So far, crypto markets have not behaved as expected during the Trump administration. Investors hoped that legislative reforms and policies as a strategic reserve in Bitcoin would increase prices significantly higher. But it has been the opposite. Bitcoin has fallen from heights over $ 100,000 at the beginning of the year to a trough in mid -80,000 in most of March.
Crypto prices have suffered from becoming more and more correlated with traditional assets such as shares and bonds that have been affected by macroeconomic uncertainty. Tariffs – Appendix The US sites on imports from other countries – Wall Street has worried about a global recession. Cryptoinvestors have been away from crypto assets that are seen as relatively risky.
“This is about markets’ ‘risk appetite’ that continues to deteriorate, and so far a wedge drives between crypto assets and gold, which is still the ‘safe harbor’ choice,” said Marc Ostwald, Chief Economist & Global strategist at CEO Investor Services International.
“[That’s] In no way driven by Central Bank, for example, Reserve Managers seeking to reduce USD exposure, which has long been a source of concern for them. “
As the global economic and trading system becomes more fragmented, investors seek alternatives to more risky assets, including dollars. For now, it means turning to gold, which has increased by 18% years to date.
But that could change, said Omid Painter, an adjunct professor at Columbia Business School and author of “The History of Blockchain: A beginner guide to the technology that no one understands.” Bitcoin could be the new gold soon enough.
“I think the whole [future] is uncertain and in some ways ignorant because there are many transverse streams and both crypto and customs are new. Some people claim that Crypto is just a risk-on tech active and would sell due to customs. But Bitcoin has found a foothold in some circles such as ‘digital gold’ and the physical variety is soaring on the customs news. So which will it be? “
In other words, financial uncertainty could lead to investors seeking bitcoin, just as they have sought out gold in recent months.
Another note about positivity: Tariff’s impact on crypto could be “priced” and the worst is already over, said Zach Pandl, Grayscale’s research manager, a leading crypto -acting management company.
President Trump will announce US tariffs on Wednesday, April 2 at 1 p.m. 16 et – what is known as “Liberation Day.” According to reports, he will put “mutual tariffs” against 15 countries that have charged tariffs against the United States, including China, Canada and Mexico.
Pandl estimates that tariffs have so far taken a 2% discount on economic growth this year. But the day of liberation can actually stop the worst of the felt pain in the financial markets. “If we see a message [on Wednesday] It’s tough, but phased and focused on the 15 countries they seem to target, my expectation is that the markets will gather on this news, ”Pandl told Coindesk.
“When we first get through this message, crypto markets can focus back on the basic elements that are very positive.” Pandl said messages like Circle’s IPO would not happen if institutions did not have a high degree of confidence in the sector for digital assets and the policies around it.
In addition, Pandl, a former macroeconomist at Goldman Sachs, believes that tariffs will increase the appetite for currencies that are not dollars.
“I think tariffs will weaken the dollar’s dominant role and create room for competitors, including Bitcoin. Prices have fallen in the short term. But the first few months of the Trump administration have raised my conviction in the long term for Bitcoin as a global monetary asset.”
Pendl still believes Bitcoin will hit new all-time heights this year despite current pessimism about prices. “I wouldn’t have ended my Wall Street job if I didn’t think Bitcoin would be the winner in the long term,” he said.
