Bitcoin Expected to Benefit Regardless of Trump’s Trade War Outcome
President Trump's recent tariffs have affected financial markets, including cryptocurrencies. A memo from Bitwise Asset Management suggests that these tariffs could ultimately benefit Bitcoin.
- The crypto market experienced significant sell-offs, with Bitcoin falling about 5%, Ethereum down 17%, and XRP down 18% due to a 25% tariff on imports from Canada and Mexico and a 10% tariff on China.
- The US dollar increased over 1% against major currencies, leading to forced liquidations affecting leveraged traders, amounting to approximately $10 billion, marking the largest liquidation event in crypto history.
- Bitwise's Chief Investment Officer Matt Hougan and Head of Alpha Strategies Jeffrey Park present a bullish outlook for Bitcoin, citing the 'Triffin Dilemma' and Trump's trade restructuring goals.
- Park outlines two scenarios where Bitcoin could benefit from Trump's trade policy:
- Scenario 1: If Trump weakens the dollar while keeping interest rates low, Bitcoin could attract more investment as risk appetite increases among US investors.
- Scenario 2: If a prolonged trade war leads to significant monetary stimulus, historical trends show that such liquidity injections are favorable for Bitcoin as it is seen as a deflationary and decentralized asset.
As of now, Bitcoin is trading at $98,557.
