🇺🇸 Tariffs and Crypto: Who pays the bill for the trade war?
The picture is clear: data indicates that 96% of the cost of tariffs falls on American consumers and businesses, not on foreign exporters. But why does this matter to us, cryptocurrency traders?
🧠 The Economic Foundation
There is often the idea that tariffs are a "tax on the other country." In practice, they function like an import tax:
Passed Cost: The importer pays more and passes this cost on to the end consumer.
Inflationary Pressure: If the cost of products rises, inflation tends to rise or remain "sticky."
Interest Rates and the Fed: High inflation prevents the Federal Reserve from aggressively cutting interest rates.
📉 The Impact on the Crypto Market
As we know, Bitcoin and Altcoins are risk assets (risk-on).
Strong Dollar vs. Bitcoin: If tariffs generate inflation and keep interest rates high, the dollar (DXY) tends to strengthen, which historically puts selling pressure on Bitcoin.
Liquidity: Tariffs act like a drain on retail liquidity. Less money "left over" in the average American's pocket means less inflow into exchanges.
Protection Narrative: On the other hand, if tariff policy causes a devaluation of the currency due to excessive debt, the thesis of Bitcoin as "digital gold" and a store of value gains even more strength.
💡 Conclusion for the Trader
Don't just trade the chart; trade the scenario. Economic protectionism generates volatility. If American inflation does not fall due to these costs, the "bull run" that everyone expects may face macroeconomic obstacles before taking off.
Keep an eye on the DXY and CPI data (Inflation)! 🛡️🚀
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