Trade war fears over President Trump’s proposal to implement tariffs on steel and aluminum sent many into panic mode last week, but crypto players looked for how Bitcoin could benefit.
President Trump’s call for tariffs on steel and aluminum imports set off a frenzy of comments about such a move triggering a trade war, but one winner from any such implementation could be Bitcoin.
Doomsday scenarios were outlined ad nauseam, equity investors and traders panicked and caused markets around the world to sell off, but Bitcoin experienced a rally of sorts. As the debate raged over the president’s proposal, some observers discussed how cryptos could benefit.
Tariffs on the way?
The president on Thursday called for a 25% tariff and 10% tariff to be put on imports of steel and aluminum, respectively. That immediately sparked fears from a barrage of pundits who said that such tariffs could trigger a trade war.
Supporters of such tariffs say it’s about time, and agreed with the president’s comments that the tariffs could build up the country’s steel and aluminum industries.
“In this environment, I want to own those things that are deflationary and fixed supply in an inflationary environment. And look at what Bitcoin has done the last couple of days.”
During trade wars, currencies tend to weaken. This was the case with the dollar, which depreciated in value last week, Kelly noted. In past trade wars, investors would hedge with gold, however, now Bitcoin could be an option.
“But you know what, now we have Bitcoin. [It] has a fixed supply. It acts exactly like a hard asset, exactly like a commodity. Generally speaking, you want to own hard assets.”
Bitcoin/stock market correlation still being debated
Over the past few months, many have tried to correlate Bitcoin’s price movements with the ups and downs of the stock market. However, this week, Bitcoin showed how it refuses to go along with traditional finance thinking.
While the Dow sold off almost 1,000 points by Friday before recovering, Bitcoin’s price moved higher with few dips. It’s up by 6.4% for the week, noted CNBC.
In fact, the volatile asset continues to regain some of its February losses. It peaked around $19,500 in mid-December, only to fall below $6,000 last month. Prices hovered just over $11,000 Friday. – CNBC