Could Bitcoin Serve as a Hedge Against US Tariffs?

[CharlieH]

 

If you hold a certain amount of bitcoin or whether you’re planning to buy some soon, you must be wondering what impact the US tariffs have on the coveted crypto’s price.

A market analysis by Inky Cho, Financial Markets Strategist at Exness, considers that the return of President Donald Trump to the White House arguably to mark the most schismatic moment in US politics and geopolitics.

Trump’s reappointment was followed by a deluge of draconic measures, including eerie promises of mass deportations and a series of controversial decisions emanating from Elon Musk, the head of the Department of Government Efficiency (DOGE), which has been keeping traders and investors on a string.

The pledge to impose 25% tariffs on imports from Canada and Mexico, and 20% on imported goods from China in his first 100 days in office, made Trump one of the most controversial political figures of the 21st century.

But tariffs are not the only most beautiful word in the English dictionary, according to the US President. The word cryptocurrency also carries particular significance, as he promised to enact a series of deregulation measures aimed at bolstering bitcoin and altcoins’ value.

To that end, he signed an executive order that serves as the foundation for a so-called Strategic Bitcoin Reserve and a Digital Asset Stockpile, which will include bitcoin alongside other cryptocurrencies.

The funds will be held with digital currencies forfeited to the federal government as part of legal proceedings. According to David Sacks, the White House AI and crypto czar, this reserve will be a digital Fort Knox for cryptocurrency, which he likened to the Kentucky military base that stores a significant amount of US gold assets.

Amid a wave of polarising reaction from crypto enthusiasts, some of whom criticised the government for not taking a bolder stance, while others questioned the transparency of the process.

Sacks has reportedly ordered a full account of the government’s crypto asset reserves, which he estimated at 200,000 bitcoin alone. But is that enough to turn bitcoin into a hedge? The answer to this question is more complex.

 

A tariff-led bitcoin bull run in disguise

 

The President’s relationship with the crypto space is not entirely free of any conflict of interest. The launch of his name meme-coins $TRUMP and $MELANIA just before inauguration day spited the industry, which Danny Scott, CEO of CoinCorner, retorted.

“Trump's comments about not knowing much about the coin back up my opinion that he is making a mockery of the industry. It's a stunt.”

Against this hazy background, the US tariffs cast a somewhat more positive light on the potential of bitcoin and other crypto assets. Assuming that Trump completes his tariffs mandate, immigration policies, and tax cuts, inflation could rise rapidly.

However, this type of inflation will not be a positive sign at all. For example, the cost of German motor vehicles in the US would soar, prompting Americans to open their wallets before the tariffs are enforced. This upsurge in consumer spending could temporarily drive retail sales higher, creating an artificial sense of economic growth.

The early signs of this were seen in December 2024, when the consumer price index (CPI) rose at an annual rate of 2.9%, backed by a lower core inflation. Cryptocurrencies, which unlike safe-haven gold, have a growth component that makes them inherently more sensitive to economic shifts such as inflation spikes and tariffs. And bitcoin is no exception.

Driven up by 2% as the US CPI data sent mixed inflation signals across markets, bitcoin surged US$1,500 to US$98,000 in 24 hours in December 2024.

Because of its nature, many investors and traders consider bitcoin a commodity. From this perspective, it’s worth exploring the effect of the recently implemented US tariffs on bitcoin and the broader crypto market.

 

Near-term fears and the rush for cash

 

Near-term, tariffs may hurt bitcoin’s and the crypto market’s performance, precisely because of its inherent growth-driven characteristic. This is evident in its recent price action. As fear pervades the financial markets, bitcoin hit a four-month low amid massive crypto market sell-off.

 

 

The crypto market reached a staggering US$1 billion in liquidations in the space of 24 hours (between March 10 and March 11), making many traders run for their money. Bitcoin and Ethereum, the largest cryptocurrencies by market capitalisation, have been the biggest losers of this downturn.

The main reason behind this mind-blowing price drop is the large movement of cryptocurrency by key players. Mt. Gox, the not-long-ago dominant crypto exchange, transferred tens of thousands of bitcoins as it settles debts, triggering sell-off fears.

