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  • Trump’s $7T Debt Bet—Market Drop? | Newsletter Bitcoin Week 10 of 2025

Trump’s $7T Debt Bet—Market Drop? | Newsletter Bitcoin Week 10 of 2025

The Bitcoin Newsletter to keep you updated on all things Bitcoin

March 14, 2025

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TL;DR

  • BTC is up

  • Bitcoin dominance is up

  • US Bitcoin Reserve Sparks $370M ETF Outflows

  • Saylor Urges US to Buy 25% of Bitcoin Supply

  • $200M Crypto Bet Before Trump’s Announcement

  • US Declares Bitcoin Strategic!

  • Mike Collins Accepts Crypto Donations

  • Trump’s $7T Debt Bet—Market Drop?

  • US Releases Seized Bitcoin Mining Hardware

  • CleanSpark Grows BTC Holdings Despite Decline

  • Belarus Eyes Crypto Mining Amid U.S. Plans

And much more!

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Bitcoin Price

Crypto is down this week, with BTC up by 0.8% and ETH down by 5.5%:

Bitcoin dominance has increased over the week, starting from 57.53% to a high of 58.6% and ending at 58.07%. Investor sentiment, regulatory changes, technological advancements, and the overall growth of the cryptocurrency sector shape Bitcoin's market dominance. Its reputation as "digital gold" also enhances its position, making it a key player in the market.

It’s going to be interesting to see whether this trend will continue in the short term, as capital in crypto tends to flow initially to BTC and then further out on the risk-curve, starting with altcoins like ETH and then into mid- or low-cap coins.

Bitcoin has struggled to reclaim the $90,000 level after falling below $95,000 on February 24. Recent volatility has been the highest since Q3 2024, with Bitcoin’s annualized realized volatility surging, according to Glassnode.

Glassnode

While traders brace for more price swings ahead of the first-ever U.S. crypto summit at the White House, analysts have pointed to the sharp decline in the U.S. Dollar Index (DXY) as a potential catalyst for Bitcoin’s next move.

Real Vision’s chief crypto analyst, Jamie Coutts, noted that DXY’s recent three-day decline of over 3% ranks among the four largest drops in history. Coutts’ historical analysis of similar declines since 2013 suggests that Bitcoin has a 100% probability of rising when the dollar falls by 2.5% or more. He projected that Bitcoin could reach an all-time high (ATH) by May 2025, with a best-case scenario pushing BTC to $143,000.

Julien Bittel, macro research head at Global Macro Investor, echoed this bullish outlook, emphasizing that easing financial conditions typically boost risk assets, including Bitcoin.

Despite optimism linked to DXY’s decline, Bitcoin’s price dropped by over 5% in 24 hours to $88,100, reacting negatively to former U.S. President Donald Trump’s announcement of a Strategic Bitcoin Reserve.

Market participants initially expected a government initiative to acquire more Bitcoin with taxpayer funds, but the reserve will consist only of BTC already seized by the U.S. government. Crypto strategist David Sacks confirmed that the reserve’s establishment “will not cost taxpayers a dime.”

The announcement disappointed traders hoping for a more aggressive government-backed Bitcoin accumulation. Capital markets analyst The Kobeissi Letter noted that the reserve merely ensures the U.S. government retains its existing Bitcoin holdings rather than purchasing additional BTC. This led to an 8.7% drop in Bitcoin’s price from $92,790 on March 6 to an intraday low of $84,700 on March 7.

Bitcoin’s price downturn was exacerbated by ongoing outflows from spot Bitcoin ETFs, which have seen withdrawals totaling $3.87 billion over the past two weeks. On February 25 alone, Bitcoin ETFs saw $1.14 billion in outflows—the largest single-day withdrawal since their inception. On March 6, another $134.3 million was pulled from these funds.

Crypto insights firm Alva attributed these outflows to uncertainty surrounding Trump’s Bitcoin reserve announcement, as well as growing concerns among institutional investors about Bitcoin’s decentralization. Major ETFs like Fidelity’s FBTC and ARK’s ARKB recorded significant withdrawals, reflecting broader market trepidation.

Bitcoin’s immediate price trajectory depends on its ability to hold above critical support levels. The 200-day exponential moving average (EMA) at $85,550 serves as a key support level, with a daily close below this threshold potentially triggering a drop toward $81,500 or even $78,200. Conversely, reclaiming resistance between $92,800 (100-day EMA) and $94,000 (50-day EMA) could pave the way for Bitcoin to retest $100,000.

Popular trader Daan Crypto Trades highlighted the key price ranges, noting that Bitcoin must reclaim $90,800 to maintain bullish momentum, while an eventual break toward an ATH of $109,000 remains a long-term target.

Bitcoin (BTCUSD) Analysis:

As of March 7, 2025, Bitcoin (BTC) is trading at $87,643, down -5.02% on the day. The short-term outlook remains bearish, with support at $80,000 and resistance at $93,000. In the medium term, BTC has broken below key levels, with a downside target of $77,810 - $81,630, reinforcing a negative trend. The long-term outlook is neutral, with support at $72,000 and resistance at $106,000. A move above $92,000 could signal recovery, while a drop below $80,000 may trigger further declines.

