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June 13th, 2025

Geopolitical Shock and Tariff Tensions – Why We Hold Our Position

Key Takeaways:

  • Israel strikes Iran, escalating Middle East tensions
  • U.S.–China tariff talks sour as Trump pushes for 55% duty
  • Sharp market drop driven more by fear than fundamentals

Yesterday, Israel launched airstrikes on Iran, triggering immediate promises of retaliation. The escalation of military threats introduces heightened geopolitical risk across global markets. For crypto, this comes at a time when Bitcoin was already struggling to break through the $110K resistance, creating strong downside pressure.

At the same time, trade tensions re-escalated: U.S. President Donald Trump proposed raising tariffs on Chinese goods to 55%, up from the 30% levels seen during the recent truce. With China’s exports to the U.S. plunging 34% YoY in May, Beijing could be forced into a settlement — but it hasn’t signed the deal yet. The trade risk implies more inflationary pressure in the U.S., which complicates the Fed’s path to rate cuts, creating more uncertainty for risk assets.

Crypto markets sold off sharply, with fear-driven liquidation taking over despite no structural deterioration in macro or fund flows:

  • Total market cap: down 4.65% ($3.23T)
  • Bitcoin: down 3.1% to $104,500
  • Ethereum: down 8.9% to $2,525
  • Solana: down 9.3% to $144

This was a fear-led flush, not a breakdown in fundamentals. Instead, the selloff reflects short-term risk aversion and uncertainty pricing, especially around war escalation and inflation spillover.

We expect market stabilization once the immediate panic cools. With the macro backdrop still supportive and key resistance levels intact, the next move could be a stronger breakout attempt — potentially with altcoins leading the rebound.

Positioning:

  • Cash: 10% – Held steady to capitalize on volatility
  • BTC: 65% – Core position; watching for recovery above $106K
  • ETH: 20% – Maintained exposure despite volatility; institutional tailwind still valid
  • SOL: 5% – Remains high-beta play; monitoring for sharp reversal potential
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