For a moment, it looked like Bitcoin after President Donald Trump announced his tariffs (Cryptography: BTC) The market around us had lost theirs, so we were able to keep our heads up. Stock markets plummeted on April 3 and April 4 (pending for three months thereafter) as investors and businesses digested the effects of President Donald Trump’s tariffs.
Bitcoin has dropped by over 1.5%, and the S&P 500 has lost more than 10% in the last two days. It’s a rare day when cryptos are less volatile than inventory. But Bitcoin stumbled the next day.
Zoom out and see how tariffs are imposed, and it could affect Bitcoin.
The full impact of tariffs on the economy and the US dollar remains unknown. The Bitcoin Bulls claim this is their chance to shine.
A trade war could lead to higher inflation and weaker US dollars. Some experts believe this is ultimately a good thing for Bitcoin. As Zach Pandl, Grayscale’s research director, told Coindesk, “I think tariffs will weaken the dominant role of the dollar and create space for competitors, including Bitcoin.”
Some believe that Bitcoin has potential as a form of digital gold – a safe asset against inflation. Like gold, Bitcoin is not controlled by any government, and only a finite amount of Bitcoin is produced. So far, Bitcoin’s resilience has not existed. For example, Bitcoin crashed in 2022 as inflation reached a 40-year high. Cryptocurrencies behave more like tech stocks than gold, and Bitcoin is considered too volatile to act as an inflation hedge.
But we are now in unknown territory. Not only is the planned 125% collection of China’s imports unprecedented, but Bitcoin is also more established and accessible than the 2018 US-China trade war. This makes it more attractive to investors looking to diversify.
The impact of customs duties may be offset by other custody policies. The administration responsible for tariffs is also taking several code-friendly moves. These include:
Formation of strategic Bitcoin reserves and digital asset stockpile
Nominate Paul Atkins (crypto defender) to become a securities and chair the committee committee
David’s bags will be appointed to White House Artificial Intelligence (AI) and Crypto Czar
Meanwhile, the global recession will have a major negative impact on Bitcoin prices, particularly in recent years. As the recession fears, the price of crypto is under pressure.
Bitcoin tends to struggle when investors are nervous. Bitcoin once again encountered recession expectations in 2018 and 2022. Business leaders such as BlackRock’s Larry Fink and JPMorgan Chase’s Jamie Dimon have already warned of a slowdown in the economy. It is difficult to overstate the potential impact of recession, inflation and declining consumer confidence on Bitcoin prices.
The story continues