Over the weekend, Donald Trump imposed 25% duties on imports from Canada and Mexico (postponed for a month) and 10% tariffs on Chinese goods. In response, the dollar strengthened, stock and crypto markets went down:
Bitcoin fell 5%, Ethereum fell 17%
$10 billion of leveraged positions were liquidated
However, Bitwise analysts see a long-term upside for BTC.
If the tariff war leads to a weaker dollar, it will increase bitcoin’s appeal as an alternative asset.
If the trade conflict drags on, the U.S. could turn on monetary stimulus, which has historically pushed BTC up.
A historical example: the 1985 Plaza Accord, when countries agreed to lower the dollar to support US manufacturing.
The bottom line is that in any scenario, BTC is on the upside. Either a cheap dollar or monetary stimulus – both situations fuel the crypto market.
