The Breakdown - Bitcoin Hits New All-Time High as Macro Forces Align

Episode Date: July 11, 2025

Bitcoin has quietly surged to a new all-time high above $112,000, driven less by crypto-specific news and more by broader macroeconomic trends. In this episode, NLW explores how Bitcoin's latest rally isn't a sudden frenzy but rather the inevitable outcome of ongoing dollar weakness, shifting treasury policies, and persistent market uncertainty. As institutions and investors increasingly view Bitcoin as a necessary hedge against global financial volatility, the question isn't whether Bitcoin will rise further—it's how high and how quickly. Enjoying this content? SUBSCRIBE to the Podcast: https://pod.link/1438693620 Watch on YouTube: https://www.youtube.com/@TheBreakdownBW Subscribe to the newsletter: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://blockworks.co/newsletter/thebreakdown⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Join the discussion: https://discord.gg/VrKRrfKCz8 Follow on Twitter: NLW: https://twitter.com/nlw Breakdown: https://twitter.com/BreakdownBW

Welcome back to The Breakdown with me, NLW. It's a daily podcast on macro, Bitcoin, and the Big Picture Power Shifts remaking our world. What's going on, guys? It is Thursday, July 10th, and today we are, of course, talking about Bitcoin's new all-time high, as well as a bunch of macro. Before we get into that, however, if you are enjoying the breakdown, please go subscribe to it, give it a rating, give it a review, or if you want to dive deeper into the conversation, come join us on the Breakers Discord. You can find a link in the show notes or go to bit.ly slash breakdown pod. In retrospect, it was inevitable. After bouncing back quickly from the Iran conflict and spending all month trending higher, Bitcoin has, yes indeed friends, reached a new all-time high.

It briefly traded above $112,000 yesterday afternoon, exceeding the previous highs in May. Now, this isn't an archetypal Bitcoin breakout. Instead, the chart is just grinding higher, taking out pockets of liquidity along the way. It doesn't feel like a surprise or the start of a mania, but rather the continued price adjustment as Bitcoin continues to take up its mantle as a mainstream asset. Yesterday morning, Stack Hoddler wrote, When you've been around Bitcoin for a while, you start to feel a breakout before it happens. 109,500 this morning and a breakout feels imminent.

If you adjust for the dollar weakness, we've been in this range since November of 2024, which means we've spent nine months building a foundation for the next move higher. He discussed all of the tailwinds that have been pushing price forward, including treasury companies, high net worth investors, and the continued rise of the Bitcoin ETFs. Continuing, he wrote, what we're actually witnessing is the end of Bitcoin as a secret. Bitcoiners have had an incredible edge in the past 10 years

because we understood something that most people were reluctant to believe. But the capital markets have finally sniffed it out. The now open secret is, Bitcoin will outperform nearly every business on the planet in the medium term. Therefore, you have to buy it. You can buy it with cash reserves, cash flows, debt, or equity issuance. But you have to buy it or risk falling behind those who do. There's one major problem with this.

There isn't nearly enough 100K Bitcoin to satisfy the demand of all these corporations buying Bitcoin. Therefore, we must go higher. Much, much higher. The sentiment was anchored across what was honestly a fairly quiet timeline. Analyst Adam Livingston tweeted, Every Bitcoin all-time high is less surprising and more like watching prophecy fulfill itself in real time. We don't scream, we nod. Not because we're jaded, but because we already knew.

Every price tick higher isn't dopamine for us anymore. It's confirmation. Bitcoin doesn't rise. Reality converges. Each all-time high is not a party. It's a checkpoint on the inevitable arc of monetary history bending towards thermodynamic truth. Putting it more succinctly, Will Clemente wrote, Everything we've talked about for years seems to be happening right in front of our eyes.

There's not even much to say. It's beautiful. The story of this all-time high has nothing to do with crypto-catalyst. Yesterday, we had a Senate hearing on market structure that featured a ridiculous amount of squabbling over nothing, hardly something to drive a new price record. In the background, we have steady accumulation across corporates, but that's not a new phenomenon. All we have is the slow-moving macro forces eroding the value of fiat currency and making Bitcoin seem like an increasingly clear force. Macroscopes reflected on what this rally looks like to trad-fi traders, trying to time their

moves rather than latching onto the trend. They wrote, Can't remember ever seeing an asset like Bitcoin right now, where so much sideline money has been watching the chart for so long with a plan to buy, quote, once it breaks out. This includes institutional guys who assume enough offer-side liquidity and time will be there for desired position sizing. Will it work out that way? Maybe.

