Bitcoin (BTC) is placed to benefit in the long term, whatever the result of President Donald Trump’s trade policies, according to the Alpha Strategies of Bitwise, Jeff Park.
That a successful agreement leads to a lower dollar or to prolonged trade conflict leads to an increase in monetary stimulus, Park argued that Trump’s economic strategy, including prices, could be a positive long -term catalyst for Bitcoin .
During the weekend, Trump introduced 25% of prices on most imports from Canada and Mexico and 10% prices on imports from China. In response, affected countries have announced reprisal measures, strengthening the US dollar by more than 1% compared to the main currencies and causing a drop in term contracts on the shares and prices of cryptography.
Bitcoin and Ethereum (ETH) has dropped by around 5% and 17%, respectively, in the middle of the wider market motivated by Macro.
Bitcoin about to get up
In cryptographic markets, low liquidity weekends and leverage trade can amplify price fluctuations. The sale triggered a wave of liquidation, with around $ 10 billion in leveraged positions endangered over 24 hours from Sunday evening to Monday morning, marking the largest liquidation event in the history of cryptography.
Park’s analysis is rooted in the Triffin dilemma, which describes the challenges faced by a country that issues the global reserve currency. The global reserve status of the US dollar creates a persistent trade deficit and an overvalued dollar while allowing the US government to borrow at lower rates due to the sustained demand for its debt.
Trump’s economic strategy seems to approach these imbalances while maintaining the advantages of the hegemony of a dollar. Analysts consider prices as a tool to bring other countries to the negotiation table, which potentially leads to a multilateral agreement to weaken the dollar without increasing long -term interest rates.
A historic precedent is the agreement of the 1985 place, where Western Germany, France, the United Kingdom and Japan agreed with a coordinated devaluation of the US dollar to support American manufacturing, drawn in part by the threat of prices.
The role of the US dollar as a global reserve currency creates a persistent trade deficit and an overvalued dollar. It also allows the United States government to borrow from lower rates due to the sustained demand for its debt.
Trump’s economic strategy
Trump’s economic strategy seems to address the negative aspects of this dilemma while retaining its advantages. Analysts consider prices as a tool to bring other countries to the negotiation table, which potentially leads to a multilateral agreement to weaken the dollar without increasing long -term interest rates.
A historic precedent is the agreement of the 1985 place, where Western Germany, France, the United Kingdom and Japan have agreed with a coordinated devaluation of the US dollar. The agreement supported the manufacture of the United States and was partly fired by the threat of prices.
If Trump has successfully negotiated a similar agreement, Bitcoin could benefit from a drop in interest rates, which tend to stimulate investment in risk assets. However, if the negotiations fail and a prolonged tariff war follows, the planned economic slowdown could lead to a large -scale monetary recovery – another historic factor that supported Bitcoin prices.
In the end, whether by a devaluation of the controlled dollar or an economic slowdown triggering a stimulus, Park sees Bitcoin as well positioned to increase in the two scenarios.
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