Bits + Bips: How Trump’s Tariffs Are Bullish for Bitcoin Both Long- and Short-Term - Ep. 778
Feb 5, 2025
auto_awesome
In this conversation, Jeff Park, Head of Alpha Strategies at Bitwise Asset Management and a crypto expert, argues that Trump’s tariffs could actually benefit Bitcoin in the long run, despite mixed opinions on their economic impact. He debates how these tariffs might weaken the dollar, which in turn could increase Bitcoin's value. Jeff also shares his bold view on Trump’s true economic priorities, while the panel discusses why Ethereum suffered more than Bitcoin during recent market volatility. Expect insights on tariffs, inflation, and the evolving landscape of cryptocurrency.
Trump's tariffs could significantly impact Bitcoin's value, positioning it as a potential hedge against economic instability over time.
The emotional reactions to tariffs reveal the complex public sentiment surrounding their economic implications and potential effects on global trade.
Investor psychology highlighted extreme trading behaviors and losses during market corrections, demonstrating the dangers of leveraging volatile assets like meme coins.
Deep dives
Market Volatility and Meme Coins
The episode highlights the extreme volatility within financial markets, particularly focusing on the impact of leveraging meme coins. A notable case is mentioned where a prominent figure in the meme coin space used such coins as collateral for leveraged longs, putting into perspective the reckless trading behavior being observed. This behavior is characterized by trading assets that lack fundamental value and are profoundly volatile, demonstrating the precarious nature of relying on such collateral. The discussion emphasizes a 'easy come, easy go' mentality prevalent among traders, leading to significant losses for many participating in risky financial maneuvers.
Tariffs and Economic Implications
The conversation extensively explores the implications of tariffs recently announced by Trump, which include significant taxes on imports from Mexico, Canada, and China. There is a debate about how these tariffs may influence the U.S. economy, with one perspective suggesting they could benefit Bitcoin and the broader economy over time. The tariffs might be seen as a historical norm that could reshape trade dynamics, yet there remains considerable uncertainty surrounding their long-term impact on global trade and economic relations. The sentiment also reflects a recognition of the emotional responses to these policies in both public opinion and mainstream media reporting.
The Future of Bitcoin Amid Economic Changes
The discussion touches on how tariffs and economic shifts could uniquely position Bitcoin amid changing financial landscapes. As countries grapple with their economic policies, populations may seek alternative stores of value, with Bitcoin being a potential beneficiary of this demand. Specific attention is given to how the evolving nature of tariffs could drive interest from foreign investors, seeing Bitcoin as a hedge against economic instability. The contrasting views of whether the tariffs will stifle or invigorate the crypto market are examined, with a focus on understanding Bitcoin's role in a potentially changing financial order.
Investor Behavior and Market Reactions
Investor behavior during market corrections is scrutinized, particularly the heightened reliance on leverage that magnifies volatility in trading. The episode highlights a significant liquidations event triggered by recent tariff announcements, causing panic and drastic price fluctuations, particularly for Ethereum and other altcoins. This reaction illustrates the interconnectedness of investor psychology and market mechanics, with mentions of substantial losses incurred by traders caught in sudden downturns. The discussion also emphasizes the growing maturity of the crypto market, noting how certain decentralized platforms managed to withstand the volatility better than expected.
The Implications of U.S. Monetary Policies
Finally, the episode delves into the overarching effects of U.S. monetary policies on global finance, particularly concerning yield curves and inflation. There is speculation on how current policies might induce inflation while simultaneously impacting foreign perceptions of the U.S. dollar. Commentary on the need for sustainable growth and balance within tariffs and deficits illuminates the complexity of economic decisions made at the policy level. The implications of these economic choices are positioned as critical in shaping the future landscape for both traditional finance and the evolving crypto space.
Subscribe to our newsletter! https://unchainedcrypto.beehiiv.com/subscribe
Trump’s new wave of tariffs has reignited the debate: Are they good for the economy or a disaster waiting to happen? Some say tariffs will crush trade, boost inflation, and slow growth—but others argue they could weaken the dollar and send bitcoin soaring.
On this episode of Bits + Bips, Jeff Park of Bitwise, along with James Seyffart, Alex Kruger and Noelle Acheson, battle it out over the real impact of Trump’s tariffs, whether they could spark a new Plaza Accord 2.0, and why ETH took a harder hit than BTC in the latest selloff.
Plus, is Trump’s economic strategy really about making America great again—or just about keeping his own real estate empire afloat? Jeff makes a bold claim outlining Trump’s #1 goal—one that his personal wealth depends on.
Show highlights:
2:38 - Why Jeff believes that people’s reaction to tariffs was bizarre
7:09 - Why Jeff is convinced that tariffs are good for bitcoin
10:18 - Why Alex is so against tariffs
21:37 - How tariffs actually affect consumers
27:36 - What’s Trump’s number one priority is, according to Jeff
36:26 - Whether inflation will eventually come back to previous levels
41:05 - Why ETH got hit the hardest on Sunday night
49:56 - Whether the ETH/BTC ratio has bottomed
51:03 - How Hyperliquid’s HYPE held up so strongly
53:02 - The significance of Tether adding USDT to the Lightning Network
Hosts:
James Seyffart, Research Analyst at Bloomberg Intelligence
Noelle Acheson, Author of the “Crypto Is Macro Now” Newsletter
