The tariff wars between the US and China continue. The relief rally in Bitcoin (BTC) and the cryptocurrency market turned bearish again yesterday with Donald Trump’s plan to impose punitive tariffs on China.
Bitcoin briefly rose to $80,000, but then began to decline, falling to $74,000 after Trump announced that he would impose 104% additional tariffs on Chinese goods.
News of the tariffs put additional pressure on the Chinese yuan, with the offshore yuan (CNH) losing ground sharply against the US dollar on the day, falling to a multi-year low of 7.4.
BitMEX co-founder Arthur Hayes, who predicted that Bitcoin could reach $250,000 despite the tariff reductions, evaluated the latest developments.
Speaking to Unchained, Hayes said a weakening yuan could prompt Chinese investors to look for ways to hedge against inflation, with Bitcoin being the obvious choice.
Hayes referred to 2013 and 2015, when fears of a devaluation for the yuan revived interest in Bitcoin, saying, “Without the Fed, China will give us the catalyzing excuse for Bitcoin that we want. It worked in 2013, 2015, and it could work in 2025.”
Still hopeful for a rise in Bitcoin, Hayes says BTC could reach $250,000 in the coming months
At this point, Hayes said central banks will have no choice but to cut interest rates because global liquidity is on the verge of significant growth.
The famous name said that if the world's major economies continue to expand their money supply, the financial market will be flooded with fiat liquidity. In this context, Bitcoin, an inflation-resistant asset, is preparing for a new rally.
Hayes said that if the expected developments happen, Bitcoin is likely to first surpass $110,000 and then has the potential to reach $250,000.
Hayes said he is optimistic about Ethereum (ETH) as much as he is about Bitcoin. The famous name noted that Ethereum, which is currently seen as a less popular asset by many, will also perform well during market recoveries. Hayes said that while Ethereum is currently lackluster and showing weakness, ETH’s role in the overall crypto ecosystem is too important to ignore and the price will recover.
On the other hand, Arthur Hayes, who did not speak positively about Solana (SOL), said that although Solana had a great performance in the rally after Trump's victory, there are uncertainties for SOL and it could pressure the price.
*This is not investment advice.