In a chain reaction, an Ethereum whale, who’s been lying low for months, deposited a jaw-dropping amount of ETH into Kraken, adding to the jittery. Another key ETH holder sold a significant portion of its holdings at a loss, potentially to prevent forced liquidation.

Had this not been enough already, Trump’s comments of a looming recession sent shockwaves through the stock and crypto markets. Stock prices and crypto valuations took a tumble as a result, erasing the gains added after the latest US monetary policy update.

Bitcoin also tumbled to a multi-month low briefly amid fears that an impending sharp decline may be ahead, before recovering slightly. Traders must tread with caution and exercise risk management using Stop Loss as the downward trend may continue unless buying pressure returns.

This is a typical reaction to political and economic uncertainty triggered by Trump’s tariff policy. But is this all there is to bitcoin’s path ahead, or is there light at the end of the tunnel?

 

The bigger picture: Bitcoin as a US tariff hedge

 

Maintaining its correlation with the NASDAQ at a 40% rate, bitcoin is currently trading way below its 72% peak correlation point. Nevertheless, as seen during March 2023, when the banking crisis climaxed, bitcoin can uncouple and act as a safe-haven asset. This is arguably its paradox, as it can be both highly volatile and a safe haven.

In this context, bitcoin, unlike Ethereum and other altcoins, can be seen more as digital gold. This polarity across the crypto market is likely to continue, analysts suggest, with bitcoin acting more like a hedge against economic uncertainty and present-day US tariffs, while altcoins, including Ethereum, remain tied to the tech sector and implicitly, tech-heavy NASDAQ.

 

Food for thought

 

Tariffs shape economies as new trade alliances could be formed, and trade wars are likely to erupt in various parts of the world. In the short term, US tariffs could lead to higher inflation, slower growth, and volatility in bitcoin and risky assets.

In the long term, however, bitcoin’s role as a hedge against tariffs could increase, especially if tariffs trigger economic instability.

What lies ahead for bitcoin remains to be seen. Meanwhile, traders will do well to keep abreast of US policy decisions as well as global economic and political developments. This will help them make informed decisions and potentially even enjoy some of bitcoin’s potential as a hedge.

 

 

 

 

Sponsored - Original article by The Thaiger

[CallumWK]

 

[CharlieH]

With the instability due to Tarrifs etc I dont see GOLD going anywhere but UP UP UP 

[CallumWK]

4 minutes ago, CharlieH said:

With the instability due to Tarrifs etc I dont see GOLD going anywhere but UP UP UP 

 

Exactly the point of my reply, but BTC went down during the same period, so clearly no hedge

[spidermike007]

The greatest hedge against Trump could be major pushback from all nations of the world, making America incredibly irrelevant. The nation richly deserves that, the arrogance under this administration is stunning, and so is the ignorance. 

 

The second possibility is just getting rid of Trump, whatever it takes. Impeachment comes to mind. 

[Chosenfew]

21 minutes ago, spidermike007 said:

The greatest hedge against Trump could be major pushback from all nations of the world, making America incredibly irrelevant. The nation richly deserves that, the arrogance under this administration is stunning, and so is the ignorance. 

 

The second possibility is just getting rid of Trump, whatever it takes. Impeachment comes to mind. 

You need us (USA) more than we need you, FAFO!

[Sorted2024]

It's been more than a hedge play since I read the white paper 10 years ago!

DCA monthly 

[Sorted2024]

Average annualised return

Index	Last year	Last 5 years	Last 10 years
Bitcoin	43.4%	59.8%	80.1%
Gold spot price	43.9%	13.2%	9.7%

Total return

Index	Last year	Last 5 years	Last 10 years
Bitcoin	43.4%	942.5%	35,815.6%
Gold spot price	43.9%	85.6%	152.1%

[advancebooking]

Bitcoin didn't tank much at all in the last few days. It held on strong.  Its not correlated to US shares/ companies this time. Normally Ive seen bitcoin dump when the share market goes down. Its a good sign. 

