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In the escalation of global economic friction, President Trump’s tariff imposed on the financial markets this week, with stocks, bitcoin and encrypted currencies intersection. New note From BitWise Management indicates that these opposite winds may eventually push Bitcoin to new horizons – unnstrued about whether Trump’s strategy succeeds or fails.
At the beginning of the week, the encryption market witnessed a severe sale. Bitcoin decreased by 5 %, while Ethereum and XRP are exposed to more severe losses – 17 % and 18 %, respectively. The direct catalyst was to impose a 25 % tariff on most imports from Canada and Mexico, as well as a 10 % tariff in China. In revenge, these commercial partners announced their own counter measures.
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The US dollar reaction by jumping was more than 1 % against the main currencies. This, in addition to the lack of liquidity on the weekend in the encryption markets, led to a wave of forced qualifiers where merchants who were sold on the slope were sold. According to the head of investment staff at BitWise, Matt Hogan, up to $ 10 billion in positions in what he described as the “largest liquidation event in the history of Crypto” was eliminated.
Despite the dramatic procedure of prices, the head of alpha strategies, Jeffrey Park, is still optimistic about the Bitcoin path. He refers to two Tujilin ideas formed his upscale thesis: “Trevin’s dilemma” and the broader goal of President Trump to restructure the dynamics of American trade.
The Triffin dilemma highlights the conflict between the currency that operates as a global reserve – the generation of consistent demand and excessive value – and the need to manage a continuous commercial deficit to provide enough currency abroad. While this situation allows the United States to borrow cheaply, it puts constant pressure on local manufacturing and exports.
“Trump wants to get rid of the negatives, but maintain the positives,” Park explains, indicating that the customs tariff may be a negotiating tool to force other countries on the table – genetically from the 1985 Agreement Agreement, which reduces the value of the dollar in coordination with others the main economies.
Screen: Bitcoin wins, loses Fiat
Park argues that Bitcoin will benefit from two distinguished results for the current Trump trade policy:
Screen 1: Trump succeeds in weakening the dollar (while maintaining low rates)
If Trump is able to maneuver a multilateral agreement-with “Plaza Accord 2.0”-to reduce the dollar estimate without enhancing long-term interest rates, the appetite of risk among American investors may rise. In this environment, it is possible that one of the non -sovereign assets such as Bitcoin, free of capital and mitigation controls, will attract additional flows. Meanwhile, other countries that wrestle with the repercussions of the weaker dollar may spread financial and critical stimulation to support their economies, and may lead more capital towards alternative assets such as bitcoin.
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“If Trump is able to bully in this position, there are no better assets than bitcoin. Low prices will lead to the appetite of American investors, which sends high prices. Abroad, the two countries will face weak economies, and will turn into classic economic stimulation of compensation, which leads again To the high prices of bitcoin. “
Screen 2: A long trade war and a huge money printing
If Trump fails to secure a broad al -Qaeda deal and the trade war continues, the global economic weakness will definitely call on wide cash stimulation from central banks. Historically, liquidity injection was widely described to Bitcoin, where investors seek
What if he fails? Normal for Bitcoin, “says Park ..
At the time of the press, BTC was traded at $ 98,557.
Distinctive image created with Dall.e, Chart from TradingView.com
