The crypto market has suffered heavy losses following US President Trump’s announcement of impending tariffs on China, Canada and Mexico.
The Trump Trade War
Canada and Mexico have already announced retaliation with a set of their own tariffs on US products, while China is still considering its options. Trump also said the European Union won’t be spared, although the United Kingdom probably will, as the president says he gets along well with UK leadership adding that Prime Minister Keir Starmer is “doing a good job”.
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Meanwhile, EU leaders have already warned the bloc will retaliate against any US tariffs. All this hasn’t been to kind on the stock and crypto markets, sending the asset class further tumbling.
Bitcoin (BTC) at some point dropped below the $92K mark, while Ethereum (ETH) and Co, booked double-digit losses shortly after Trump announced the trade tariffs.
However, while investors flee to safe-haven assets and snub crypto, at least for now, one analyst says that might change soon.
‘You Have No Idea Yet What Bitcoin Can Do’
Jeff Park, the head of alpha strategies at financial services firm BitWise, argued that new tariffs were being used to weaken the US dollar in international trade, comparing it to the 1985 Plaza Accord.
In a scenario where the U.S. dollar weakens and tariffs lead to higher inflation and economic uncertainty, Park sees Bitcoin as a significant beneficiary. He argues that as traditional fiat currencies face challenges amid these economic shifts, Bitcoin will rise in value “higher, violently faster”, given its role as an alternative asset.
This increase in value will be driven both by its appeal as a hedge against inflation and economic instability and by its technological advantage in a digitally connected world.
“TLDR: You simply have not yet grasped how amazing a sustained tariff war is going to be for Bitcoin in the long run.”
It remains to be seen if Park has got this right; for ChatGPT at least, it is a viable theory. A user on X ran Park’s assessment by the LLM and that gave it a score of 8.5 out of 10.
The conclusion: Park’s argument is “one of the strongest macro cases for Bitcoin in a world of trade wars”.
Source: X