’t tariff bitcoin, it doesn’t care about what border it resides in … and provides a clean exposure to global liquidity, not just American liquidity.”
Crucially, Jauvin anticipates a visible break in the co‑movement with US tech once non‑US fiscal stimulus becomes the leading source of incremental liquidity. “I’m seeing the potential for the first time … for Bitcoin to decouple from US tech equities” He writes. While acknowledging that many have been hurt by the concept before, he argues that this is a different time. “we are seeing the potential for a meaningful change in capital flows that would make it durable.”
If the thread’s logic holds, the present stress is the mandatory downstroke before a secular re‑rating. “This market regime is what Bitcoin was built for,” Jauvin closes. “Once the degrossing dust settles, it will be the fastest horse out of the gate. Accelerate.”
BTC was trading at $84 766 as of the time this article went to press.
Featured image was created with DALL.E chart by TradingView.com
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Source: www.newsbtc.com