 

 

[barmatt]

5 hours ago, Sorted2024 said:

Average annualised return

Index	Last year	Last 5 years	Last 10 years
Bitcoin	43.4%	59.8%	80.1%
Gold spot price	43.9%	13.2%	9.7%

Total return

Index	Last year	Last 5 years	Last 10 years
Bitcoin	43.4%	942.5%	35,815.6%
Gold spot price	43.9%	85.6%	152.1%

Yeah but gold is uselfull!

[thaipo7]

18 hours ago, spidermike007 said:

The greatest hedge against Trump could be major pushback from all nations of the world, making America incredibly irrelevant. The nation richly deserves that, the arrogance under this administration is stunning, and so is the ignorance. 

 

The second possibility is just getting rid of Trump, whatever it takes. Impeachment comes to mind. 

The biggest hedge would be for the Leftist new not to report lies and do all they can to keep the people anxious.  If this were Obama, Harris, or any Democrat President the reporting would be different.

[Yumthai]

14 hours ago, barmatt said:

Yeah but gold is uselfull!

The fact that you don't understand the utility of Bitcoin does not make it useless.

[1FinickyOne]

only if it goes up... who knows how to value bitcoin... 

[SiSePuede419]

Bitcoin?

 

For real Ponzi schemes you're going to want to invest in $TRUMP or $MELANIA cryptocurrency coins.

 

And if you still have any money left that they haven't lost for you go to barrontrump.eth to lighten up your load. 👍

 

  

[SiSePuede419]

On 4/6/2025 at 9:50 AM, Yumthai said:

The fact that you don't understand the utility of Bitcoin does not make it useless.

The fact that no one I do business with all day, the landlord, the 7-11, the massage lady, the gas station accepts Bitcoin does not make it useful.

 

Still gotta convert Bitcoin to fiat currency sooner or later.

 

p.s. WTTW, Bitcoin transactions are 100% traceable so you probably should not use it for any illegal activities, pal 😃

 

 

[hotsun]

On 3/31/2025 at 8:16 PM, CallumWK said:

 

Zoom out

[Yumthai]

43 minutes ago, SiSePuede419 said:

The fact that no one I do business with all day, the landlord, the 7-11, the massage lady, the gas station accepts Bitcoin does not make it useful.

 

Still gotta convert Bitcoin to fiat currency sooner or later.

 

p.s. WTTW, Bitcoin transactions are 100% traceable so you probably should not use it for any illegal activities, pal 😃

Wider your perspective and do your homework. Bitcoin is certainly not meant to replace Fiat currencies for daily payments, other blockchain technologies are/will be much more efficient for that use.

[SiSePuede419]

3 hours ago, Yumthai said:

Wider your perspective and do your homework. Bitcoin is certainly not meant to replace Fiat currencies for daily payments, other blockchain technologies are/will be much more efficient for that use.

I said that already. 

You added nothing new except to accuse me of being narrow-minded.

And not doing my "homework".

What a coincidence.

That's exactly what a cryptoscam artist would say.

 

Yet, I said nothing wrong or incorrect.

Bitcoin is just another Ponzi scheme with zero intrinsic value.

Just like "fiat currency".

But unlike cash which is anonymous, your every transaction is tracked with Bitcoin.

It's the Ponzi scheme of Jeniuses. 😄

[JJ-Thailand]

Could Bitcoin Serve as a Hedge Against US Tariffs?

NO!

[Colabamumbai]

57 minutes ago, JJ-Thailand said:

Could Bitcoin Serve as a Hedge Against US Tariffs?

NO!

Gold, up 750 Bhat an ounce today. Buy small 1 or 2 Bhat weight bars.. 

[Yumthai]

5 hours ago, SiSePuede419 said:

Yet, I said nothing wrong or incorrect.

Bitcoin is just another Ponzi scheme with zero intrinsic value.

You have the right to have your opinion. It reminds me all those naysayers in the 90's castigating about Internet.

[JJ-Thailand]

44 minutes ago, Colabamumbai said:

Gold, up 750 Bhat an ounce today. Buy small 1 or 2 Bhat weight bars.. 

Agree, but 5 Baht weight bars are probably a more economical choice (cost per Baht weight).

