Tariff Tussle: Will Bitcoin Become the New Gold?

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“Tariff Tussle: Will Bitcoin Become the New Gold?”

Tariff Tussle: Will Bitcoin Become the New Gold?

My dear friends, the world of cryptocurrency has been in a bit of a pickle under the Trump Administration, hasn’t it? While investors were convinced that regulatory reforms and the Bitcoin Strategic Reserve would send prices soaring, instead, Bitcoin has been stuck in the mid-$80,000s for most of March, a far cry from its lofty heights of over $100,000 at the start of the year 🤑

Now, with the markets bracing themselves for President Trump’s reciprocal tariffs, it’s anyone’s guess how BTC will react in the long run. The man himself is set to unveil a major announcement on April 2 at 4 p.m. ET, dubbed “Liberation Day,” which promises to shake things up, darling! He’s expected to unleash reciprocal tariffs targeting 15 countries, including China, Canada, and Mexico, all of which have already imposed tariffs on the U.S. 🤯

Tariff War Shakes Up the Market

The ongoing tariff war is sending shockwaves through the stock market, with the S&P 500 dropping over 2% in the past five days. And, of course, Bitcoin’s price often follows the market, so it could face more ups and downs, sweetie. The trade war is likely to cause more short-term price swings, making it a rollercoaster ride for investors 🎠

Crypto prices have taken a hit as they’ve become more tied to traditional assets like stocks and bonds, which are struggling due to economic uncertainty. U.S. tariffs on imports have left Wall Street worried about a global recession, making investors wary of risky assets like crypto 🤕

Marc Ostwald, Chief Economist at ADM Investor Services International, explained that markets are losing their ‘risk appetite,’ which is pushing crypto further from safe-haven assets like gold, which remains the go-to choice in uncertain times 🏰

As the global financial and trade system grows more fragmented, investors are looking for safer alternatives to riskier assets like the U.S. dollar. Right now, gold is the go-to choice, up 18% so far this year 💃

Bitcoin To Take Over Gold?

However, this could change, says Omid Malekan, adjunct professor at Columbia Business School. He believes that Bitcoin might soon take over as the ‘new gold,’ darling! 🤑

He noted that the future is uncertain as both crypto and tariffs are new and complex. Some believe crypto is a risky tech asset that would drop due to tariffs. But Bitcoin is also seen as “digital gold,” and gold prices are rising with tariff news. He believes that when the economy is uncertain, investors might turn to Bitcoin just like they’ve turned to gold recently 💰

Tariffs Could Boost Bitcoin

In another positive note, Zach Pandl, head of research at Grayscale, notes that the impact of tariffs on crypto could be “priced in” and the worst might be over already. Besides, he believes that the Liberation Day could ease financial market struggles and if the tariffs are tough but phased, targeting 15 countries, markets will likely rally 🎉

He also pointed out that events like Circle’s IPO wouldn’t be happening if institutions weren’t confident in the crypto space and its regulations. Pandl believes that tariffs will reduce the demand for the U.S. dollar and open the door for other currencies like Bitcoin. He still believes that Bitcoin will reach new all-time highs this year, despite the current negative sentiment around its prices 🚀

Bounce-back For Bitcoin?

Sid Powell, CEO & co-founder of Maple, is saying that traders are hopeful that Trump’s upcoming tariff announcement on April 2 will be less harsh than expected. Powell noted that after weeks of falling prices, any relief could trigger FOMO and a quick bounce-back for Bitcoin 📈

However, he also warns that if the tariffs cause the U.S. dollar to strengthen or slow down the global economy, risky assets like crypto could suffer even more. So, investors are waiting to see what happens before making big decisions. Besides, if the inflation rises, the Federal Reserve might lower interest rates, which could boost Bitcoin adoption and lead to a price increase over time 💸

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2025-04-02 10:43