Financial analysts project US President Donald Trump’s tariff strategies might increase the use of crypto when economic uncertainty expands globally.
In the opinion of Bitwise analyst Jeff Park, trade tensions will compel governments into inflationary measures that debase conventional currencies and prompt investors to seek alternative means of assets.
Market Analysts Forecast Long-Term Crypto Gains From Economic Disruption
The trade war’s immediate effects will create worldwide economic pressure, with costs distributed unevenly between the US and its trading partners.
“The tariff costs, most likely through higher inflation, will be shared by both the US and trading partners, but the relative impact will be much heavier on foreigners,” Park wrote in a February 2 post on X. He added that affected countries will struggle to address resulting growth problems.
This is the only thing you need to read about tariffs to understand Bitcoin for 2025. This is undoubtedly my highest conviction macro trade for the year: Plaza Accord 2.0 is coming.
Bookmark this and revisit as the financial war unravels sending Bitcoin violently higher. pic.twitter.com/WxMB36Yv8o
— Jeff Park (@dgt10011) February 2, 2025
While Bitcoin may benefit eventually, Park warns that global markets will experience significant distress first. The rising value of crypto would come amid broader economic pain and wealth reduction caused by escalating trade conflicts.
Economic Experts Highlight ‘Stagflationary’ Effect Of New Tariffs
Ray Dalio, noted economist and hedge fund manager, described tariffs as “stagflationary for the world as a whole” in an April 2 social media post. He explained that tariffs typically create deflationary pressure for countries producing the taxed goods while causing inflation in countries that import those products.
The current level of global debt combined with trade imbalances will lead to a major shift in the financial system, according to Dalio. This shift could reshape the established monetary order that has dominated global economics for decades.
— Ray Dalio (@RayDalio) April 2, 2025
Interest Rate Drops May Signal Deliberate Market Strategy
Some financial observers suggest the economic turbulence might be strategic. Asset manager Anthony Pompliano recently proposed that the president could be intentionally destabilizing capital markets to force interest rate reductions, which would lower the cost of managing the US national debt.
The interest rate on 10-year US Treasury bonds has already fallen from about 4.60% in January to 4.00% currently. According to Pompliano, while this approach causes short-term market pain, lower interest rates will eventually encourage borrowing and push asset prices higher.
This strategy, if accurate, would align with the predictions that Bitcoin and other risk assets might benefit in the long run, despite the immediate economic challenges created by aggressive trade policies.
Featured image from Gemini Imagen, chart from TradingView
