Are Trump’s tariffs and trade threats bullish for Bitcoin?
DONALD Trump has once again stepped back from the precipice of a full-scale trade war with Canada and Mexico, delaying a sweeping 25% tariff on imports from the two nations for yet another month.
This marks the third time in two weeks that his administration has hesitated on imposing these levies, reflecting both strategic calculation and economic fragility. Meanwhile, China is firmly in Washington’s crosshairs, with a new 10% tariff set to take effect imminently, and the European Union remains a looming target.
The global economic order, already fraying, faces further disruption.
Markets did not take the initial announcements lightly. The mere threat of tariffs sent shockwaves through financial markets, triggering a selloff across equities and commodities. Risk-sensitive currencies faltered, while bond markets saw a flight to safety.
Bitcoin was not immune to the turbulence. Following the announcement of fresh tariffs, Bitcoin saw a sharp decline, mirroring broader market unease before stabilizing. However, this volatility could ultimately reinforce Bitcoin’s role as a hedge against trade-driven financial instability.
Tariffs function as an indirect tax on consumers and businesses, driving up prices and injecting inflationary pressure into the economy.
Historically, such inflationary impulses have forced central banks into defensive stances, often prolonging or intensifying restrictive monetary policy.
Markets are already pricing in heightened volatility, with equities wobbling and investors scrambling to reassess their exposure.
But while traditional assets falter, Bitcoin stands apart: an apolitical, decentralized alternative immune to the monetary distortions of government intervention.
Trump’s tariff policies are rippling across asset classes, shaking up equities, commodities, and even bonds. European, North American, and Asian markets have already suffered significant declines as traders reposition their portfolios in anticipation of escalating trade tensions.
But this same uncertainty has historically played into Bitcoin’s favour, as investors seek alternatives to fiat-backed assets vulnerable to geopolitical machinations.
Trade-fragmented world
Bitcoin’s core value proposition - decentralisation - makes it particularly attractive in times of global economic fragmentation.
Unlike fiat currencies, which are subject to the whims of central banks and government policy, Bitcoin operates independently, impervious to the inflationary distortions imposed by trade wars and fiscal recklessness.
Tariffs accelerate currency debasement, particularly when retaliatory measures force governments into additional stimulus to offset economic strain. Against this backdrop, Bitcoin’s finite supply and borderless nature become even more compelling.
Capital flight is another key factor. If tensions with China and the EU escalate, a surge in capital outflows from these regions could materialise.
In past trade confrontations, Chinese investors turned to Bitcoin as a mechanism to bypass capital controls and hedge against yuan depreciation. Given the current climate, a similar pattern is likely to emerge, adding structural demand to Bitcoin’s already robust investment thesis.
The initial knee-jerk reaction to Trump’s tariff rhetoric saw broad-based risk aversion, causing Bitcoin and other cryptocurrencies to experience sharp declines. Ether, in particular, saw its steepest drop in nearly four years before staging a partial recovery. However, seasoned investors see these dips for what they are: opportunities.
Bitcoin’s price action has consistently demonstrated resilience in the face of macroeconomic shocks.
Every major external-driven correction in its history has ultimately been followed by a rally as its fundamental value proposition - an inflation-proof, non-sovereign store of wealth - reasserts itself.
Trump’s escalating trade policies could have profound consequences across global markets. While traditional investors brace for heightened volatility and policymakers scramble to contain the fallout, Bitcoin offers an alternative playbook.
If tariffs exacerbate inflation, disrupt supply chains, and force central banks into an increasingly interventionist stance, Bitcoin stands to gain as a neutral, deflationary asset immune to government overreach.
Nigel Green, deVere Group CEO and founder
