1/26/25
China playing an Invasion Game
In This Week's Issue:
Equities: Trumps Impact
- Panama Canal
- Greenland
Digital Assets
- Bitcoin
- XRP
Equities â Trumps Impact
Panama Canal
âIâm taking back the Panama Canal, Greenland will become part of America, and Canada will become the 51st state of America!â
On the surface, these may sound like typical Trump confidence, but in reality, theyâre negotiation tactics straight out of his playbook.
The Panama Canal, originally constructed by the French in the 1880s and completed by the U.S. in 1914, remains one of the worldâs most crucial shipping routes. About 14,000 ships pass through each year, making it a key asset in global trade. The U.S. controlled the canal until 1999 when it was handed back to Panama, but the financial leverage America had over it never fully disappeared. America essentially put Panama in debt to finance the canalâs construction, ensuring repayment throgh its revenue. Imagine Panama with a financial noose around its neck, while America pulls the strings from behind the curtain. Thatâs the reality of influence and control in geopolitics.
Now, Trump is sounding the alarm because China is creeping in, looking to gain influence over a canal built with U.S. money and sitting in its strategic backyard. Thatâs not just a power playâitâs a direct challenge to U.S. dominance in global trade.
It would be a direct geopolitical slap in the face.
Will the U.S. actually take the canal back? Doubtful. But the rhetoric forces the issue back onto the table. Itâs a warning to China: donât think you can quietly cut a deal with Panama without consequences. As China continues tightening its grip on global tradeâowning 93 African ports across 53 countriesâitâs clear they are playing for keeps. The Suez Canal might not be far down their list either.
Despite understanding that the west is slowly losing its power, Trump's claims around the Panama Canal should slow down the deterioration of the western world. Which for most of the readers should be a blessing in disguise. Letâs face it, China is controlling more and more of the worldâs trade.
Just look below, China now owns 93 African ports across 53 African countries. Itâs hard to see how this ends well.. especially when Iâm sure the Suez Canal isn't off the table.
Greenland
Trump has also thrown Greenland on his acquisition hit list, sending Trump Jr. for a trip to scope it out. Officially, Greenland is part of Denmark and has home to just 50,000 people (which no one really seems to care about..). But forget populationââthe real prize here is resources. Greenland holds significant untapped natural resources, including a number of offshore oil pockets that Iâm sure Trump wouldnât mind dropping a straw in to.
Greenland I suspect, is controlled by European Greenies that wonât allow them to explore or extract their own resources. This heavily impacts the lives of their citizens and could unlock a large number of jobs and ecoromic growth/wealth for the nation if the US was able to shake the cage.
Imagine if you lived in Greenland and Trump kicked the greenies back to mainland Europe so you could start drilling and exploring. It would open the financial doors to another world. Capital would flood the sector and spill over into the broader economy. Infrastructure in schools, medical facilities, and roadsâwould improve, and locals would see a higher standard of living.
Sounds like a win-win to me.
Trumpâs approach will likely be more sophisticated than simply âbuyingâ Greenland. If he can't just buy it, he'll get creative. Trump would likely implement US based companies to explore, drill and finance the mineral expansion. Financing is where the magic is. He will promise future prosperity and get buy in from the locals. He will in-debt Greenland to the U.S. and Greenland will be forced to repay with its future resource revenues.
Either way, he Owns them...Sound familiar?
This will be good for Greenland initiallyâwages and productivity will increase, however, this also puts that noose around the neck of Greenland to obey the US long into the future. And boy, if they ever try to step out of line... well, you can probably guess how that ends.
Meanwhile, China continues its dominate the Natural Resource sector. Did we really start to think that the Chinese care about the climate? Theyâre ramping up mining while making the West more dependent on their resources. We have been sold an agenda that is so far from the truthââwe need these minerals to survive, yet we are just being charged a pretty penny from our Chinese "friends" to keep the world spinning around.
The picture is clear: China wants to own everything. Trump is trying to slow down the process and this is why he started throwing around these bold claims.
Unfortunately, the damage has been done. And like a rock sinking in the ocean, the deeper it goes the faster it falls.
Digital Assets
Bitcoin
Global liquidity recently saw a small decline, which has been reflectedââthough a lesserââdegree in the Bitcoin's price.
It looks as though M2 is finding its bottom, which could support a move higher in Bitcoin. With the FED coming out with interest rates this week it wil be interesting to see how this plays out. At the moment we are expecting an unchanged rate, but as always, the market will likely be on pause until we have certainty of the rate outlook for the next few months.
