A Bitwise executive predicts that President Trump’s tariffs could significantly boost Bitcoin’s price. Jeff Park, head of alpha strategies at the firm, believes the tariffs are a strategic move by Trump to achieve two key objectives: weaken the US dollar and lower US Treasury yields.
Trump’s Economic Strategy and its Impact
Park argues that the Trump administration will do “whatever it takes” to lower Treasury yields. This allows the government to borrow money more cheaply, reducing the tax burden on citizens through lower interest payments. He suggests Trump is using tariffs to pressure foreign nations into reducing their dollar reserves, thus weakening the dollar. Simultaneously, he’s pushing them to hold more long-term US Treasuries. If successful, this increased demand for US Treasuries will raise bond prices and lower yields. Park calls this a “holy grail of fiat alchemy”—a weaker dollar and lower yields.
Bitcoin as a Safe Haven
In this scenario, Park forecasts a dramatic rise in Bitcoin’s price. He argues that with a weaker dollar and lower US interest rates, risk assets in the US will surge. He believes this is likely to be accompanied by a significant tax cut to offset the higher costs resulting from the loss of comparative advantage due to tariffs. While both the US and its trading partners will bear the cost of tariffs (likely through inflation), the impact will be heavier on foreign nations.
These countries, facing economic challenges, may respond with monetary and fiscal policies that debase their currencies. This could lead to mini-financial crises, causing citizens to seek alternative assets. Park points out that unlike the 1970s, the world is now “on-chain,” making Bitcoin a readily accessible alternative. He concludes that both sides of the trade equation will likely turn to Bitcoin, driving its price significantly higher. “We are at war,” he states, emphasizing the potential for rapid and substantial price increases.
Bitcoin’s Current Price and Disclaimer
At the time of writing, Bitcoin was trading at $101,125. It’s important to remember that this is just one expert’s opinion, and investing in cryptocurrency is inherently risky. Always conduct your own research before making any investment decisions.