Tariff War Fuels US Inflation

Bitcoin prices have been on a rollercoaster ride over the past month. The price of Bitcoin plummeted due to the tariff war initiated by US President Donald Trump, then surged rapidly after President Trump declared his intention to stockpile Bitcoin.

President Donald Trump's tariff war is fueling inflation within the US, thereby giving the Federal Reserve (Fed) an incentive to delay cutting interest rates. This, in turn, is decreasing preference for risk assets like Bitcoin and increasing preference for safe assets such as gold and the dollar.

As reported by Hankyung Economy TV, over the past month, Bitcoin prices have been showcasing a rollercoaster ride. The price of Bitcoin plummeted due to the tariff war initiated by President Trump, while a rapid surge was observed after President Trump declared his intention to stockpile Bitcoin.

At one point, Bitcoin crashed to the 110 million KRW range, but within just two days, it recovered to the 140 million KRW range.

According to the domestic cryptocurrency exchange Upbit on the 4th, Bitcoin fell by 20.9% last month alone. It soared to 160,304,000 KRW on the 3rd of last month, but expanded its decline to 118,266,000 KRW on the 26th of last month.

In the global market, Bitcoin was traded at $78,411.03 at one point. This was the first time Bitcoin traded in the $70,000 range since November last year, about three months ago.

After the US presidential election last November, Bitcoin rose steadily as President Trump, who introduced himself as a pro-cryptocurrency advocate, was elected. However, investor sentiment weakened as President Trump did not introduce any noteworthy cryptocurrency-related policies after his inauguration.

Furthermore, Bitcoin has been negatively affected as President Trump started tariff wars with not only China but also Canada and Mexico.

On the 28th of last month, President Trump announced that he would impose the planned 25% tariff on Canada and Mexico from the 4th of next month if the issue of synthetic drugs such as fentanyl flowing into the US is not resolved. He also announced plans to impose an additional 10% tariff on China, which already faces a 10% tariff. He also expressed his intention to impose a 25% tariff on the European Union (EU).

If the US raises tariffs on trading partners, there are concerns that it could fuel inflation within the US. This gives the Fed an incentive to delay cutting interest rates.

When interest rate cuts are delayed, preference for risk assets like Bitcoin decreases, while preference for safe assets such as gold and the dollar increases.

However, in just two days since the beginning of this month, Bitcoin has recovered to the 140 million KRW range. This occurred after President Trump hinted again at his intention to stockpile Bitcoin on the 2nd (local time) on SNS, saying, “The stockpiling of virtual assets by the United States will boost this industry, which has fallen into crisis after years of corrupt attacks by the Biden administration.”

President Trump also stated, “I make it clear that we will make America the capital of virtual assets worldwide,” and added, “We are making America great again.”

Upon this news, Bitcoin in South Korea rapidly rose from the 120 million KRW range to the 140 million KRW range. In the global market, Bitcoin also recovered to $90,000.

Previously, President Trump had signed an executive order for the development of the cryptocurrency industry right after his inauguration. The executive order included establishing a presidential working group on digital asset markets and reviewing national-level digital asset stockpiling.

Some claim, “Will reach $200,000 this year”

While skepticism about Bitcoin remains, Governor Martin Schlegel of the Swiss National Bank (SNB) expressed his views on Bitcoin in an interview with Swiss media.

Governor Schlegel stated that Bitcoin has various problems as an asset and is not suitable as a central bank reserve.

He explained, “Bitcoin shows extreme price volatility, making it difficult to maintain long-term investment value. Also, central bank reserves should be quickly utilized for monetary policy purposes when needed, but Bitcoin has limitations in terms of liquidity.”

Furthermore, he pointed out that Bitcoin being a software-based asset exposes it to security vulnerabilities.

However, some are expressing optimism that Bitcoin will rise in the medium to long term.

Jeffrey Kendrick, Head of Digital Asset Research at Standard Chartered (SC), predicted, “As the virtual asset industry becomes more institutionalized, the market will become safer, and as the adoption of virtual assets by institutions increases and regulatory clarity in the US combines, volatility will decrease over time.”

He claimed, “Bitcoin will rise to $200,000 this year and to $500,000 before President Trump leaves office.”

Robert Kiyosaki, author of the bestseller ‘Rich Dad Poor Dad’ and a Bitcoin enthusiast, posted on SNS on the 28th of last month, “Bitcoin's crash