The trade strategies of US President Donald Trump are projected to generate global macroeconomic disruptions and temporary financial emergencies that will facilitate a broader acceptance of Bitcoin (BTC) as a valuable asset, as per Bitwise analyst Jeff Park.
Disruptions caused by the trade conflict are anticipated to push governments toward inflationary fiscal and monetary strategies, which will further devalue currencies and prompt a global search for secure alternatives, such as Bitcoin, Park suggested.
This surge in interest for BTC will likely elevate prices significantly over the long haul, the analyst surmised. In a post on X dated Feb. 2, Park forecasted the short-term effects of a trade confrontation:
“The costs associated with tariffs, primarily through heightened inflation, will be distributed across both the US and its trading partners, but the relative consequences will weigh more heavily on foreign nations. These countries will subsequently need to discover a way to address their sluggish growth challenges.”
While the escalating interest in Bitcoin as a secure asset in response to swiftly diminishing fiat currencies pushes BTC prices upward in the long run, global financial markets will suffer the immediate impacts and the wealth erosion caused by the trade conflict, according to Park.
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Global markets facing short-term impacts
Economist and hedge fund manager Ray Dalio noted in an X post on April 2 that tariffs are “stagflationary for the world at large.” He elaborated that tariffs typically generate more deflationary effects for the producers of the taxed goods while being inflationary for the nations importing them.
Dalio concluded that the existing levels of debt and trade disparities are bound to trigger a global financial transformation that alters the prevailing monetary framework.
“Should these trade tariffs escalate into a significant trade war, the repercussions will be quite severe for the entire globe,” Coin Bureau founder and market analyst Nic Puckrin stated in an interview with Cointelegraph.
The analyst expressed concerns that the US economy faces a 40% probability of entering a recession in 2025 amid apprehensions of an extended trade conflict and the macroeconomic instability fostered by protectionist trade measures.
No pain, no gain: Will short-term shocks propel long-term asset price increases?
Asset manager Anthony Pompliano recently theorized that the US president might intentionally destabilize capital markets to encourage interest rate reductions and lessen the burden of servicing the national debt.
The rate on 10-year US Treasury securities decreased from approximately 4.66% in January to the current rate of 4.00%.
Pompliano also articulated that although the present administration’s strategies are causing short-term challenges, the resulting decrease in interest rates will bolster borrowing and elevate risk-oriented asset prices in the longer term.
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