American President Donald Trump’s tariffs could send Bitcoin ‘violently higher’ in the coming years as the US dollar weakens in global currency markets, argues Bitwise crypto researcher Jeff Park.
Plaza Accord 2.0?
On Saturday, the analyst said the tariffs are intended to attain the end goal of making the dollar weak in international trade in an attempt to rectify trade imbalances while making US exports attractive. He compared the current state to the 1985 Plaza Accord when the US, the UK, France, West Germany, and Japan entered into an agreement to weaken the American dollar.
Park also said Trump’s tariffs could lead to heightened inflation, which will negatively affect US trading partners, thus resulting in further global currency debasement that will force citizens of those nations to look for other store-of-value assets, such as BTC.
Trump Trade War Causes Bitcoin to Plummet
Despite a positive long-term outlook for Bitcoin’s price, as Jeff Park claims, cryptocurrencies have seen their value drop significantly over the past 24 hours in reaction to Trump’s announcement regarding tariffs on Mexico, China, and Canada.
The US President announced that a 25% tax will be charged on imports from Canada and Mexico, while those from China will attract a 10% tax. This move has caused Bitcoin to shed 6% of its value, dropping to $93,945 as of this writing. Furthermore, data from CoinGecko shows that the largest crypto asset by market cap has lost 7.1% in the past seven days.
Crypto Markets Today
Top altcoins that have posted huge losses include Ethereum, which is down 20.5% to $2,497; XRP, which has fallen to $2.29 following a 24-hour loss of 22%. Meanwhile, Dogecoin is changing hands for $0.239 after dropping 26.1%, as Cardano and Avalanche trade at $0.67 and $23.17, following losses of 25.4% and 30.98%, respectively.
Analysts say many investors are moving away from high-risk assets like crypto due to short-term macroeconomic uncertainty caused by Trump’s tariffs. That isn’t far from the truth, considering the US Dollar Currency Index has risen in the past 24 hours, signaling an increased demand for USD as investors shift their focus from risky assets.
