Tariffs to Fuel Bitcoin Surge, Says Bitwise Strategist
2025-02-03
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Jeff Park, Head of Strategy at Bitwise, believes that tariffs will ultimately be a powerful catalyst for Bitcoin’s long-term rise.
This comes as the recent imposition of these charges by President Donald Trump has caused volatility in the crypto market.The Potential Impact of a Tariff War on Bitcoin
In a February 2 post on X, Park emphasized that this is his “highest conviction macro trade for the year.” He believes the long-term effects of tariffs should be understood through two key ideas: the Triffin dilemma and Trump’s economic plans.
The Triffin dilemma explains the problem the U.S. faces because its dollar is the world’s main currency. While this gives the nation financial advantages, it also means it must keep running trade deficits to provide dollars for global use.
To fix this, he suggests the U.S. may try to weaken the dollar in a controlled way, similar to what happened in 1985 with the Plaza Accord when major economies worked together to lower the currency’s value.
According to him, tariffs are just a short-term tool to push other countries to reduce how much U.S. dollars they hold and adjust their investments in the country’s government debt. Park believes the real goal is to weaken the dollar without directly stating it.
The analyst also thinks Trump’s team plans to lower U.S. bond yields and reduce reliance on foreign money. He expects the President to pursue this at any cost, making Bitcoin a valuable hedge against inflation and currency devaluation.
“As the world enters a sustained tariff war, the demand for Bitcoin will skyrocket,” Park stated. “Both U.S. investors and foreign market participants will flock to Bitcoin for different reasons, but the outcome remains the same—higher prices, and at an accelerated pace.”Short-Term Outlook
Despite Park’s belief that tariffs will boost Bitcoin in the long run, crypto marketstumbledafter President Trump announced new trade taxes on Canada, China, and Mexico.
Reacting to the news, Bitcoin’s price nosedived toward $90,000 over the weekend, with altcoins being hit the hardest. CoinGecko data shows that the cryptocurrency’s price has been down by 6.3% in the last seven days, with its market cap slumping to around $1.86 trillion.
The overall digital asset market has also fallen by around 11% in the last 24 hours, wiping out over $400 billion. The sell-offworsenedon Monday, pushing markets to their lowest levels this year. Coinglass datashowsmore than 700,000 traders were liquidated since yesterday, with total losses reaching $2.2 billion.
While the short-term reaction has been harsh, Park maintains that the long-term implications remain overwhelmingly positive for Bitcoin.
“You simply have not yet grasped how amazing a sustained tariff war is going to be for Bitcoin in the long run,” he concluded.