The M2 chart above correlates to what we are seeing in the MVRV Z-score chart that has shown Bitcoin getting overpriced at anything above a 7. At current levels of a 3, we still have room to move to the upside. Historically, Bitcoin doesnât stay in a range for long before making its move, but it does take serious price action to 'move the needle.'
(In case youâre newer here, MVRV Z-Score: was discussed in the previous newsletters. Read those to get up to speed, or... google it).
On his third day in office, Trump signed an executive order to make America the leading country in crypto development and to begin creating a stockpile of crypto within the FED. This brought Bitcoin lovers some distress. Trump didnât specifically mention Bitcoin, which means this opens the door for other cryptocurrencies and cryptocurrency projects to grow and prosper in the US. Overall, this is a great sign for crypto in the long run despite its volatility at the moment.
To me, this looks similar to the Dotcom Bubble of internet stocks. Most crashed 95% during the bubble, and (a majority) most of the projects ended up being worthless. However, names such as Amazon and Microsoft proved their value in the long term and were able to recover. Bubbles themselves are not necessarily a bad thingââit brings capital into the market, allowing innovation so that companies can continue to develop their 'next big thing.' It is then up to the market to decide where the value is being created.
Bitcoinâs been in an uptrend for two years. The question is: what takes it down? Filtering out media noise and focusing on fundamentals keeps me sane in times of manipulation and evaluate my risk.
Although itâs hard to have a clear picture without more price action, I still have to be mindful of the worst-case scenario.
The orange chart is the previous bitcoin top in April of '21. Wyckoff schematics are another tool I use to see whether price action is likely to turn around. You can see that we could be in an early innings of a Wyckoff distribution. This, combined with the two previous charts, has me thinking.. "Which one of you is lying?" Or does the upthrust after distribution give us enough strength to get a higher MVRV Z-score and confidence that the rally is ending?
Keep in mind how the media machine works. They want to release news at the right time to make retail believe that the price will continue going up. What could be the top-of-cycle narrative that manipulates retail into belief? Maybe its Trumpâs crypto antics with the Trump coin? Or is the FED adopting crypto enough of a media blast to drive the hopium train through the roof? Iâm sure they have something else in their back pockets just in case they need to distribute onto retail.
Either way letâs let the market tell us what it wants to do. All we can do is position ourselves accordingly and understand the risks we have ahead.
XRP
Back in 2018, XRP caught my attention as an alternative and likely a better way to send money globally. Ripple, the company behind the XRP token, has developed a ledger that supports cheap, and fast transactionsââa far superior to the current method of sending money (Swift). Even in comparisson to Bitcoin, it is quite impressive (proof below).
Swift transactions take longer to settle and cost more than Bitcoin. And no, I donât believe it is a ânew moneyâ but it does have advantages over the old systems we are familiar with. Think of it like using Visa cards versus checksââmoney itself doesn't change, but the medium for transferring it evolves with technology. Faster, cheaper, and more convenient approaches always win out. The use case for XRP intrigues me, and after living all over the world, I can see how it could become a valuable tool in the global financial system.
In terms of price, if your patience wasnât tested on this one, you must have some serious Zen. This bad boy has been beaten down since the 2018 bull runââso much so that a lot of people thought it was dead. The SEC suing ripple for the release of unregistered securities being the catalyst. Now that Ripple has the majority of the case behind them and XRP was deemed not a security, the price has followed suit. Nothing like a little Trump election win to really get it rolling.
Over the last 84 days, XRP's price has surged approximately 520%. This has more than paid for my patience. You might be wondering, "How much higher can this thing go?"
Let's speculate: XRP created a very similar structure to that of ETH in 2018 with a perfect touch of the 4.236 Fibonacci extension. That confluence, with waves of equal length of the most recent break out, get us another +/- 200% or a 3x from todays price of $3.12. This would be just over $9 which would be a sufficient reward for the 5 year wait (in my opinion, anyway).
You may notice that I am using XRPâs Market Cap chart so the price chart may be slightly different to the marketcap chart depending on what supply gets released from ripple during that time. For me, I will be taking profit as we approach the $9 price level. This capital will be rotated into other areas of markets where I believe there is better asymmetry.
Not that I donât believe the price of XRP will be significantly higher in the futureââI doââbut I'd rather wait until I see another bottoming structure in before accumulate again. Ohhh the joys to have my patience tested againââsince it has been soo enjoyable this time around.. NOT.
As Buffet says, "Buy great assets and good prices".
When the time comes selling XRP will be bitterweet, but for now, it's goodbye. I'll be back when the time is right. you're cheap again.
Until next time, stay skeptical.
Matt Lieshout
(A kiwi guy living in Utah)
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