In this piece, Arthur Hayes presents his bullish argument on Bitcoin, suggesting that tariffs could potentially generate revenue to fuel the cryptocurrency's value growth.
** crypto beat **
Arthur Hayes, co-founder of BitMEX, boldly stated on Thursday that Trump's proposed tariffs are a hidden blessing for Bitcoin (BTC) investors! Why? You ask? Well, these tariffs will pressure governments and central banks to print more money in response to economic turmoil, and that means more money flowing into the crypto world!
In an informal chat, Hayes confessed his affection for tariffs, a sentiment quite contrary to the general investor disdain. He noted that the Bank of Japan will likely inject liquidity into the economy due to the potential impact of Trump's tariffs on the Japanese economy. Hayes believes this could push the USDJPY exchange rate up to a whopping 160, providing juicy trading opportunities for investors!
Intriguingly, Hayes speculates that Trump's tariff policies are deliberately aimed at addressing global trade imbalances. He foresees the Federal Reserve and the U.S. banking system increasing the money supply to keep the Treasury market stable. And hey... what's more liquid than Bitcoin? Exactly!
That's why, if Bitcoin can hold its ground at the $76,500 mark until April 15 (tax day in the U.S.), the crypto market might just dodge a few negative bullet points!
Now, let's talk numbers. On the flip side, stock markets nosedived on Thursday, losing a staggering $2 trillion after Trump's tariff announcement! The S&P 500 plummeted 4.8%, its worst one-day drop since June 2020, while the Nasdaq Composite took a 6% hit, its worst day since March 2020. Ouch!
Bitcoin too experienced selling pressure, falling approximately 6% to $81,400 post-tariff announcement, but showing a remarkable degree of resilience compared to previous market reactions to tariff signals. The flagship cryptocurrency is still (barely) standing tall above $84,000.
Michael Saylor, Strategy's Executive Chairman, further explained that Bitcoin faces selling pressure during market panics because it is seen as an easily liquidated asset. As investors scramble to raise cash, Bitcoin becomes a quick-sell target. But fear not Bitcoin-believers, this short-term correlation doesn't necessarily point to a long-term trend!
CoinGecko data shows that Bitcoin is valiantly holding its ground at around $84,500 and climbing, while altcoins like Ether and XRP start their recovery journey. The total crypto market cap stands proudly at around $2.8 trillion.
Institutional demand seems to have cooled down. On April 3, spot Bitcoin ETFs reported $99.8 million in net outflows, reversing their positive performance from Wednesday. But fret not, large investors might leap at the opportunity provided by market weakness to snap up some more Bitcoin!
In the grand scheme of things, Trump's tariffs generate market volatility, push investors towards safer assets like Bitcoin, and fuel concerns about inflation. Bitcoin's perceived value as a decentralized, inflation-resistant store of value drives its attraction in a turmoil-ridden economy. Some analysts even predict prices beyond the stratospheric $500,000 to $2.4 million if Bitcoin captures a substantial portion of the "store of value" market, driving its growth through increased adoption and investor perception shifts!
Sources:[1] https://blog.coinbase.com/bitcoins-store-of-value-status-could-drive-adoption-and-prices-higher-311c7b3c1488[2] https://www.simplifycrypto.com/resources/bitcoin/trading-strategies/15-significant-patterns-to-analyze-bitcoin-price/[3] https://cointelegraph.com/news/bitcoin-rise-risks-being-triggered-by-capitulation-according-to-the-tony-spilotro-method
- In the face of Trump's tariffs, the proposed injection of more money by central banks may benefit Bitcoin investors, as it could lead to a larger influx of funds into the cryptocurrency market.
- Despite the initial selling pressure, Bitcoin has shown remarkable resilience compared to other traditional markets during times of market turmoil, suggesting a potential long-term trend toward increased adoption and perceived value as a decentralized, inflation-resistant store of value.
- Institutional investors may view market weakness as an opportunity to increase their Bitcoin holdings, further driving up demand and potential prices.
- Some analysts predict that if Bitcoin captures a significant portion of the "store of value" market, its adoption and perceived value could continue to grow, potentially pushing prices beyond the current stratospheric predictions of $500,000 to $2.4 million.
