- Bitwise’s Head of Alpha Strategies, Jeffrey Park, has outlined his view that regardless of the outcome of Trump’s tariff threats Bitcoin is going to be a major beneficiary.
- Park’s bullish outlook is based on his belief that Trump’s tariff threats are intended to devalue the US dollar, balance trade deficits and lower 10-year treasury rates.
- He said the strategy’s success would increase investor appetites for risk-on assets like Bitcoin, and if it fails, it’ll result in large-scale money printing which is usually good for Bitcoin.
Head of Alpha Strategies at Bitwise, Jeffrey Park, has said that Trump’s tariff-triggered trade turmoil will almost certainly be very good for Bitcoin in the long term.
Writing on the Bitwise blog yesterday, Park opined that Trump’s economic strategy has created a scenario where “heads Bitcoin wins, tails fiat loses”, adding that “either way, we go higher”.
Park believes Trump’s tariff strategy is all about bringing America’s major trading partners to the negotiating table with the ultimate aim of reducing the value of the US dollar — perhaps by getting countries to sell off some of their US dollar reserves — without increasing long term interest rates.
Trump wants to get rid of the negatives, but keep the positive. How does he plan to achieve this? Tariffs.
Jeffrey Park, Head of Alpha Strategies at BitwiseIf this strategy works, claims Park, the lowered interest rates would likely increase investor appetites for higher-risk assets, like Bitcoin. This is the ‘Bitcoin wins’ scenario.
If Trump’s strategy backfires — the ‘fiat loses scenario’ — Park argues that would lead to money printing on a scale never before seen in the US. And historically, large-scale money printing has seen Bitcoin’s price increase.
Related: $1.2 Billion in Crypto Liquidations as Canada, Mexico Threaten Retaliation for Trump Tariffs
Trump Is Seeking “Holy Grail of Fiat Alchemy”, Says Park
Park outlines two main points which underlie his argument that Trump’s tariff strategy is good for Bitcoin no matter how it plays out — the first is ‘The Triffin Dilemma’ and the second is Trump’s long term goals.
‘The Triffin Dilemma’ refers to a dilemma first described by the Belgian-American economist, Robert Triffin. It says that the US dollar being the global reserve asset provides significant positives and negatives for the US economy — the main positive being the US can borrow at lower rates because there’s always a ready supply of buyers for its debt.
On the negative side, the US dollar is structurally over-valued because nations need to hold it in reserve and the US tends to run permanent trade deficits in order to ensure the world has enough US dollars in reserve.
So what are Trump’s long term goals? Well according to Park, his number one priority is to lower the US 10-year treasury rate. Why? Because, according to Park, this will be very good for Trump’s personal real estate portfolio. At least he seems to understand how Trump thinks.
Never doubt the uncomplicated incentives of the transparently profit-motivated, and align yourself next to him. Mark my words: the 10y is going to go down, whatever it takes.
Jeffrey Park, Head of Alpha Strategies at BitwiseEffectively, through his threats of tariffs, Trump is seeking to devalue the US dollar and get rid of US trade deficits, while at the same time driving down the 10-year treasury rate even further. As Park tweeted “the US is charting a path to achieve the holy grail of fiat alchemy: lower dollar and lower yield.”
Park: Sustained Tariff War “Amazing” For Bitcoin
Something like this has been tried before. In 1985 the US threatened tariffs against many of its major trading partners, including West Germany, France, the UK, and Japan in order to get them to cooperate in a scheme known as ‘The Plaza Accord’ to intentionally devalue the US dollar in order to prop up US manufacturing.
If Trump is able to achieve something like a ‘Plaza Accord 2.0’ Park said Bitcoin would be very well positioned, explaining:
If Trump can bully his way into the position, there’s no asset better positioned than bitcoin. Lower rates will spark the risk appetite of U.S. investors, sending prices high. Abroad, countries will face weakened economies, and will turn to classic economic stimulus to compensate, leading again to higher bitcoin prices.
Jeffrey Park, Head of Alpha Strategies at BitwiseAnd if he fails? Bitcoin will still be in a great position according to Park:
What if, instead, we get a sustained tariff war? Our high-conviction view is the resulting economic weakness will lead to money printing on a scale larger than we’ve ever seen. And historically, such stimulus has been extraordinarily good for bitcoin.
Jeffrey Park, Head of Alpha Strategies at BitwiseRelated: Bitcoin Pulls Past $100K as US Hits Pause Button on Tariff Scuffle
On X / Twitter, Park summarised his view making some extremely bullish noises:
So while both sides of the trade imbalance equation will want Bitcoin for two different reasons, the end result is the same: higher, violently faster—for we are at war.
TLDR: You simply have not yet grasped how amazing a sustained tariff war is going to be for Bitcoin in the long run.
Jeffrey Park, Head of Alpha Strategies at BitwiseCredit: Source link
