Firi Weekly: Tariff-ic Uncertainties

Legislative Bill Misses Crypto Relief:
- Trump's "Big Beautiful Bill" passes without the crypto tax reforms the industry hoped for, though its macroeconomic impact will ripple through digital asset markets.
Crypto Goes Banking:
- Circle and Ripple file for national bank charters as crypto firms push deeper into traditional finance territory.
Tariff Deadline Looms:
- Markets brace as Trump's 90-day tariff pause expires Wednesday. Few countries have secured trade deals to avoid new levies.
Ancient Bitcoin Awakens:
- A mysterious $8.6 billion transfer of 80,000 bitcoins dormant since 2011 marks the largest "Satoshi Era" movement ever recorded.

Last Week’s Big Three

The Big Beautiful Bill Passes: Late Monday, the U.S. Senate passed President Trump's signature legislative package known as the ‘Big Beautiful Bill’, delivering tax cuts while boosting defense spending and slashing social programs. The House followed suit Thursday, and Trump signed it into law Friday. The bill's projected multi-trillion-dollar deficit impact and healthcare coverage cuts have sparked fierce debate.

The crypto industry's hopes were dashed when the final version excluded key tax provisions. The sector had lobbied for changes to airdrop taxation, making staking and mining rewards taxable only upon sale rather than receipt, and creating de minimis exceptions to simplify small crypto transactions. While the bill does not directly impact crypto markets, its macroeconomic effects—detailed in our Behind the Charts section—will impact the market.

Circle Aims for National Trust Bank Status: Circle, issuer of the second-largest stablecoin USDC and recent U.S. public listing, filed for a national bank charter. Days later, Ripple—the company behind XRP—followed suit. Only Anchorage Digital currently holds such a license among crypto firms. The charter enables traditional banking products while offering clients enhanced regulatory certainty and security.

These moves signal crypto's steady integration into traditional finance. As crypto-native firms expand into banking territory, we expect traditional financial institutions to accelerate their digital asset strategies in response.

Robinhood Launches Ethereum Layer 2 and Tokenized Stocks: At EthCC, Ethereum's premier technology conference, U.S. retail brokerage giant Robinhood shared its intention to launch an Ethereum Layer 2 blockchain built on Arbitrum's technology stack. The network inherits Ethereum's security and decentralization while offering its own blockchain environment.

Robinhood also launched tokenized stocks for EU clients, issuing publicly-listed securities onchain. The firm offered giveaways of tokenized shares in private companies SpaceX and OpenAI. However, OpenAI quickly clarified these tokens do not represent actual equity, do not have the company's endorsement, and any legitimate OpenAI equity transfer requires explicit approval—which was not granted by the firm.

While increased activity on public blockchains and real-world asset tokenization is encouraging, the OpenAI incident highlights regulatory gaps. Some investors mistakenly believed they held direct OpenAI equity, prompting the company's swift clarification.

Behind the Charts

Chart 1: U.S. Government Debt

The U.S. Congressional Budget Office (CBO), the federal agency that analyzes budget and economic issues, projects Trump's Big Beautiful Bill will add $3.3 trillion to the deficit over the next decade. This compounds an already record-high federal debt of $36.33 trillion, as spending far outpaces tax revenue.

Growing debt could push the Federal Reserve (Fed), the U.S. central bank, to expand the money supply by purchasing more government bonds to suppress borrowing costs—historically bullish for digital assets. However, if markets suddenly lose substantial confidence in the debt trajectory's sustainability, risk assets including crypto could face severe selling pressure.

Chart 2: USD/EUR Rate

The dollar has posted its worst start to a year since 1973, plunging 11.7% against the euro since January. Political uncertainty under Trump—including tariff threats, Fed criticism, and ballooning debt concerns—has driven global investors to dump dollar assets.

Textbook economics suggests a weaker dollar benefits digital assets by making cryptocurrencies more attractive alternatives and cheaper for foreign buyers. But when dollar weakness stems from a political crisis, panic selling can hit risk assets, including crypto, hard.

Chart 3: Daily U.S. REX-Osprey™ SOL + Staking ETF Net Flow

As we reported last week, the first U.S. Solana ETF—and notably, the first to include staking—launched Wednesday, attracting $11.4 million in day-one inflows, marking a solid debut for this pioneering instrument.

A Number to Remember

$8.6 billion

Early Friday saw 80,000 bitcoins worth $8.6 billion move for the first time in 14 years. These coins, originally sent to eight wallets in 2011 during Bitcoin's "Satoshi Era" when creator Satoshi Nakamoto was still actively developing the protocol, represent the largest-ever movement from that period. The owner remains unknown.

On Our Radar

On our radar for the week ahead:

Trump's Tariff Deadline Draws Close: Trump's 90-day tariff pause expires Wednesday, July 9. With few countries having secured trade deals so far, markets face significant uncertainty. Treasury Secretary Scott Bessent signaled that some nations might receive three-week extensions to continue negotiations.
BRICS Response in Focus: The annual BRICS conference—which includes Brazil, Russia, India, China, South Africa and new members—runs through today. Trump has threatened 10% tariffs on what he calls anti-American BRICS policies, making the bloc's response closely watched.
Fed Minutes Could Signal Rate Cut Timing: Wednesday's Federal Open Market Committee (FOMC) minutes will reveal Fed policymakers' detailed discussions from their last meeting. Markets are parsing whether the Fed might cut rates as early as July or stick to September timing.

Mads Eberhardt07/07/2025

Should not be considered financial advice. Crypto may involve high risk.