Bitcoin expected to rise as trade war fuels economic shifts

The ongoing global trade tensions, driven by U.S. President Donald Trump’s tariff policies, are predicted to create significant economic turmoil, ultimately benefiting Bitcoin (CRYPTO:BTC) as a store of value, according to analysts.

Jeff Park, Head of Alpha Strategies at Bitwise, argues that the tariffs will weaken the U.S. dollar in international trade, leading to inflationary pressures and currency debasement.

This scenario is expected to drive both U.S. and global investors toward Bitcoin as an alternative asset.

Park highlighted that the tariffs, which include a 25% levy on imports from Canada and Mexico and a 10% tax on Chinese goods, are part of a broader strategy to correct trade imbalances and reduce reliance on foreign capital.

He likened the current situation to a potential "Plaza Accord 2.0," referencing the 1985 agreement aimed at weakening the U.S. dollar.

The immediate impact of these tariffs has been stagflationary, with higher costs for importing nations and deflationary effects on producers of levied goods.

Economist Ray Dalio noted that these policies could disrupt global markets and lead to a shift in the established monetary order.

Despite short-term market shocks, including a recent sell-off that wiped out over $400 billion from the cryptocurrency market, analysts remain optimistic about Bitcoin’s long-term trajectory.

“As the world enters a sustained tariff war, the demand for Bitcoin will skyrocket,” Park stated.

He added that while short-term pain is inevitable, the weakening of fiat currencies will push more investors toward Bitcoin as a hedge against inflation and economic instability.

Bitcoin's price has shown resilience amid these challenges, maintaining its appeal as a store of value despite fluctuations in other risk assets.

Analysts believe that prolonged trade wars and macroeconomic uncertainty will accelerate Bitcoin adoption globally.

At the time of reporting, the Bitcoin (BTC) price was $77,682.66.