A major global trade conflict might hurt economies across the board—but Bitcoin could emerge stronger because of it, according to Bitwise analyst Jeff Park.
Park believes that former U.S. President Donald Trump’s trade strategies, if revived, could ignite macroeconomic chaos and trigger short-lived financial crises worldwide. This instability, he suggests, could drive more people and institutions toward Bitcoin (BTC) as a reliable store of value.
As governments respond to economic strain with loose monetary policies—like printing more money and cutting interest rates—currencies may lose their purchasing power. In turn, investors may look to hedge against inflation and currency devaluation, pushing Bitcoin demand, and price, higher over time.
In a post on X (formerly Twitter) from February 2, Park explained that the cost of tariffs would likely raise inflation in both the U.S. and its trade partners. However, he emphasized that the burden will hit foreign nations harder, forcing them to grapple with sluggish economic growth and financial instability.
While Bitcoin may shine as a safe haven, the immediate outlook for traditional markets is less optimistic. Park noted that the road to broader Bitcoin adoption will likely be paved with short-term losses and market turbulence.
Stagflation Warnings and Systemic Risks
Echoing Park’s concerns, hedge fund titan and economist Ray Dalio warned in an April 2 X post that tariffs are globally “stagflationary”—causing economic stagnation alongside rising prices. According to Dalio, countries already grappling with debt and trade imbalances could see their financial systems undergo a major realignment.
“If a full-blown trade war unfolds, the consequences could be devastating worldwide,” said Nic Puckrin, founder of Coin Bureau, during a recent interview. He estimates there’s a 40% likelihood that the U.S. slips into a recession in 2025 due to ongoing trade tensions and protectionist policy moves.
Short-Term Pain, Long-Term Gains?
Asset manager Anthony Pompliano offered a different perspective. He speculated that current U.S. leadership may be intentionally allowing markets to correct in order to justify rate cuts—ultimately reducing the government’s debt servicing costs.
Supporting that idea, the yield on 10-year U.S. Treasury bonds has fallen from 4.66% in January to around 4.00% now. Pompliano believes that lower interest rates will eventually spur borrowing and investment, driving prices of risk-on assets like Bitcoin higher in the longer term—despite the near-term volatility.
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