Despite sideways market reactions, Bitwise CIO Matt Hougan has suggested that the tariff drama would have short and long-term bullish implications for Bitcoin.
Positive developments emerged from the tariff war front yesterday, sparking a market rebound. Notably, President Donald Trump announced a 90-day pause on reciprocal levy hikes, sending bullish waves through the US stock market and the crypto sector.
Before now, the tariff war severely impacted Bitcoin’s price. The asset dropped to $74,000 earlier this week, sparking a broader market slump. While the border importation tax tussle has sparked skepticism among crypto market investors, Bitwise CIO Matt Hougan believes it has near and long-term bullish implications for the pioneering cryptocurrency.
Silver Lining for Bitcoin?
Hougan highlighted an important statement from Steve Miran, the chairman of the White House Council of Economic Advisors, in a letter to investors on Tuesday. The president’s economic advisor noted that the dollar’s role as a global reserve currency has led to distortion and unsustainable trade deficits.
Miran noted that despite the reduced borrowing rate, the dollar’s trade currency monopoly has stunted America’s manufacturing sector amid other economic implications. Meanwhile, Hougan stressed that the speech passed a clear message: Trump intends to lower the dollar’s dominance, even at the detriment of its status as the global reserve currency.
The Bitwise CIO noted that this move to weaken the dollar would have notable implications for Bitcoin, the largest cryptocurrency by market cap. In the short term, he stated that the premier asset’s -0.4 to -0.8 correlation with the US Dollar Index (DXY) would ensure that Bitcoin rises as the dollar falls.
Bitcoin to Assume Global Reserve Role
Remarkably, Hougan noted that the dollar’s decline as a global reserve currency would pave the way for a market shift to a more fractured reserve system. He highlighted that this would mean a demand for hard money for international trade settlement, a role that Bitcoin and gold will effectively fit into.
As a result, the Bitwise executive predicts an elevated position for Bitcoin as the new global reserve asset in the long term.
Interestingly, Hougan is not the only one who sees Bitcoin upsetting the dollar to become a global reserve asset; BlackRock’s CEO, Larry Fink, thinks so too. In an annual stakeholder’s letter, he noted that Bitcoin poses serious threats to the dollar’s dominance and sees the digital asset taking preeminence in the near future.
Meanwhile, the Bitwise CIO previously reiterated that Bitcoin remains on track to hit $200,000 before the end of the year.
DisClamier: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
