Quinetn Francois
In April 2025, a popular hedge fund strategy called the basis trade completely collapsed. It works like this: traders borrow huge amounts of money to buy Treasury bonds and sell futures on them (profiting from small price differences). It’s safe until markets crash. Then it turns into a time bomb. When U.S. tariffs triggered a stock market crash, bond prices and futures moved in the wrong direction. Leverage exploded. Margin calls hit. That sparked a multi-trillion dollar liquidation panic. Both stocks and bonds sold off. The system broke. This kind of financial stress leaves the Fed with only one option: Step in. Inject liquidity. Stabilize markets.
The basis trade involves hedge funds borrowing heavily to exploit small price gaps between Treasury bonds and their futures, a strategy that amplifies returns but risks collapse during market volatility. U.S. tariffs in April 2025 triggered a stock market crash, disrupting bond-futures price alignments, causing margin calls, and forcing a massive sell-off of stocks and bonds. The Federal Reserve likely intervened with liquidity injections to stabilize markets, as historical crises like COVID-19 showed similar Fed responses to financial disruptions.
Michaël van de Poppe, a well-known cryptocurrency analyst and trader:
08.04.2025
Another day in paradise. Bonds continue to raise, however, the $DXY starts to tumble down. Gold remains to go up. System is cracking at this point, I think we’ll see a Central Bank step into the game within a few days.
U.S. implementing more tariffs & Yuan collapsing even more. Matter of time (I’d say 1 week max) and one of the central banks of China or the US steps in to positively influence the markets and fuel it with QE. That’s the bottom signal for Bitcoin & Altcoins.
It’s not at matter of speculation where the markets will be at tomorrow. It’s rather a case of 6-months from now and build your investment thesis around it. If this correction is comparable to March ’20, then we’re about to witness a strong upwards run on Bitcoin and Altcoins.
The markets kind of remind me of the COVID crash. Massive dump, and after that we’ve actually been quickly jumping back up with Bitcoin, resulting into an 18-month bull market.
Peter Schiff – an American economist, stockbroker, and financial commentator:
Since the world runs consistent trade surpluses with the U.S., if all trade with the U.S. stops, the world will simply trade more outside the U.S. and collectively increase their consumption. The U.S. will be forced to decrease consumption as it would have fewer goods to consume.
As I warned earlier, the Treasury market is crashing. The yield on the 10-year just hit 4.5%, and the yield on the 30-year just hit 5%. Without an emergency rate cut tomorrow morning and the announcement of a massive QE program, tomorrow could be a 1987-style stock market crash.
Trump said that our trade deficit with China is China’s problem to solve. The solution is clear. China needs to dump all its Treasuries of U.S. dollars and buy gold. Then, revalue the yuan higher and peg it to gold. The dollar will crash versus the yuan. U.S. interest rates will soar while Chinese rates fall. Chinese consumers will instantly be enriched, as purchasing power is transferred from the U.S. to China. The Chinese will then be able to afford all the goods China now ships to the U.S. They will also be able to buy a lot of stuff in the U.S., like our used cars, that Americans can no longer afford to maintain or drive. So, the Chinese will get to consume all the goods they produce. Americans will experience massive inflation and a collapse in our living standards, as we will have few goods left to buy with our depreciated dollars. Problem solved!
The crash that’s now happening in the bond market has more dire implications than the crash in the stock market. If these tariffs remain in place, the U.S. could have a full-blown financial crisis by the fall that makes the 2008 Financial Crisis look like a Sunday school picnic.
According to Howard lutnick our trade deficits are bad because “they’re taking our money, and Donald Trump has seen this, and he’s going to stop it.” Yes, they’re taking our fiat money we create out of thin air and we’re taking their stuff that costs them lots of resources to produce.
If Trump’s secret agenda is to crash the stock market to bring down long-term interest rates, the plan already failed. The yield on the 30-year Treasury is now above 4.75%, its highest since February 19th. So the plan to crash the stock market is now crashing the bond market too.
Prior to this year, since its inception in 1984, the Russell 2000 has only dropped by 30% or more on three occasions: following the Dotcom bubble pop of 2000, the 2008 GFC, and the 2020 COVID pandemic. When the Russell 2000 drops by this much, it’s not a good sign!
During today’s Senate hearing on Trump’s tariffs, Ambassador Jamieson Greer kept referring to record trade deficits left by the Biden administration. But the Trump administration left the Biden administration with record high trade deficits too. We can’t blame it all on Biden.
Many think the Fed doesn’t have to worry about inflation, as the recession will solve the problem. Ironically, it’s sharply higher import prices that will cause the recession. Plus, as Americans spend more dollars on locally produced goods, domestic prices will rise sharply too.
China can pull the rug out from under the U.S. economy anytime it wants. There’s no need to retaliate with tariffs, which hurts themselves. As our biggest supplier and one of our largest lenders, if they really want to hurt us, delivering a financial crisis is a knockout punch.
U.S. stocks, bonds, and the dollar are all down. This is a broad-based liquidation of U.S. assets. Trump claims his tariffs will cause foreigners to invest in the U.S. to avoid the tariffs. Instead, tariffs have already resulted in foreigners pulling their money out of the U.S.
Samson Mow is a prominent figure in the cryptocurrency and blockchain industry with a diverse background that spans gaming, blockchain technology, and cryptocurrency leadership roles:
The American Dream is to get rich buying stocks. Someone needs to get a message through to Bessent.
When you’re issuer of the reserve currency of the world, Main Street is Wall Street.
So Bessent says it’s time for Main Street to take over. In this economy, who’s going to put up the capital to build factories and supply chains? Who’s able to hire workers to make widgets. Main Street is pretty broke. You can’t build infra and pay workers with platitudes.
I have yet to hear exactly how exactly high tariffs with China (being presented as a win) will revitalize jobs and production in the US, given input costs for raw materials and components will be up, a lack of engineering skills, and virtually no manufacturing infrastructure.
Bitcoin is just going to start rocketing upwards and no one will be expecting it.
If China wants to escalate, they do have $760 billion in U.S. Treasuries to dump.
Everything happening today was set in motion in 1971. Nothing can be done to avoid the Great Monetary Reconciliation. Not improving government efficiency. Not lowering 10 year rates. Not tarrifs. Not rebalancing global trade. The only safe haven is Bitcoin.
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