The International Monetary Fund states that tariffs hardly solve trade deficits. The effect is small and inconsistent.
At the same time, global imbalances in the current account are increasing again. This indicates more economic tensions between countries. This is important for crypto. As trade tensions rise and traditional policy measures fall short, capital often flows to alternative assets like Bitcoin.
The main findings of the IMF
In a new policy document, IMF researchers Pierre-Olivier Gourinchas and Christian Mumssen analyze the causes of global imbalances.
Their conclusion is clear: traditional macroeconomic policy measures remain the most important tool for addressing imbalances in the current account. Tariffs and industrial policy, on the other hand, yield little and are often even detrimental.
According to the IMF, tariffs only improve the current account in exceptional cases, especially if they are temporary. But most tariffs are seen as permanent or lead to retaliatory measures.
As a result, people do not adjust their saving behavior, and the current account hardly changes.
The report warns that growing imbalances "often precede financial crises or sudden reversals of capital flows."
Did you know? The IMF points out that an increase in rates does little to current account positions but lowers economic growth everywhere. Everyone loses!
Why this is important for crypto
The IMF's analysis shows that there is structural instability. This leads to some developments that are important for crypto:
Dollar pressure: The US has large budget deficits and high expenditures. A weaker financial position could put prolonged pressure on confidence in the dollar, which could strengthen alternatives like Bitcoin.
Demand for stablecoins: If global trade tensions and imbalances persist, companies may increasingly opt for stablecoins in cross-border transactions. USD-backed stablecoins provide dollar exposure without being directly reliant on the banking system.
Safe haven narrative: The IMF clearly warns of potential financial crises. Previously, such warnings led investors to seek assets unrelated to traditional markets.
Expectation
The IMF calls for "joint adjustment," with countries working together. But in practice, such cooperation proves difficult. Without this coordination, market participants will seek solutions on their own.
The IMF's warning is clear: global imbalances are increasing, tariffs do not solve it, and a disorderly adjustment can be "exceptionally costly."
For the crypto markets, this macro environment presents both risks and opportunities. The structural role of crypto as an alternative financial layer is strengthening as traditional policy measures fall short.