Bitcoin’s Tariff Tango: Why Traders Are Blaming the Wrong Dance Partner 🕺💸

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Ah, Bitcoin. The digital gold, the savior of the disillusioned, the… well, let’s not get carried away. Despite a modest 2.2% uptick on April 1, BTC has yet to breach the hallowed $89,000 mark since March 7. While the global trade war, led by the ever-controversial US, is often blamed for this malaise, the truth is far more nuanced—and far less dramatic. 🤷‍♂️

Some market pundits, with the confidence of a fortune teller at a carnival, claim that Strategy’s $5.25 billion Bitcoin buying spree since February is the sole reason BTC hasn’t plummeted below $80,000. But let’s be real: Bitcoin’s lackluster performance predates President Trump’s January 21 announcement of 10% tariffs on Chinese imports. It’s almost as if Bitcoin has a mind of its own—or, more likely, no mind at all. 🤔

On February 19, the S&P 500 hit an all-time high, a full 30 days after the trade war began. Meanwhile, Bitcoin, the supposed “future of money,” couldn’t even hold above $100,000 for three months straight. Sure, the trade war rattled investor nerves, but Bitcoin’s woes started long before Trump took office on January 20. Maybe it’s time to stop blaming the tariffs and start blaming… well, Bitcoin itself. 😬

Spot Bitcoin ETFs, Strategic Reserves, and Inflation: A Comedy of Errors

Here’s another nail in the tariff narrative coffin: spot Bitcoin ETFs saw $2.75 billion in net inflows in the three weeks following January 21. By February 18, the US had slapped tariffs on Canada and Mexico, while the EU and China retaliated. Yet, institutional demand for Bitcoin remained steadfast. It’s almost as if the trade war was just background noise to Bitcoin’s existential crisis. 🎭

Part of the disappointment stems from Trump’s 2024 campaign promise of a “strategic national Bitcoin stockpile.” Investors, ever the optimists, clung to this idea like a life raft. But when the actual executive order dropped on March 6, it was met with a collective shrug. Turns out, promises are easier to make than to keep. Who knew? 🤡

Inflation, that ever-present specter, also plays a role. In February, the US PCE Price Index rose 2.5% year-over-year, while the eurozone CPI increased by 2.2% in March. Global central banks, it seems, have managed to keep inflation relatively in check—much to Bitcoin’s chagrin. After all, what’s a hedge without a crisis? 🌍💸

Risk Aversion: The Job Market’s Unwelcome Gift to Bitcoin

In 2022, Bitcoin thrived as inflation soared above 5%, with businesses and families flocking to crypto as a hedge against monetary debasement. But if inflation remains tame in 2025, lower interest rates will likely favor real estate and stocks over Bitcoin. Reduced financing costs? Great for mortgages, not so great for memecoins. 🏠📉

The job market isn’t helping either. In February, US job openings hit a four-year low, and yields on the 2-year Treasury fell to a six-month low. Investors, it seems, are opting for the safety of government-backed instruments over the wild ride of Bitcoin. Risk aversion? More like risk exhaustion. 😴

In the end, Bitcoin’s struggles stem from a trifecta of unrealistic expectations, declining inflation, and a risk-averse macroeconomic environment. The trade war may have added fuel to the fire, but the fire was already burning. So, dear Bitcoin traders, perhaps it’s time to stop blaming the tariffs and start looking in the mirror. 🪞

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of CryptoMoon.

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2025-04-02 02:33