Trump’s Tariffs May Boost Bitcoin Demand Amid Economic Uncertainty

Crypto markets have underperformed expectations during the Trump Administration, with Bitcoin dropping from over $100,000 to around $80,000 in March.

Key factors influencing this trend include:

Increased correlation with traditional assets, affected by macroeconomic uncertainty.
Concerns over U.S. tariffs leading to a potential global recession.
Shift in investor preference towards gold, which has risen 18% year-to-date as a safer asset.

Analysts note that economic uncertainty may prompt renewed interest in Bitcoin as a digital alternative to gold. Zach Pandl from Grayscale suggests potential stabilization post-tariff announcements could shift focus back to positive fundamentals in the crypto sector.

Pandl estimates tariffs have reduced economic growth by 2% this year but believes upcoming tariff announcements could lead to market rallies. He asserts that tariffs might weaken the dollar's dominance and favor Bitcoin as an alternative asset.

Pandl maintains confidence in Bitcoin reaching new all-time highs this year, despite current market conditions.