Donald Trump's aggressive trade policies towards China could provide a significant boost to Bitcoin, according to market analysts.
With plans for higher tariffs on imports from China and increasing economic pressure on the world's second-largest economy, Bitcoin is set to benefit.
The Chinese yuan has been under significant pressure, falling to a 16-month low earlier this week, with analysts predicting further devaluations in the coming months, creating a perfect storm for Bitcoin’s growth.
David Brickell, head of international distribution at FRNT Financial, draws parallels with the yuan devaluation in 2015, when bitcoin prices tripled in a short period of time. “The depreciation of the yuan will accelerate capital flight out of China,” Brickell said. “Bitcoin will be an obvious target for some of these flows, particularly with capital controls in place making it difficult to move funds out of China through traditional channels.”
Other analysts are equally optimistic about Bitcoin’s future during Trump’s presidency, with research firms Bernstein and Standard Chartered predicting that Bitcoin could reach $200,000 by the end of 2025, while 10x Research predicts the cryptocurrency could rise to $120,000 by Trump’s inauguration on Jan. 20.
The optimism stems from Trump’s campaign promises and key appointments. He made several pro-crypto promises during his campaign and nominated crypto-friendly figures to influential positions, including Paul Atkins as head of the Securities and Exchange Commission and David Sacks as chief artificial intelligence and crypto officer.
Trump’s proposed tariffs compound China’s economic woes, including stagnant growth and a continuing housing downturn. In September, Beijing announced a $284 billion stimulus package, the biggest since the pandemic, to combat those challenges.
But efforts to reassure international investors this week have done little to halt the yuan’s slide as Chinese regulators scramble to stabilize the currency, as reported by the Financial Times.
*This is not investment advice.
