Bitcoin and cryptocurrencies remained in flux while world superpowers launched tariffs against one another in a global trade war as U.S. President Donald Trump announced wide-ranging import duties last week — hurling panic on equities and crashing already subdued risk assets.
“It’s hard to be an investor at times like this. The market is volatile, and the news flow is constant,” wrote Matt Hougan, Bitwise Chief Investment Officer, in a Tuesday note to clients. The deluge of media headlines and divergent expert analysis has further shaken investor sentiment, but the White House’s game plan also became clearer this week, Hougan remarked.
Steve Miran, chairman of the White House’s Council of Economic Advisers, published a speech on Monday focused on the dollar’s reserve currency role. Miran said this dynamic has weighed on the United States’ manufacturing workforce and “kept currency markets distorted.”
“The underlying message is clear: The dollar needs to go lower,” said Hougan. “So when it comes to the tariff push, the thing I’m most certain of is this: The Trump administration wants a significantly weaker dollar, even if it means sacrificing the dollar’s role as the world’s sole reserve currency.”
The move has vast implications for bitcoin, according to Bitwise’s CIO.
Hougan foresees bitcoin strengthening as the dollar weakens in the near term. Since 2020, BTC has gained ground whenever the U.S. Dollar Index (DXY) — which tracks the dollar’s value against a mix of six other leading fiat currencies — declined, Hougan remarked. “Dollar down equals bitcoin up. I expect this pattern will continue.”
The long-term view paints an even more bullish picture for bitcoin, Hougan said. Tariff-led rebalancing and global de-dollarization may cause economies to adopt new reserve currencies. Hougan opined that the world will increasingly look to “hard money” like BTC and gold amid a shift to a “more fractured reserve system.”
“In this context, the case for bitcoin is simple: When international dynamics are fraught and global currencies are in flux, where else can investors go for a scarce, global, digital store of value that sits outside the control of any government or entity?,” Hougan posited.
Bitcoin fell over 4% in 24 hours to trade under $77,000 as new tariffs from China staggered markets, according to The Block’s price page. Nevertheless, Bitwise predicts that one BTC will cost $200,000 by the end of 2025.
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