Bitcoin Rises Amid Trump's Trade Turmoil

Crypto Markets Weather Trump's Trade Policies, Bitcoin Poised to Rise

Bitcoin (BTC) and other cryptocurrencies have weathered the storm of President Donald Trump's trade policies, with analysts predicting a long-term positive catalyst for Bitcoin. Whether a successful agreement leads to a weaker dollar or an extended trade conflict results in increased monetary stimulus, Bitcoin's decentralized nature and potential as a store of value make it an attractive investment.

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.

However, low-liquidity weekends and leveraged trading can amplify price swings in crypto markets. 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.

Analysts see Trump's economic strategy as addressing the negative aspects of the Triffin Dilemma while retaining its benefits. 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 use of tariffs as a tool to bring other countries to the negotiating table could potentially lead to a multilateral agreement to weaken the dollar without raising long-term interest rates.

Historical precedent supports this analysis. In 1985, the Plaza Accord saw West Germany, France, the UK, and Japan agree to a coordinated devaluation of the US dollar to support American manufacturing, driven in part 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, Bitcoin appears well-position