Market Crash, Bitcoin Strategy, and Tariff Realities
$SPX $QQQ $BTC
Happy Monday, and I hope everyone is prepared for Tariff Tuesday, tomorrow.
We still have a ways to go before the S&P 500 experiences a 10% correction, but we are getting awfully close for the Nasdaq Composite Index, and the Nasdaq 100.
Will the S&P and Nasdaq both correct 10%? I have no idea. The Nasdaq, however, is within striking distance of an 18,416 level.
Anyone claiming to know for sure can be ignored. If they’re traders, I get it. It’s their job to make educated predictions. But that’s not what Rigatoni Capital is about.
I’m not currently buying or selling anything, but if the Nasdaq 100 does correct ($485 price level in QQQ), I’m very intrigued to buy. I know I’ve repeated this a lot lately—apologies for the redundancy.
Bitcoin Thoughts
I re-listened to the discussion I had on the Investing or Gambling Podcast over the weekend, where both of the host’s disagreed with my feelings on a Strategic Bitcoin Reserve. Without the yelling and emotions, here are a few points I would like to re-emphasize:
I have no idea if Trump or the Executive Branch has the authority to purchase Bitcoin or other cryptocurrencies without Congress approval.
I’m not a fan of the U.S. buying any cryptocurrency other than Bitcoin. I’m not a fan of them buying publicly traded tech stocks. I’m ok with them buying a pool of hard assets like Silver and Gold alongside Bitcoin.
Senator Lummis and others I voted for promised not just a Strategic Bitcoin Reserve, but a Bitcoin acquisition plan within that reserve.
Kalshi Prediction Market gives a 66% chance of a National Bitcoin Reserve happening this year (as of today). I’d put it closer to a 25% chance in terms of a Bitcoin “acquisition” plan.
The U.S. doesn’t need to acquire Bitcoin for the asset to appreciate long-term. But it certainly speeds up the process.
Other nation-states and sovereign wealth funds will buy Bitcoin in the future, and some will print their own currency to do it—accelerating Bitcoin Game Theory.
In my opinion, the U.S. will never catch up to its $36T debt, at least in a significant way. That’s why we need to shore up our balance sheet by acquiring and monetizing assets like natural resources, forming a sovereign wealth fund, and holding hard assets like Bitcoin and Gold.
Tariff Tuesday
I don’t know if the Canadian/Mexican tariffs will be implemented based on the current proposals.
No, these tariffs don’t influence my investing strategy.
Yes, they are a huge pain in my business.
As I’ve said, I work in commodities. Many of my customers are scrambling to navigate these proposed tariffs. Most U.S. businesses wont’ absorb these tariffs, meaning finding domestic options ASAP is critical to avoiding shipment delays.
The ripple effects will work through the economy in a way we haven’t seen since the 2020 pandemic. If these tariffs stick for months, by April, consumers will notice some empty shelves for certain products, and by late Spring-Summer, prices will be higher.
Higher prices don’t just come from tariffs alone. Domestic suppliers will get overwhelmed, forcing longer lead times and price hikes.
If a company claims they’ll absorb tariffs without passing the cost to consumers, I’d be skeptical. Most businesses can’t afford margin hits.
So yes, this is frustrating. I hope a deal is reached in the late hours tonight or sometime this week. That said, I’m not opposed to tariffs as a negotiation tactic. If short-term pain is necessary to protect the country, I can live with that. I am specifically only talking about Mexico/Canada here, not China.
Final Thoughts
The pullback in risk assets like Bitcoin and tech stocks is healthy in my opinion. If you’re a long-term, value-oriented investor, don’t rush to buy just because some Fear & Greed Index says so.
There are plenty of tweets or notes on Substack asking, what are you buying while the markets are shit? This makes investors think they are supposed to be stepping in now while others are fearful.
No one should feel pressure to buy tech stocks or Bitcoin today because you’re afraid of missing out on a potential v-shape recovery. You need to accept that if this occurs, you’re ok missing this dip.
Over your investing lifetime, you’ll have plenty of opportunities to buy assets when they’re cheap.
Thanks, and have a great night. Please subscribe for newsletters I post 2-3x per week.
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Disclaimer: This blog is for informational purposes only and does not constitute financial advice. All opinions are my own, and I am not a financial advisor. The information provided reflects my personal views and is intended to encourage discussion and thought among readers. Investments involve risk, including the loss of principal, and past performance is not indicative of future results. Always conduct your own research or consult with a qualified professional before making any financial decisions.