Despite the recent market turmoil triggered by President Trump’s tariffs, a new memo from Bitwise Asset Management suggests that these economic headwinds could ultimately propel Bitcoin to new heights. The report outlines two distinct scenarios where Bitcoin emerges as a clear winner, regardless of the outcome of the ongoing trade disputes.
The Bitwise analysis hinges on the concept of the ‘Triffin Dilemma’, which highlights the inherent conflict between a currency’s role as a global reserve and the need for the issuing nation to run persistent trade deficits. With President Trump aiming to restructure America’s trade dynamics, the stage could be set for a significant shift in the global economic landscape.
In the first scenario, if Trump succeeds in weakening the dollar while keeping interest rates low, it could spark a surge in risk appetite among US investors. This environment would likely drive capital flows towards alternative assets like Bitcoin, which offers a non-sovereign, decentralized store of value. Simultaneously, other nations grappling with the fallout of a weaker dollar might resort to fiscal and monetary stimulus, further fueling demand for Bitcoin.
Alternatively, if the trade war persists and leads to a prolonged period of global economic weakness, central banks would almost certainly respond with extensive monetary stimulus. Historically, such liquidity injections have been bullish for Bitcoin, as investors seek out deflationary assets that are insulated from the policies of central banks.
As the trade war narrative continues to unfold, Bitcoin’s unique properties as a borderless, censorship-resistant asset could make it an increasingly attractive option for investors seeking to navigate the turbulent global economic landscape. While short-term volatility may persist, the longer-term implications of the current trade tensions could ultimately serve to solidify Bitcoin’s role as a safe haven asset and a viable alternative to traditional fiat currencies.
Tags: Bitcoin, Trade War, Trump, Tariffs, Global Economy, Safe Haven
Source: https://www.newsbtc.com/news/bitcoin/why-bitcoin-wins-outcome-trump-trade-war/