{"id":2898,"date":"2025-02-03T19:13:09","date_gmt":"2025-02-03T19:13:09","guid":{"rendered":"https:\/\/coinsvalue.net\/blog\/despite-bitcoin-crash-bitwise-predicts-violent-surge-amid-trumps-tariffs\/"},"modified":"2025-02-03T19:13:09","modified_gmt":"2025-02-03T19:13:09","slug":"despite-bitcoin-crash-bitwise-predicts-violent-surge-amid-trumps-tariffs","status":"publish","type":"post","link":"https:\/\/coinsvalue.net\/blog\/despite-bitcoin-crash-bitwise-predicts-violent-surge-amid-trumps-tariffs\/","title":{"rendered":"Despite Bitcoin Crash, Bitwise Predicts \u2018Violent\u2019 Surge Amid Trump\u2019s Tariffs"},"content":{"rendered":"

The Bitcoin price sank by more than 13.5% over the weekend, dropping as low as $91,201 on Binance. The sell-off followed US President Donald Trump\u2019s announcement of new trade tariffs. The administration levied a 25% tariff on most imports from Canada and Mexico, added a 10% tax on Chinese goods, and imposed a 10% tariff on Canadian energy resources.<\/p>\n

While market observers typically view such aggressive moves as a negative for risk assets, one prominent voice at Bitwise Invest sees a wildly different scenario, predicting that these tariffs could fuel a \u201cviolent\u201d long-term rally in Bitcoin.<\/p>\n

Why Tariffs May Supercharge Bitcoin<\/h2>\n

Jeff Park, Head of Alpha Strategies at Bitwise Invest, argues<\/a> that these tariffs cannot be understood simply as a response to trade imbalances but should be viewed against the broader backdrop of the so-called Triffin dilemma. In Park\u2019s words, \u201cThe US wants to keep its ability to borrow cheaply, but rid its structural overvaluation and constant trade deficits\u2014enter tariffs.\u201d<\/p>\n

He suggests that, by using tariffs as a bargaining chip, the White House is looking to create a new multi-lateral agreement\u2014akin to a \u201cPlaza Accord 2.0\u201d\u2014aimed at weakening the US dollar. This would potentially oblige foreign governments to reduce their US dollar reserves or to hold longer-duration Treasuries, thereby keeping yields low without officially enacting yield curve control.<\/p>\n

Park also ties this strategy to the president\u2019s personal incentives. He believes Trump\u2019s \u201c#1 goal\u201d is to drive down the 10-year Treasury yield, in part because cheaper long-term financing would benefit real estate markets. According to Park, such a push for lower yields dovetails with a deliberate move to weaken the dollar\u2014two conditions that, in his view, create a perfect environment for Bitcoin to flourish.<\/p>\n

\u201cThe asset to own therefore is Bitcoin. In a world of weaker dollar and weaker US rates, something broken pundits will tell you is impossible (because they can\u2019t model statecraft), risk assets in the US will fly through the roof beyond your wildest imagination, for it is likely a giant tax cut will have to accompany the higher costs borne by the loss of comparative advantage,\u201d Park writes.<\/p>\n

His thesis is that the \u201conline and onchain\u201d nature of today\u2019s economy will funnel frustrated citizens across the globe toward alternative stores of value\u2014namely Bitcoin. He believes both sides of any prolonged tariff war will discover that BTC offers a refuge from the fallout, leading to what he describes as a much higher price trajectory.<\/p>\n

\u201cSo while both sides of the trade imbalance equation will want Bitcoin for two different reasons, the end result is the same: higher, violently faster\u2014for we are at war. TLDR: You simply have not yet grasped how amazing a sustained tariff war is going to be for Bitcoin in the long run,\u201d Park claims.<\/p>\n

Tariffs As A Risk Asset Drag<\/p>\n

Not all analysts share Park\u2019s optimism. Alex Kr\u00fcger, an economist and trader from Argentina, disagrees<\/a> with the notion that tariffs of this magnitude inherently favor Bitcoin. He warned that \u201cBitcoin is mainly a risk asset.\u201d<\/p>\n

He added: Tariffs this aggressive are very negative for risk assets. And the economy will take a hit. The tariffs announced are considerably worse than what was expected by the market, as gradual tariffs or delayed implementation were seen as alternatives. So the S&P futures will open deeply in the red tonight and flush.\u201d<\/p>\n

In Kr\u00fcger\u2019s view, Bitcoin remains a high-beta asset often correlated with equity markets. When a major macro shock\u2014like a sudden hike in tariffs\u2014hits, investors typically rotate into safe havens rather than riskier holdings such as stocks or cryptocurrencies. He pointed out that the sell-off in crypto over the weekend might be explained by the market reacting to an \u201cunexpectedly harsh\u201d tariff announcement.<\/p>\n

\u201cThe hope for crypto is that it has already dropped a lot in anticipation,\u201d Kr\u00fcger observed, hinting that digital assets may find a local bottom if the initial shock has been fully absorbed. However, he emphasized the persistent uncertainty ahead, including the possibility of retaliation by targeted nations. A swift resolution to the trade dispute could trigger a bounce, whereas an escalation could deepen market jitters.<\/p>\n

Kr\u00fcger also cautioned that the Federal Reserve might turn hawkish if tariffs stoke inflation\u2014an outcome that rarely bodes well for high-growth or risk-prone assets. Still, he hasn\u2019t ruled out fresh all-time highs in equities later this year:<\/p>\n

\u201cI still don’t think the cycle top is in, and expect equity indices to print ATHs later in the year. But the probability of being wrong has increased. Particularly on the latter. As I said a week ago, I’ve taken my long-term hat off. This is a traders’ market.\u201d<\/p>\n

At press time, BTC traded at $94,000.<\/p>\n

\"Bitcoin<\/p>\n","protected":false},"excerpt":{"rendered":"

The Bitcoin price sank by more than 13.5% over the weekend, dropping as low as $91,201 on Binance. The sell-off followed US President Donald Trump\u2019s announcement of new trade tariffs. The administration levied a 25% tariff on most imports from Canada and Mexico, added a 10% tax on Chinese goods, and imposed a 10% tariff…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[25],"tags":[56,391,55,69,183,61,120,121,33,1677,294],"class_list":["post-2898","post","type-post","status-publish","format-standard","hentry","category-cryptocurrency-market-news","tag-bitcoin","tag-bitcoin-crash","tag-bitcoin-news","tag-bitcoin-price","tag-bitwise","tag-btc","tag-btc-news","tag-btc-price","tag-cryptocurrency-market-news","tag-jeff-park","tag-trump"],"_links":{"self":[{"href":"https:\/\/coinsvalue.net\/blog\/wp-json\/wp\/v2\/posts\/2898","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/coinsvalue.net\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/coinsvalue.net\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/coinsvalue.net\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/coinsvalue.net\/blog\/wp-json\/wp\/v2\/comments?post=2898"}],"version-history":[{"count":0,"href":"https:\/\/coinsvalue.net\/blog\/wp-json\/wp\/v2\/posts\/2898\/revisions"}],"wp:attachment":[{"href":"https:\/\/coinsvalue.net\/blog\/wp-json\/wp\/v2\/media?parent=2898"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/coinsvalue.net\/blog\/wp-json\/wp\/v2\/categories?post=2898"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/coinsvalue.net\/blog\/wp-json\/wp\/v2\/tags?post=2898"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}