It seems difficult to believe, but the price of Bitcoin (BTC 1.05%, On January 1, 2023, it was just $ 16,625. Fast forward for today, and bitcoin costs around $ 85,000.
In a period of over two years, the price of bitcoin has increased by more than 400%. And this is even after 22% decline from the high level of all time of $ 109,000 earlier this year.
The real test for bitcoin, however, now comes. Will the tariff uncertainty sink bitcoin? Or will Bitcoin get a way to continue the invincible climbing climbing?
Can tariffs be really rapid for bitcoin?
On the surface, suggesting it may seem absurd that tariffs can possibly be faster for bitcoin – especially not when some tariffs against China may be more than 245%. From the point of view of global trade, they are extinct level tariffs. Therefore it is difficult to believe that even bitcoin – a cryptocurrency that has completed a lot of financial storms in the past – can be rich.
But here is the case: The tariffs have deteriorated after the initial shock of “Liberation Day”, the story around bitcoin has started changing. You saw?
First, the legend was that if large technical stocks are falling, bitcoin should also fall. But Bitcoin has barely provoked the liberation day tariff was announced. On April 2, the price of bitcoin was $ 85,000. And today, the price of bitcoin is around $ 85,000.
Some investors feel that bitcoin may be a safe-heaven property for investors taking shelter from global economic storm. From this point of view, bitcoin can be “digital gold” and a potential “value store”. If everything around you is crashing, perhaps the bitcoin line will catch the line? If this investment thesis begins to resonate with the thesis investors, it is easy to imagine a new influx of investor’s money in bitcoin through the new spot bitcoin ETF.
Tariff and strategic bitcoin reserve
And there is another new wrinkle for all this. In mid -April, Bow Hines, Executive Director of the Advisory Council of the Principal Council on digital assets suggested that new tariff revenue could be used to buy bitcoins for strategic bitcoin reserve. This is important, because when the White House originally announced this bitcoin reserve in March, it was clearly stated that any future purchase of bitcoin needs to be “budget-plate”.
So now the question is, “Does the new tariff be counted as the revenue budget-plate?” From the government’s point of view, all this new tariff revenue is like a “windfall profit”, which can be spent on purchasing bitcoins. On the other hand, taxpayers can see tariffs as an inappropriate new tax on them to buy more bitcoins for the government. So it can be very controversial.
The original vision for the strategic bitcoin reserve was to buy 200,000 BTC per year in a total of five years. At the end of the period that time, the US will have a circulation of 1 million BTC, or about 5% bitcoin. This was the goal of the upcoming Trump administration: to make America a bitcoin superpower.
Therefore, if tariff revenue is declared a “budget-plate”, we are talking about the possible large scale new programs of bitcoin purchase. Obviously, this continuous purchase of Crypto by the US government will be very fast for bitcoin. And it can encourage other business partners to take the same approach.
Is bitcoin “tariff-resistant” or “tariff-proof”?
Just keep in mind: There is a big difference between bitcoin “tariff-resistant” and “tariff-proof”. To understand this point, try this small experiment: Go into a fierce storm wearing a “water-resistant” jacket, and tell me how it goes. When you realize that there is a world of difference between being “water-resistant” and “waterproof”.
Image Source: Getty Image.
Similarly, there is a major difference between digital currency “tariff-resistant” or “tariff-proof”. If the upcoming tariff storm is quite heavy and long, you will see the difference soon.
All of which say: Be careful about having a lot of faith in bitcoin. Yes, it has been held significantly well since the liberation day. And, yes, 410% returns have been unprecedented in the last two years. However, at the end of the day, no property-bitcon is also likely to be-proof-proof.
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