Bitcoin: Trade war as a turbo?

The global economy is facing turbulent times. The escalating US-led trade war is causing growing uncertainty in the markets. This is also evident in the 10-year US Treasury yield, which briefly fell to a six-month low of 4.0 percent yesterday. But what does this mean for Bitcoin?

At first glance, an increased risk of recession could appear negative. However, declining returns from fixed-income investments could lead investors to target alternative asset classes such as cryptocurrencies. Over time, traders are likely to reduce their exposure to bonds – especially if inflation rises. This means that the path to a new Bitcoin all-time high in 2025 remains quite realistic.

But there are also counterarguments: The recently announced US import tariffs could weigh on corporate profits, forcing some companies to deleverage and restricting market liquidity. Measures that increase risk aversion often have a negative impact on Bitcoin in the short term – not least because of its strong correlation with the S&P 500.

Supply Shock and Inflationary Pressure

Axel Merk, Chief Investment Officer at Merk Investments, emphasizes that tariffs trigger a “supply shock.” The reduced availability of goods and services with rising prices leads to an imbalance between supply and demand. This effect is amplified when interest rates fall, which could pave the way for inflationary pressures.

Even if one doesn’t consider Bitcoin a hedge against inflation, the appeal of fixed-income investments significantly diminishes in such a scenario. If just 5 percent of the $140 trillion global bond market seeks higher yields, up to $7 trillion could flow into equities, commodities, real estate, gold, and Bitcoin.

In the short term, uncertainty and risk aversion could depress the Bitcoin price. However, the fact that support at $82,000 held despite intensified global uncertainty is an encouraging sign of its resilience. In the medium to long term, the trade war – coupled with a weakening dollar and falling bond yields – offers a potential buying opportunity.