Bitcoin Price Rallies On Latest Trump Volley, Analysts Expect Further Upside

Donald Trump is upping the pressure on China, and analysts say this is bullish for Bitcoin.

For those who missed the memo, on Friday morning, the American President unleashed his latest volley at China (and the Federal Reserve) in a series of tweets. “For many years China has been taking advantage of the United States”, Trump wrote, adding that China has cost America “HUNDREDS OF BILLIONS OF DOLLARS” each and every year.

To achieve “balance” in the trade equation, Trump went on to assert that the “remaining 300 BILLION DOLLARS” of good and products sourced from China will be taxed at a tariff rate of 15%, not the previously-imposed 10%.

At the same time, he also asserted that the Federal Reserve, whose leaders are currently convening in Jackson Hole with the world’s central bankers, should cut rates. Hard.

Related Reading: Bitcoin Price Could Test Bottom of Weekly Range, MACD Turning Bear

Of course, the market reacted. Immediately. Stocks tanked, the Chinese Yuan lost relative value against the U.S. Dollar, and safe havens surged — Bitcoin included. As pro-cryptocurrency economist Alex Krüger noted on Twitter, “today was the first time BTC reacted sharply in *real-time* to a Trade War breaking headline or USD/CNY [daily] fix.”

Bitcoin Could Continue to Surge Off Tariffs

Indeed, Bitcoin has seemingly benefited from Trump’s latest move against China. As of the time of writing this, the cryptocurrency is trading up 3% today at $10,400. Altcoins have posted similar gains.

This correlation between the publishing of Trump’s tweets and the rally in the price of both gold and Bitcoin seem to have convinced analysts yet again that Bitcoin is a safe haven play, which has been a contested narrative over recent weeks.

Analyst Luke Martin recently suggested that with the Chinese Yuan looking to become even weaker, Bitcoin “looks like it wants to catch up.” This is implying that should the Chinese Yuan continue to shed value, Bitcoin could rally, potentially to fresh year-to-date highs beyond $14,000.

Even if Bitcoin doesn’t catch up right now, these tariffs should drive demand for Bitcoin in the long run. That’s what “Hans HODL” of crypto fund Ikigai recently proposed anyway.

Related Reading: Is Bitcoin Not a Safe Haven? Crypto Crashes in Tandem With Dow

The senior quantitative analyst at Ikigai issued a six-part thread, outlining why “these Chinese tariffs” — evidently referring to Trump’s latest move — are “GOOD news for Bitcoin”. HODL, which is the analyst’s online pseudonym, suggests that to counteract the negative effect of these tariffs, China must devalue its currency.

To do this, the Chinese will likely need to inject money into the economy, which is an act of inflation as defined by Austrian economists. HODL writes that “this inflation pushes up the price of ALL assets, but especially those that are scarce, such as commodities, like Gold and Bitcoin.”

https://twitter.com/hansthered/status/1165044044365352961

That’s not all. HODL goes on to draw attention to “a projected Trillion dollar deficit” for the U.S. balance sheet, which he claims means that the “global financial system is finding itself between a rock and a hard place.” All this, he argues, will be a catalyst for the Federal Reserve and other central banks to print money, thus aiding the growth of assets, especially Bitcoin and gold.

Featured Image from Shutterstock