Expected Trading Ranges:

  • Bitcoin (BTC): Support at $80,000; Resistance at $93,000.

Market Outlook:

Bitcoin faces short-term uncertainty, with key support at $85,550 (200-day EMA) and resistance at $92,800. ETF outflows and disappointment over Trump’s Bitcoin Reserve have pressured prices, but historical correlations with a weakening DXY suggest a potential rally. If BTC holds support, a rebound toward $100,000 remains plausible, while failure could lead to a retest of $78,200.

BTC/ETH ratio has seen an increase:

Over the last six days, the BTC to ETH exchange rate has generally increased, rising from 37.52 ETH on March 2 to 40.20 ETH on March 8, marking an overall 7.14% increase. Despite a brief dip on March 7 (-0.90%) and March 8 (-0.90%), the trend remained upward, with notable gains on March 3 (6.52%) and March 6 (1.16%). This suggests that Bitcoin has been gaining strength against Ethereum over the past week.

“Bitcoin BTC is King. All the alt coins and memes are basically court jesters trying to pick each others’ pockets”

Financial News

Bitcoin ETFs saw $370 million in outflows on March 7 following President Trump’s executive order establishing a US Bitcoin reserve. The order did not mandate government purchases, disappointing investors. Analysts noted market expectations were higher, triggering a 2% Bitcoin price drop and futures decline.

However, the reserve’s existence could drive institutional and nation-state adoption. While some view the reaction as a "sell the news" event, others see long-term bullish implications, as the US acknowledges Bitcoin’s strategic role in global finance. Experts believe financial institutions may now face pressure to increase BTC allocations.

Michael Saylor has proposed that the U.S. government acquire 5–25% of Bitcoin’s total supply by 2035 as a Strategic Bitcoin Reserve. Presented at the White House Crypto Summit, his plan emphasizes a "Never sell your Bitcoin" policy, predicting the reserve could generate $10 trillion annually by 2045.

Trump recently signed an executive order establishing a Strategic Bitcoin Reserve, though without immediate purchasing plans. Saylor’s proposal exceeds Wyoming Senator Cynthia Lummis' prior suggestion of a 5% allocation. Meanwhile, Strategy continues accumulating Bitcoin, recently purchasing $2 billion worth, bringing its total holdings to nearly 500,000 BTC.

A trader placed $200 million in long positions on Bitcoin and Ethereum with 50x leverage just hours before Trump announced the US Strategic Crypto Reserve. The high-risk bet would have been liquidated by a 2% drop but instead soared as BTC surpassed $94,000, adding $300 billion to crypto’s market cap.

The timing has sparked speculation about insider knowledge, as blockchain transparency exposes all transactions. With Bitcoin recovering from a 25% decline, this move has drawn attention to potential market manipulation or an incredibly well-timed gamble. The incident raises questions about privileged access to market-moving information.

A Bitcoin wallet linked to the defunct darknet marketplace Nucleus has reactivated after nearly a decade, transferring $77.5 million worth of BTC to three new addresses. The wallet, which had been dormant since Nucleus shut down in April 2016, still holds $365 million in BTC. The marketplace facilitated illegal transactions before its sudden closure, sparking theories of an exit scam or law enforcement action.

This reawakening follows a broader trend of long-dormant wallets moving funds amid Bitcoin’s price surge. With BTC reaching new all-time highs, several wallets dating back to the early 2010s have resumed activity, hinting at further shifts in long-lost holdings.

Bitwise Asset Management has introduced the Bitcoin & Gold ETP (BTCG) on Euronext Paris and Amsterdam, offering dynamic exposure to both assets. BTCG reallocates funds between bitcoin and gold based on market conditions, increasing bitcoin exposure during uptrends and shifting to gold during downturns.

The ETP holds real bitcoin in cold storage and Pax Gold (PAXG) in London vaults. With a 1.49% annual expense ratio, BTCG rebalances monthly using ULCER indices to optimize risk-adjusted returns. As institutional demand for alternative safe-haven assets grows, BTCG provides a diversified investment strategy combining bitcoin’s growth with gold’s stability.

Adoption News

White House crypto czar David Sacks confirmed the US is treating Bitcoin as a strategic reserve asset, emphasizing its scarcity and long-term value. A government-wide audit will determine total crypto holdings, with Treasury Secretary Scott Bessent managing a separate digital asset stockpile.

While Trump named Ethereum, Solana, XRP, and Cardano, Sacks cautioned against overanalyzing the inclusion. Analysts suggest Bitcoin’s price may rebound as policies unfold. The executive order signals potential government acquisitions, reinforcing Bitcoin’s role in financial markets. Experts predict the reserve strategy could drive broader nation-state adoption of Bitcoin over time.

