Bitwise: US Tariffs and a Weak Dollar to Bolster Bitcoin

The devaluation of the US dollar could strengthen Bitcoin’s position as an asset, according to Matt Hougan, CIO of Bitwise.

The Trump administration’s policy aimed at weakening the American currency will be a key factor in these changes.

Hougan noted that the global economy’s reliance on the dollar has already led to imbalances in international markets. In his speech, White House Council of Economic Advisers Chairman Steve Miran emphasized that the existing model contributes to trade deficits and a shrinking manufacturing sector.

This thesis reflects the US government’s intention to pursue a weaker dollar, even if it harms its status as the primary reserve currency, Hougan highlighted.

According to the Bitwise CIO, this has both short-term and long-term implications for Bitcoin. In the short term, the inverse correlation between the dollar index and the leading cryptocurrency plays a crucial role. Over the past five years, this figure has ranged from -0.4 to -0.8.

In the long term, dollar devaluation could alter the global financial system, increasing the role of alternative reserve assets such as Bitcoin and gold.

Hougan believes that a shift towards a more fragmented reserve currency system is inevitable. In such a scenario, digital gold, with its stable supply, independence from governments, and global nature, becomes an attractive tool for investors.

Earlier, Bitwise predicted that Bitcoin’s price could reach $200,000 by the end of the year. Hougan confirmed that this scenario remains possible.

Back on March 25, the Bitwise CIO stated that Trump’s decision to create a strategic crypto reserve eliminated the “last existential risk” for the leading cryptocurrency.