Former BitMEX cryptocurrency exchange CEO Arthur Hayes has published a new essay titled «Ski Cut», in which he explores the connections between Donald Trump’s trade tariffs, U.S. monetary policy, and the dynamics of the cryptocurrency market. The author compares the situation in financial markets to an avalanche-prone mountain slope, emphasizing that political decisions can trigger the very “financial avalanches” typically associated with crises.
This is reported by Business • Media
How Trump’s Tariff Policy Affects the Bond and Cryptocurrency Markets
In his essay, Hayes thoroughly examines the consequences of the radical tariff policy of the Trump administration, particularly its ability to provoke “financial avalanches” in the bond market. He highlights that the implemented tariffs caused a sharp decline in financial markets, resulting in multimillion-dollar losses. At the same time, the increase in volatility in the U.S. government bond market — with the MOVE index reaching a local maximum — is a sign of heightened risk and potential instability.
The author emphasizes that the Trump administration deliberately triggered an avalanche that could have destroyed the fiat system, but just a few days later temporarily suspended the imposition of tariffs, leaving them only for China for 90 days. Statements from members of the Federal Reserve and the U.S. Treasury about their readiness to support the stability of financial markets indicate a shift from confidence to a state of uncertainty. This, in turn, contributed to increased volatility and strengthened the position of Bitcoin, which found a local bottom during this period.
The Role of Treasury Bond Buybacks in Market Stabilization
The U.S. Treasury has ramped up its buyback program aimed at increasing liquidity in the bond market. According to Arthur Hayes, this tool allows for raising the price of less liquid securities and reducing their volatility without directly increasing the money supply. The operation helps balance the market by maintaining low yields and a stable bond price, which positively impacts cryptocurrencies, particularly Bitcoin.
At the same time, these programs have a limited scope and are not an endless source of liquidity, but in the short term, they contribute to stabilizing the situation and reducing the risks of a systemic crisis. This allows the government to finance itself at acceptable rates and support asset price growth.
Prospects and Risks for Markets in 2025
According to data collected from 2022 to 2025, the situation in the bond market is very tense. Structural disruptions caused by tariff policy have led to a sharp increase in the yields of 30-year Treasury bonds and threatened stability. This resembles crisis situations from previous years, including the 2008 crisis and the 1998 crisis, which are alarming signals for the global economy.
The author emphasizes that in response, the government and regulators may implement additional measures — from lifting restrictions on banks to introducing new quantitative easing programs — to reduce tension and prevent a systemic crisis. At the same time, assets such as gold and Bitcoin are increasingly becoming protective instruments against political and economic instability.
Overall, the analysis shows that Trump’s policy and the corresponding actions of the government have a significant impact on global financial markets, and cryptocurrency assets, particularly Bitcoin, are becoming key instruments for protection and investment in unstable times.