Georgia Congressman Mike Collins now accepts crypto donations, including BTC, ETH, LTC, DOGE, SOL, and USDT, for his reelection campaign. He aims to destigmatize crypto and embrace emerging technologies. Collins has invested heavily in digital assets, disclosing holdings in ETH, AERO, VELO, and even memecoins like SKI.

His move aligns with a broader political shift, as past candidates like Robert F. Kennedy Jr., Vivek Ramaswamy, and Donald Trump embraced crypto donations. Following Trump’s reelection, the U.S. government softened its stance on crypto, with the SEC dropping lawsuits and engaging with industry leaders.

New Hampshire’s Bitcoin reserve bill passed the House Commerce and Consumer Affairs Committee in a 16-1 vote, moving it to a full House vote. If enacted, it would allow the state treasurer to invest up to 5% of certain funds into Bitcoin, the only eligible digital asset. The bill also permits investments in gold, silver, and platinum.

Initially proposing a 10% allocation, it was amended to 5%. New Hampshire joins other states like Texas and North Carolina in advancing Bitcoin-related legislation. The move aligns with growing U.S. interest in state-level Bitcoin reserves, following Trump’s Crypto Strategic Reserve proposal.

U.S. President Donald Trump signed an executive order creating a "Strategic Bitcoin Reserve" and a "Digital Asset Stockpile," seeded with government-seized crypto. The Bitcoin reserve, described as a "digital Fort Knox," will store BTC as a long-term asset. Other cryptocurrencies will form the digital stockpile under Treasury oversight.

The order mandates a full audit of government-held crypto, which includes 198,109 BTC worth $17.87 billion. No additional purchases will be made beyond seized assets. This move aligns with Trump’s earlier statements about including Bitcoin, Ethereum, XRP, Solana, and Cardano in a national crypto reserve.

Donald Trump’s administration is reportedly aiming to weaken markets in the short term to lower refinancing costs on $7 trillion in debt due within six months. Instead of refinancing at high interest rates, the strategy involves creating uncertainty—such as imposing tariffs—to push investors toward bonds, lowering yields.

As yields drop, the Federal Reserve gains room to cut rates, further reducing borrowing costs. While tariffs typically raise inflation, market uncertainty is driving investors away from stocks and into bonds, aligning with Trump’s goal of securing cheaper refinancing and potential long-term economic stability.

Mining News

U.S. authorities have begun releasing seized Chinese-made Bitcoin mining machines, though many remain in custody. The crackdown, led by U.S. Customs and Border Protection, targeted equipment from Bitmain, MicroBT, and Canaan, citing FCC regulations and trade restrictions on Chinese technology.

Some rigs contained AI chips from restricted firms like Sophgo. Up to 10,000 machines, valued at over $5 million, were stranded at U.S. ports. The seizures disrupted operations for U.S.-based miners, who rely on regular upgrades. The U.S., which holds 43.8% of Bitcoin’s hashrate, remains in a mining battle with China, which leads with 45.8%.

MARA Holdings' Bitcoin production dropped 6% in February due to increased mining difficulty and fewer operational days. The company’s stock rose 1.3% but remains down 21% over the past month. Rising energy costs, up 70% year-over-year to $127.4 million in Q4 2024, further strained profitability.

MARA is finalizing a 40-megawatt data center in Ohio to expand operations. Other miners, including Bit Digital and Bitdeer, also reported declining production and revenue. Bitcoin traded above $87,300, up over 1% in 24 hours, but mining challenges persist amid growing competition and macroeconomic uncertainty.

Bitcoin’s price decline has hit U.S. mining firms hard, with the market cap of 14 top public miners dropping 22%—losing $6 billion in February, according to JP Morgan. Mining revenue also fell, averaging $54,300 per EH/s daily, down 5% month-over-month.

Bitcoin’s price, now at $87,300, is down 20% from its January high of $108,000, exacerbating operational costs. Trade war tensions have further pressured risk assets like Bitcoin, forcing miners to adapt. Some firms have pivoted to AI computing, but competition from China’s Deepseek model has disrupted this shift.

CleanSpark expanded its Bitcoin treasury by 6% in February, mining 624 BTC worth $55 million. The company now holds 11,177 BTC, ranking as the fifth-largest corporate Bitcoin holder. Despite reporting $162.3 million in Q1 revenue and $241.7 million in profit, its stock is down over 10% this year due to falling Bitcoin prices.

Unlike rivals diversifying into AI, CleanSpark remains focused solely on Bitcoin mining. The industry faces pressure from macroeconomic uncertainty and the upcoming Bitcoin halving, though some miners are exploring AI-related ventures to counter losses.

Belarus President Alexander Lukashenko is considering leveraging the country’s surplus electricity to mine cryptocurrencies. He referenced the U.S. government’s potential creation of a national crypto reserve as a reason for the move. Countries like Bhutan and El Salvador already mine Bitcoin using renewable energy sources.

Lukashenko emphasized the increasing global demand for crypto and suggested Belarus could benefit from entering the sector. The proposal aligns with broader trends of state-backed crypto initiatives as governments explore digital assets' strategic value in the evolving global economy.

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