Key Takeaways

The International Monetary Fund (IMF) has issued a stark warning : global trade is no longer the engine of economic growth it once was.

The International Monetary Fund (IMF) has issued a stark warning: global trade is no longer the engine of economic growth it once was, according to Managing Director Kristalina Georgieva.

Speaking at an IMF event in Tokyo, Georgieva highlighted the shifting U.S. policies—on trade, taxation, public spending, deregulation, and digital assets—as key forces reshaping the global financial landscape.

Her remarks come as markets struggle to adjust to President Donald Trump’s wave of tariff hikes, which have triggered retaliatory measures from China, Canada, Mexico, and the European Union.

The escalating trade tensions have already rattled stock markets, and now, the crypto industry finds itself increasingly vulnerable to the broader turmoil.

In times of economic uncertainty, investors typically flock to safe-haven assets. Historically, gold has been the preferred hedge against financial instability, but Bitcoin (BTC) has often been touted as a digital alternative.

However, recent market reactions suggest that Bitcoin’s safe-haven status remains in question. The crypto market has not been immune to the effects of the ongoing trade war.

Since Trump’s latest tariff escalation, Bitcoin has tumbled nearly 25% from its all-time high in January, with billions of dollars in leveraged positions liquidated over five consecutive days.

Despite Trump’s pro-crypto rhetoric and campaign promises, cryptocurrencies have struggled under the weight of economic instability. Meanwhile, gold has once again asserted itself as the asset of choice for investors seeking stability, reinforcing doubts about Bitcoin’s ability to function as a crisis hedge.

Bitcoin Needs More Than Hype to Weather Economic Shocks

While Trump’s administration has taken a more favorable stance on crypto compared to its predecessors, regulatory clarity and institutional confidence are crucial for Bitcoin to break free from the volatility tied to broader market stress.

Analysts point to upcoming policy decisions, such as the potential development of a national crypto reserve and the approval of new crypto investment products, as key factors that could drive long-term liquidity into the market.

Bitcoin has shown resilience in past crises, particularly during the COVID-19 pandemic. In the early months of the crisis, gold outperformed Bitcoin, but by the later stages, Bitcoin had outpaced the precious metal by a significant margin.

Whether history will repeat itself remains to be seen. For now, as the IMF warns of a world where trade is no longer a reliable growth driver, Bitcoin’s ability to withstand economic turbulence will be put to the test.