Michaela
Jeff Park, Head of Alpha Strategies at BitWise, has predicted that President Donald Trump’s tariffs could drive Bitcoin (BTC) prices significantly higher over time, citing the potential weakening of the U.S. dollar and lower yields on U.S. government bonds.
In a recent post on X, Park explained that the purpose of the tariffs is to strategically weaken the U.S. dollar in international trade. This move aims to address trade imbalances and enhance the competitiveness of U.S. exports.
Park also predicted that a “Plaza Accord 2.0” is on the horizon, referring to the historic 1985 agreement between the U.S., Japan, West Germany, France, and the UK aimed at devaluing the U.S. dollar.
The analyst also noted that the tariffs will likely drive higher inflation, particularly affecting U.S. trading partners. This will lead to further global currency devaluation, prompting citizens in those nations to turn to alternative assets, such as Bitcoin, as a store of value.
“The asset to own therefore is Bitcoin. In a world of weaker dollar and weaker US rates, something broken pundits will tell you is impossible (because they can’t model statecraft), risk assets in the US will fly through the roof beyond your wildest imagination, for it is likely a giant tax cut will have to accompany the higher costs borne by the loss of comparative advantage,” Park wrote.
Tariffs Impact Crypto Prices
Crypto markets experienced a sharp decline following the announcement of President Trump’s new tariffs on imports from Canada, China, and Mexico.
The tariffs, which began on February 1, include a 25% duty on goods imported from Canada and Mexico, while a 10% tariff has been placed on Chinese imports. The goal behind these tariffs, according to Trump, is to address national security concerns and combat illegal immigration and drug trafficking.
In response, both Canada and Mexico have signaled retaliatory measures, with Canada imposing a 25% tariff on roughly $155 billion of U.S. goods. China has yet to fully respond, though similar counteractions are expected.
Economists warn that these tariffs could lead to rising inflation and slower economic growth, with the possibility of increased consumer prices and higher unemployment rates in the U.S. Despite these concerns, Trump has stood firm, asserting that the tariffs are necessary to protect American interests and bolster domestic industries.
As of the time of writing, Bitcoin experienced a 3.50% decline over the past seven days. According to CoinMarketCap data, Bitcoin is currently trading at approximately $95,754, with a 24-hour trading volume increase of 175.83%, totaling $100.43 billion. The cryptocurrency has a market capitalization of $1.9 trillion and a circulating supply of 19.81 million BTC.
The strengthening U.S. dollar and increasing U.S. Treasury yields may pose challenges for the short-term price of Bitcoin and other risk-sensitive assets, as investors shift their focus from higher-risk assets to U.S. government securities.
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Michaela has no crypto positions and does not hold any crypto assets. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official media and publications of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.
