87: James Lavish ON: Tariffs, Treasuries, and the Bitcoin Wild Card

The Fed Wants to Be a Hedge Fund—Here’s What That Means for Bitcoin



James Lavish—managing partner of the Bitcoin Opportunity Fund and author of The Informationist—returns for a sharp, high-stakes conversation about markets, monetary policy, and the future of Bitcoin. With a background in hedge funds and Wall Street, James brings deep insight into how liquidity, debt, and geopolitical shifts are shaping the investment landscape.

In this episode, you’ll hear James break down the trillion-dollar “basis trade” threat looming over global finance—and why the Brookings Institution is floating the idea of the Federal Reserve taking it on directly. You’ll learn how institutions like BlackRock are quietly stacking Bitcoin, why MicroStrategy’s playbook is nearly impossible to replicate, and what SAB 121’s repeal means for Bitcoin’s integration into traditional banking. We also unpack volatility, risk signals, and why all eyes are on liquidity as the true driver of price action. If you care about macro shifts, asymmetric bets, and the collision of old and new finance, this one’s unmissable.

You’ll Learn:

• How the trillion-dollar “basis trade” threatens market stability
• Why the Fed might start behaving like a hedge fund
• How volatility forces institutions to liquidate Bitcoin first
• What liquidity cycles reveal about Bitcoin price movement
• Why MicroStrategy’s model can’t easily be copied
• How policy shifts like SAB 121 impact Bitcoin custody and lending
• Why institutional Bitcoin buys don’t always move the price
• What global treasury markets signal about U.S. economic fragility
• How margin rules and volatility drive systemic risk
• Why long-term Bitcoin conviction hinges on liquidity, not hype

Timestamps:

[00:00] Introduction

[03:10] What the Fed watches when making rate decisions

[05:35] How global liquidity ties into Bitcoin’s price

[06:45] Why the US relies on foreign treasury buyers

[08:05] The problem with holding US treasuries during inflation

[10:30] How the “basis trade” works and why it’s dangerous

[13:20] The scale and leverage behind today’s basis trade

[15:45] What it means if the Fed takes hedge fund positions

[18:05] How Bitcoin reacts to macro uncertainty

[20:14] What a Bitcoin sell-off on weekends signals

[22:52] The role of haircut changes during market stress

[25:25] What makes liquidity broader than just money supply

[27:38] Why Bitcoin may peak after liquidity peaks

[29:38] How multiple macro factors shape Bitcoin price

[31:12] How convertible bonds helped MicroStrategy scale

[35:20] Why new Bitcoin companies can’t mimic MSTR returns

[37:18] What 21.co and Jack Mallers are building

[40:02] The impact of SAB 121 on banking and Bitcoin custody

[42:10] How Chokepoint 2.0 disrupted Bitcoin funds

[45:05] How banks will integrate Bitcoin into lending

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Resources Mentioned:

Bitcoin Opportunity Fund | Website

Brookings Institution | Website

Strategy | Website

Metaplanet | Website

21 | Website

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