We'll see. Interesting situation. DeWartheimer pointed out that this isn't a price level for celebration tweeting, I'm embarrassed by all the all-time high tweets. Wicking 37 cents above previous all-time high isn't an all-time high break. You're about to see what a real all-time high break looks like. So, rather than digging through the fairly inconsequential crypto news looking for a catalyst, instead with the rest of today, we're going to focus on the macro news.

None of these stories are new, but they demonstrate together the continuing trends that are pushing Bitcoin higher. Let's start with the dollar, which reversed lower yesterday. The Dixie has been in a two-week uptrend, which led many to start calling the bottom on this year's dollar weakness. That temporary strength broke yesterday, sliding into the New York closed before dropping in the evening. The move was small, but the trend reversal is important. The dollar was incapable of sustaining this anemic rally, giving dollar bears another reason to pile into the trade. Last quarter, being short the dollar was a consensus position.

The currency had had its worst start to the year since the Nixon administration, falling 11% over the first six months. A shakeout was fairly inevitable, but this rollover is significant. technicians are starting to point to this level as right on the cusp of breaking a 14-year uptrend. Speculative short positions on the dollar are now back to their lowest level since 2021, so there's little risk of a squeeze higher. Art Hogan, chief market strategist at B. Riley, believes that overlapping macro drivers will remain in place, commenting, you can check a lot of boxes. You're running massive deficits, and nobody wants to stop that on either side of the aisle.

You're alienating friends both militarily and trade-wise. You've got enough potential negative catalysts. And then once momentum starts, it's kind of hard to stop it. Or, as Lynn Alden is fond of putting it, nothing stops this train. Today's episode of The Breakdown is brought to you exclusively by Grayscale. Grayscale is almost certainly a name you know. They've been offering exposure to crypto for over a decade now and offer over 20 different crypto investment products,

ranging from single asset to diversified to thematic exposure to crypto and the broader crypto industry. They have long been innovators at the intersection of tragedy. and crypto. And one of the benefits for a lot of us is that Grayscale products are available right through your existing brokerage or IRA. Now, of course, investing involves risk, including possible loss of principle. For more information and important disclosures, visitgrayscale.com. Go tograyscale.com to explore their full suite of crypto investment products and invest in your share of the future. Dollar weakness has come alongside each of the largest rallies in Bitcoin

history. So the dollar rolling over again could be the closest thing we have. to a direct catalyst for yesterday's move. It also goes some way to explain how quiet the all-time highs have been this year. While Bitcoin is at highs in dollar terms, it hasn't made a new all-time high against the euro since inauguration day in January. Alongside the dollar falling, bond rates have started to fall as issuance ramps back up. Last week's passage of the Big Beautiful Bill raised the debt ceiling by $5 trillion. Wasting no time, the Treasury increased gross national debt by $367 billion on Monday. Wednesday saw $39 billion and 10-year notes auctioned off. The result was relatively strong and drove 10-year yields down by around 10 basis points, breaking a two-week trend of yields ticking up.

Now, this is a bit of a narrative violation. Rather than abandoning U.S. debt, the auction results revealed strong demand. Another factor to watch is the refilling of the Treasury General account. Now that the debt ceiling has been raised, the Treasury still needs to rebuild their cash buffer to the target of $800 billion. The TGA only got down to $300 billion, so this rebuild won't be as large as in the second half of 2023 when the coffers had basically run dry. Conventional wisdom is that the TGA rebuild is negative for liquidity. Functionally, the Treasury is pulling liquidity out of the market to warehouse it on the government's balance sheet.

That was the case for the first half of the 23 rebuild. However, in the final quarter of the year, then Treasury Secretary Janet Yellen shifted issuance to T-bills, which proved to be liquidity positive. One theory is that T-bills function as collateral in financial markets while longer-dated bonds don't. So T-bills shouldn't act as a net liquidity drain. Yellen's successor, Scott Besson, already got the memo. Yesterday, the Treasury announced they would boost the issuance of Tbills to fund the TGA rebuild.

Since this is unconventional policy, it's not obvious how it will impact liquidity. But the Treasury is trying to raise $200 billion by the end of the month, a much faster pace than Yellen deployed in 2023. Another big macro narrative shift came from the release of the Fed Minutes yesterday. The notes from the June meeting reveal a split on the committee. The minutes stated that a couple of officials are on board to cut this month, while some believe that no rate cuts this year would be appropriate. However, most participants, quote, assessed that some are

in the target range for the federal funds rate this year would likely be appropriate. The difference is still related to concerns about tariff inflation, with some officials concerned about a longer-term impact. The Minutes said, participants agreed that although uncertainty about inflation and the economic outlook has decreased, it remained appropriate to take a careful approach in adjusting monetary policy. Nick Timrose of the Wall Street Journal tweeted, the Fed Minutes tell us something we already knew. Officials are divided into three groups. One, cut this year but not July, that's the largest group. Two, no cuts this year, Three, cut as soon as the next meeting, which in the minute suggests as only a couple,

