Bitcoin (BTC) is positioned to benefit in the long term regardless of the outcome of President Donald Trump’s trade policies, according to Bitwise head of alpha strategies Jeff Park.
Whether a successful agreement leads to a weaker dollar or an extended trade conflict results in increased monetary stimulus, Park argued that Trump’s economic strategy, including tariffs, could be a long-term positive catalyst for Bitcoin.
Over the weekend, Trump introduced 25% tariffs on most imports from Canada and Mexico and 10% tariffs on imports from China. In response, the affected countries announced retaliatory measures, strengthening the US dollar by more than 1% against major currencies and causing declines in equity futures and crypto prices.
Bitcoin and Ethereum (ETH) dropped approximately 5% and 17%, respectively, amid the wider macro-driven market rout.
Bitcoin poised to rise
In crypto markets, low-liquidity weekends and leveraged trading can amplify price swings. The selloff triggered a wave of liquidations, with an estimated $10 billion in leveraged positions wiped out over 24 hours from Sunday night into Monday morning, marking the largest liquidation event in crypto history.
Park’s analysis is rooted in the Triffin Dilemma, which describes the challenges faced by a country that issues the world’s reserve currency. The US dollar’s global reserve status creates a persistent trade deficit and an overvalued dollar while also enabling the U.S. government to borrow at lower rates due to sustained demand for its debt.
Trump’s economic strategy appears to address these imbalances while maintaining the advantages of dollar hegemony. Analysts see tariffs as a tool to bring other countries to the negotiating table, potentially leading to a multilateral agreement to weaken the dollar without raising long-term interest rates.
A historical precedent is the 1985 Plaza Accord, where West Germany, France, the UK, and Japan agreed to a coordinated devaluation of the US dollar to support American manufacturing, driven in part by the threat of tariffs.
The US dollar’s role as a global reserve currency creates a persistent trade deficit and an overvalued dollar. It also allows the US government to borrow at lower rates due to sustained demand for its debt.
Trump’s economic strategy
Trump’s economic strategy appears to address the negative aspects of this dilemma while retaining its benefits. Analysts see tariffs as a tool to bring other countries to the negotiating table, potentially leading to a multilateral agreement to weaken the dollar without increasing long-term interest rates.
One historical precedent is the 1985 Plaza Accord, where West Germany, France, the UK, and Japan agreed to a coordinated devaluation of the US dollar. The agreement supported US manufacturing and was partly driven by the threat of tariffs.
If Trump successfully negotiates a similar agreement, Bitcoin could benefit from lower interest rates, which tend to drive risk asset investments. However, if negotiations fail and a prolonged tariff war ensues, the expected economic slowdown could lead to large-scale monetary stimulus—another historical factor that has supported Bitcoin prices.
Ultimately, whether through a controlled dollar devaluation or an economic downturn triggering stimulus, Park sees Bitcoin as well-positioned to rise in either scenario.
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