- In a week that felt like a bad hangover, Bitcoin has lost trillions, all thanks to Trump’s tariff tantrums on its biggest buddies.
- Will these risky assets survive the storm, or will the old guard of traditional finance come back to claim its throne?
Less than twenty days into his new gig, Trump’s audacious policies are already giving the crypto market a good shake, knocking off 8.29% of its value like a clumsy waiter at a fancy restaurant. The market has been playing it cool so far, but the real question is – how long can it keep up this charade?
2025 is shaping up to be the year of reckoning – a true test for Bitcoin’s claim to fame as a “safe haven.” Buckle up, folks!
The rising pressure on risk assets
The U.S.-China trade war may be as old as your grandma’s favorite recipe, but its effects are hitting harder than a hangover after a night out. Analysts saw this economic rollercoaster coming long before Trump took the wheel, and now it’s as clear as day.
Bitcoin has taken a nosedive, losing over 6% of its market share and wiping out trillions like a kid with a crayon on a white wall. Investors are now playing it safe. How, you ask?
Gold (XAU) has shot up over 3% weekly, reaching a shiny new high of over $2,880 per ounce. Talk about bling!
Meanwhile, the U.S. dollar index is soaring above 109, like a kid on a sugar rush. The 10% tariff on Chinese imports has inflated the index, as fears of an interest rate hike send investors scrambling for bonds like they’re the last slice of pizza at a party.
Despite a “lower-than-expected” U.S. inflation report that kept the Fed from raising rates, rising import costs from Canada, Mexico, and China could push inflation up. This may keep the Fed from cutting rates anytime soon, which is like keeping a kid away from candy.
With the Consumer Price Index (CPI) report for January just around the corner, all eyes are glued to it. An uptick in CPI could send shockwaves through the market, potentially sending Bitcoin tumbling below $90K. Yikes!
Is Bitcoin ready to withstand the pressure?
Remember Trump’s first term? The U.S.-China trade war cranked up like a bad sitcom, and his “Make in America” campaign only gathered more steam. It was a wild ride!
Back in 2018, when Trump started slashing taxes on Chinese goods, Bitcoin took a major hit, dropping 72% and closing the year at a measly $3,740. Ouch!
But here’s the silver lining: U.S. imports from China have dropped by 8 percentage points since then, now making up just 13.5% of total imports. Progress, right?
On top of that, Bitcoin’s status as a “safe haven” has been gaining traction over the past seven years, like a slow but steady tortoise in a race.
Read Bitcoin’s [BTC] Price Prediction 2025–2026
So, while Bitcoin still lags behind Gold in both market cap and investor trust, a double-digit loss seems unlikely at this stage. Even without a rate cut to break resistance, institutional capital is ready to absorb the pressure like a sponge.
However, the “risk” of investing in crypto assets has skyrocketed, making an interest rate hike a major deal-breaker for high-caps. With so much on the line, keeping an eye on the U.S. economic calendar is more crucial than ever. Grab your popcorn, folks!
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2025-02-06 14:19