Escalating trade war tensions have triggered widespread market volatility, prompting growing concerns among investors. Yet, one analyst suggests that these very uncertainties could act as a catalyst for Bitcoin’s (BTC) value growth.
The outlook emerges as Bitcoin struggles to gain momentum, with both traditional and cryptocurrency markets showing signs of widespread losses.
Could a Trade War Be Bitcoin’s Big Break? Five Key Factors Driving Value Growth
In a detailed analysis posted on the social media platform X (formerly Twitter), Ben Sigman, analyst, and CEO of Bitcoin Libre, outlined five distinct factors through which a tariff-driven conflict could trigger a rise in Bitcoin’s value.
His first point revolved around the US dollar’s potential trajectory. According to him, a trade war would strengthen the dollar. Yet, a subsequent collapse would reverse this.
“Tariffs spike the dollar. EMs crack under $12 Trillion in USD debt. Trust in fiat slips. Capital scrambles for fixed-supply safety,” he said.
Sigman suggested that in this case, capital may seek refuge in assets with a fixed supply, such as Bitcoin, positioning it as a safeguard against financial instability.
Next, he pointed to Bitcoin’s potential as a hedge against inflation. Tariffs often disrupt global supply chains, increasing the cost of goods and stifling economic growth. In response, central banks, including the Federal Reserve, may reduce interest rates, thereby devaluing national currencies.
Sigman argued that Bitcoin’s inherent scarcity and global accessibility render it a compelling hedge in such a scenario.
Third, Sigman highlighted the accelerating trend of de-dollarization. He explained that nations such as China, which now conducts 56% of its trade invoicing in yuan, are increasingly seeking alternatives to the US dollar.
According to him, the BRICS (Brazil, Russia, India, China, and South Africa) coalition will also develop alternative financial systems. However, this shift is not without risks, as it could lead to capital flight.
“Bitcoin thrives in a fragmented world as the neutral, global option,” he claimed.
Fourth, Sigman predicted market panic. He estimates that a single tariff cycle could erase $5 trillion in market value, flatten bond yields, and render traditional safe-haven assets, such as gold, less attractive.
In such an environment, Bitcoin’s volatility may attract investors seeking high-risk, high-reward opportunities, potentially driving substantial capital inflows.
Finally, Sigman contended that a trade war could expose systemic vulnerabilities in global institutions. Tariffs may precipitate debt defaults and erode trust in fiat-based systems, prompting investors to turn to Bitcoin.
“Bitcoin was built for this – permissionless, borderless, bankless,” he concluded.
Nevertheless, not all analysts share Sigman’s optimism. Another prominent commentator, Fred Krueger, recently outlined nine predictions regarding the potential imposition of tariffs exceeding 100% on China within the next year. He forecasted that this measure could lead to significant declines in Bitcoin and other cryptocurrencies like Solana (SOL).
“All goes down together. at some point this ends. When? Trump is unfortunately insane and badly advised,” Krueger wrote.
When asked whether Bitcoin will go to zero, he quipped, stating,
“I will take it all at $1.”
As trade tensions between the US and China intensify—driven by further tariffs on Chinese goods and broader geopolitical frictions—the role of Bitcoin in the global financial sector remains intensely scrutinized. How the largest cryptocurrency performs in the long term remains to be seen.
For now, the market appears quite bearish. BeInCrypto data showed that over the past day, BTC dipped 3.1%. At the time of writing, it was trading at $76,914.
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