A VanEck analyst suggests that international trade disputes could be a game-changer for cryptocurrencies.
Tariffs and Crypto: An Unexpected Connection?
Matthew Sigel, head of digital assets research at VanEck, believes that new US tariffs, and potential retaliation from China and the EU, could significantly increase the adoption of Bitcoin (BTC). He points to recent examples of countries using Bitcoin for energy transactions, including China, Russia, and Bolivia. Even EDF, a major French energy company, is exploring using excess energy to mine Bitcoin. Sigel argues that these events show cryptocurrencies are evolving beyond speculation and becoming tools for international trade and financial maneuvering. He suggests the new tariffs might accelerate Bitcoin’s role in a shifting global economic landscape.
What to Watch: Key Indicators for Crypto Investors
Sigel advises investors to keep a close eye on several key factors:
- US Federal Reserve Policy: A more lenient approach to interest rates and increased liquidity generally benefits Bitcoin.
- US Dollar Strength: A weakening US dollar could strengthen the case for Bitcoin as a safe haven asset.
- Bitcoin ETF Inflows: Continued investment in Bitcoin exchange-traded funds (ETFs) is a positive sign.
- China and EU Response: Any retaliatory measures from China or the EU that avoid US dollar-based systems could significantly boost the strategic importance of cryptocurrencies.
Essentially, if China and the EU decide to bypass the US dollar in response to the tariffs, it could lead to increased use of cryptocurrencies as an alternative.
The Bigger Picture
Recent US tariffs have caused market volatility, impacting both crypto and stock prices. However, Sigel’s analysis suggests that the long-term implications for cryptocurrencies might be positive, particularly if global powers seek alternatives to the US dollar-dominated system. This makes keeping an eye on international trade relations crucial for anyone invested in the crypto market.
