🇺🇸 Trump’s trade tariffs are about to make Bitcoin 💣 “violently higher” in the long run, according to Jeff Park, head of alpha strategies at financial services firm BitWise. Why? Because the US dollar is about to get a major haircut in global currency markets, and US government securities are about to become less attractive. 😉
Park argues that tariffs are being used to weaken the US dollar in international trade, correcting trade imbalances and making US exports more attractive. He even dropped a reference to the “Plaza Accord 2.0” – a 1985 agreement between the US, Japan, West Germany, France, and the UK to weaken the US dollar. 🤓
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Trump tariffs send crypto markets plummeting 📉
Despite the potentially positive long-term price outlook, as argued by Jeff Park, crypto markets took a nosedive in reaction to President Trump’s recently announced tariffs on Canada, China, and Mexico. 😱
The price of Bitcoin declined by approximately 7.2% over the last seven days, but it fared better than most altcoins. Ether (ETH), SOl (SOL), and XRP (XRP) fell by roughly 11.6%, 19.3%, and 16.6% over the same period, respectively. 📉
Investors see the trade war potentially heightening inflation in the coming months and have sought refuge in risk-off assets as a hedge against macroeconomic uncertainty. 😌
US dollar shows strength in the short term 💪
The US Dollar Currency Index (DXY), which measures the US dollar’s strength against other fiat currencies, has been steadily rising since October 2024. In January 2025, the dollar’s strength pulled back marginally but has partially retraced lost ground in the first several days of February 2025. 📈
A rising US dollar and rising US dollar yields could spell trouble for the short-term price of Bitcoin and other risk-on assets, as investors pivot from riskier assets to US government securities. 😕
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2025-02-03 01:24