Analysts discuss the potential impact of President Donald Trump's trade tariffs on Bitcoin prices in the long term.
Jeff Park's Analysis
Jeff Park, head of alpha strategies at BitWise financial services, believes that tariffs aim to weaken the US dollar in global markets, potentially driving Bitcoin prices 'violently higher' in the long term. Park draws parallels with the 1985 Plaza Accord agreement that involved coordinated efforts to devalue the dollar.
Impact on Crypto Markets
Despite a potentially positive long-term outlook for Bitcoin, crypto markets reacted negatively to Trump's recent tariffs on Canada, China, and Mexico. Bitcoin's price declined by roughly 7.2% over the past seven days. Altcoins like Ether, Solana, and XRP also saw significant price drops.
US Dollar's Short-Term Strength
The US Dollar Currency Index (DXY), indicating the dollar's strength against other fiat currencies, has been rising since October 2024. This could pose short-term challenges for Bitcoin and other risk-on assets as investors may pivot to safer US government securities.
Amid rising trade tariffs and economic uncertainties, Bitcoin may serve as a vital alternative asset in the long term, though short-term fluctuations remain possible.