i.e. Waller and Bauman. And while it might be true that this is known, it's still useful for markets to see the divide spelled out. The only real sticking point is tariff inflation, which may or may not show up. Aside from that, the committee is already seeing enough weakness to justify cuts in the fall. However, we might not get that many. Timmeros underscored the statement, several participants commented that the current target range for the federal funds rate may not be far above its neutral level. Translation, he wrote, outside of a serious slowdown, they're not envisioning a lot more reductions, even if they do resume cuts. Now, a big factor allowing financial conditions to ease has been relatively

stable policy conditions over the past few months. The tariff shock from April was in the rearview, and outside of the conflict in the Middle East, there hasn't been a big macro driver. Although this week was a deadline for tariff negotiations, most believed the administration would kick the can. That seemed like a safe bet on Monday. In a tarmac interview, President Trump seemed flummoxed about the current state of play. Commerce Secretary Howard Lutnik jumped in to confirm that deals were being hashed out this week, but tariffs wouldn't go into effect until August 1st. While that might be the case, the string of announcements yesterday demonstrated that this is far from another empty delay. Enhanced tariff rates were imposed on 20 countries, notably Japan and South Korea

are looking at 25% tariffs after failing to close a deal. Maybe the big surprise was a 50% tariff on Brazil. The tariff makes absolutely no sense in the administration's stated framework of closing the trade deficit, given that the U.S. runs a persistent trade surplus with Brazil currently at 7.4 billion. A letter from the administration explained that this is purely political. It referenced legal proceedings against former President Bolsonaro, Bolsonaro, as well as, quote, insidious attacks on free elections and the fundamental free speech rights of Americans. The latter refers to Brazil's ongoing censorship battle with Twitter. Markets in mayhem commented, Imposing tariffs as a retaliation is kind of a bad look. Will Thompson of massive capital tweeted,

the thing that gets me about our tariff policy is, I have no idea what the goal is. Is it to raise revenue? Is it to balance our trade deficit? Or is it to impose our will on countries doing random stuff that Trump does not like? Now, one thing that might become important is that the legal basis for the tariffs is the declared national emergency of persistent trade deficits, so a capricious use of tariff policy could open the door for further legal challenges. Some also suggested that ramping up tariffs against Brazil was more about geopolitical strategy rather than the whims of the president. Brazil does 160 billion in bilateral trade with China and recently signed dozens of agreements for investments, including megaports, mines, and the

purchase of jet fighters. Macro-analyst Luke Groman commented, if the plan is to create a Fortress America or Monroe Doctrine economic block, someone should probably tell Trump that Brazil is in South America and is on our team. Because other than that, the most plausible explanation for this is that Brazil already went with China and Russia. Alongside the tariffs on countries, the president announced a 50% tariff on copper. The stated purpose was national security, with Trump posting that copper is a critical component for semiconductors, data centers, aircraft, and numerous other military goods. The U.S. currently imports around half of its copper largely from Chile, Mexico,

and Canada. Over the short term, the spike in copper prices could fuel a ton of inflation. Real estate developer Jason C tweeted, the two largest uses of copper are in electrical and building construction. Thankfully, we don't have any noticeable needs around increased power generation or building, say, more housing. Look, who knows how long-lasting any of these policies will be, but for financial markets, the main takeaway is that another wave of tariff volatility is loaded up for August. Both bond market and stock market volatility are at three-month lows and barely moved on the announcement. Either it's correct to fade everything that Trump says, or traders are going to be caught offside. So that is the macro view as Bitcoin touches a new

all-time high. By the way, at the time of recording, Bitcoin is on its way up again. It jumped from around 112,600 to 113,300 just in the time that I've been recording. There's very little certainty right now, but the trends are in place for lower dollar, rate cuts, and increase volatility. And historically, each of those has been a tailwind for Bitcoin. If you believe the four-year cycle is intact, we're reaching the point where price went parabolic in the past. And if you don't, you're likely watching as Bitcoin becomes a mainstream hedge against secular trends. Dan Tapiero believes we're watching a big shift in the mind of investors, tweeting, Bitcoin as a standard against all analog value is starting to seep into investor consciousness.

Traditional investors are starting to understand how not owning Bitcoin makes it difficult for them to maintain purchasing power. Very slow beginnings of hyper-bitquinization entering the zeitgeist. And that, Friends, is going to do it for today's breakdown. you listening as always, and until next time, be safe and take care of each other. Peace.