The introduction of new tariffs by US President Donald Trump has sparked significant discussions about their impact on the global economy and potential shifts in investors' asset preferences.
Introduction of New Tariffs
Last Saturday, US President Donald Trump issued three executive orders imposing universal tariffs on Mexico, Canada, and China based on the International Emergency Economic Powers Act (IEEPA). Diplomatic negotiations have resulted in uncertainty regarding the tariffs on Mexico and Canada, igniting debates about their economic impact.
Bitcoin's Role in Uncertainty
Some analysts argue that the recent tariffs could accelerate a global shift towards alternative assets like Bitcoin. CoinShares Research Head James Butterfill commented: "The dollar’s share of world trade is decreasing, and the dollar is losing its status as a global reserve asset over time. If you impose more regulations like the IEEPA, Bitcoin becomes a much more attractive option."
Prospects for Dollar and Bitcoin
According to Reuters, the Trump administration used IEEPA to bypass traditional trade regulations. Cryptocurrency derivatives trader Gordon Grant noted that these measures could lead to a decline in the value of the dollar and highlighted Bitcoin's potential as a self-sovereign, portable digital capital.
The introduction of trade tariffs may significantly impact the dollar's longevity as a global reserve currency and strengthen Bitcoin's position as an alternative asset amid economic instability.