[SiSePuede419]

28 minutes ago, Yumthai said:

Bitcoin is just another Ponzi scheme with zero intrinsic value.

I'm sorry reality differs from your opinion. 👍

 

Bitcoin is a speculative asset. ✅

 

People buy it hoping it’ll go up in value. The price is heavily driven by speculation.

 

Bitcoin's “value” mostly comes from perceived utility (like a store of value or hedge against inflation), network adoption, and scarcity (only 21 million will ever exist).

 

Critics argue that’s not real value, because that's the same argument Bitcoin supporters say about fiat currency ithat itsn’t backed by much either—it's all trust.

 

So… it’s not a Ponzi scheme in the legal sense, but it does have characteristics that make skeptics wary.

 

I'm a sceptic just like Larry David.

He's rich. 🫡

 

34 minutes ago, Yumthai said:

t reminds me all those naysayers in the 90's castigating about Internet.

Strawman Logical Fallacy.

Nobody said the internet wasn't good for sending email, chatting in AOL chat rooms or downloading porn.

False.

 

Next you're going to tell us that Al Gore said he invented the internet. 

😀😃😄😁😅😂🤣😭

 

Al Gore never claimed to have "invented" the Internet. In a 1999 interview on CNN's "Late Edition" with Wolf Blitzer, Gore stated, "During my service in the United States Congress, I took the initiative in creating the Internet." 

 

Which Gore did. 

 

God, you morons are ignorant down to the lick-log. 😄

 

High Performance Computing and Communication Act of 1991 (aka the "Gore Bill")

Purpose: Funded high-speed computing and networking infrastructure, including the development of the National Information Infrastructure (NII).

Impact: Enabled the expansion of the early Internet beyond military and academic use.

Led to: Funding for the National Research and Education Network (NREN) and projects that evolved into the modern Internet.

[JJ-Thailand]

Bitcoin is bigger but not much better than Fart coin.
 

Fart coin allows you to earn tokens by submitting fart jokes or memes. Each transaction includes a "Gas Fee" that produces a digital fart sound. Fart coin has a market capitalization briefly surpassing $1 billion. This rise reflects the influence of internet culture on cryptocurrency markets. 🥱

[brfsa2]

Gold is still so useful, the second best thing you can do with your money for long term.

 

But gold involves money, and money involves being tracked almost all times. you dont go sell some gold bars to buy a car with the cash. It's sure to be reported to the authorities.

 

but in some countries you can already do that in Bitcoin. To buy a car with Bitcoin, the only down side is that in the Dealership records, they keep records connecting your identity to the Bitcoin address.

 

Bitcoin is the only asset Government cannot manipulate, print notes or track people. the reason it's hard to get general public usage and acceptance. the controlling and corrupt government no way want it.

 

Trump and Elon has a card hiding to be played later for Bitcoin, only time will tell. just wait and see.

[SiSePuede419]

10 hours ago, brfsa2 said:

Gold is still so useful, the second best thing you can do with your money for long term.

Wow, I wondered how long it would be until someone had the brilliant idea to use rocks for money.

 

Unfortunately we don't live in caves anymore.

 

And the world economy is too large to be represented by a relatively limited quantity of rocks that would only fill about 2 Olympic size swimming pools.

 

So out of touch with the modern world. 😘

[SiSePuede419]

 

 

Trump is analogous to a "Wifebeater"...

 

When a Wifebeater pauses the beating, you feel a sense of relief.

 

It's a wise idea to use the pause to placate their fragile insecure little feelings. 

 

Thank you, Mr Trump!

 

You may not be good at math, but many people say you look like Elvis and you have a real gift for repackaging the "Status Quo" as a "victory". 😄

 

 

[brfsa2]

6 hours ago, SiSePuede419 said:

Wow, I wondered how long it would be until someone had the brilliant idea to use rocks for money.

 

Unfortunately we don't live in caves anymore.

 

And the world economy is too large to be represented by a relatively limited quantity of rocks that would only fill about 2 Olympic size swimming pools.

 

So out of touch with the modern world. 😘

😘