Trump's trade war expected to drive Bitcoin prices higher
In a recent analysis, Jeff Park, head of alpha strategies at Bitwise, expressed a strong belief that President Donald Trump's trade tariffs will ultimately drive Bitcoin (CRYPTO:BTC) prices significantly higher.
Park stated that the tariffs are intended to weaken the US dollar in global markets, which could lead to increased inflation and a shift towards alternative assets like Bitcoin.
He referred to this potential scenario as "Plaza Accord 2.0," drawing parallels to a historical agreement aimed at devaluing the dollar.
As tariffs are imposed on imports from Canada, Mexico, and China, Park argues that these actions will create economic pressures that could debase currencies worldwide.
This situation may lead citizens of affected countries to seek out Bitcoin as a store of value amidst currency instability.
Despite Park's long-term bullish outlook for Bitcoin, the immediate market reaction has been negative.
Following Trump's announcement of tariffs, Bitcoin's price fell approximately 7.2% over the past week, dipping below $100,000 for the first time since late January.
Altcoins experienced even steeper declines, with significant drops recorded across major cryptocurrencies like Ether (CRYPTO:ETH) and XRP (CRYPTO:XRP).
Market analysts are currently monitoring Bitcoin's support level around $90,000, noting that a significant drop below this point could trigger further declines.
The US Dollar Currency Index has shown strength in the short term, which typically correlates with risk-off sentiment among investors.
Park's insights highlight the complex dynamics between trade policies and cryptocurrency markets.
"This is undoubtedly my highest conviction macro trade for the year," he remarked on social media, emphasising his confidence in Bitcoin's potential amidst the unfolding trade war.
At the time of reporting, the Bitcoin (BTC) price was $93,281.13.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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