Donald Trump's election for POTUS has been positive for the crypto market as a whole. Many regulatory hurdles will be cleared. Gary Gensler is out. More crypto ETF approvals are in the horizon and the regulatory landscape is looking much brighter as a whole.
But the trade wars Trump seems keen on starting are already having a negative impact on the US economy and the world economy. Inflation is certainly going to pick up because tariffs are essentially a tax on imported products paid by the importer who must pass the cost onto its customers. Tariffs don't benefit US manufacturers in a straightforward manner. Many inputs are sourced from abroad, Mexico and Canada in particular, and may be hard to replace with domestic alternatives any time soon.
With rising inflation there will be pressure to raise interest rates as well and we all know what that means in terms of risk-on assets such as Bitcoin and other crypto assets in particular. As the other major currencies weaken primarily owing to reduced exports to the US and secondarily dollars flowing back in the the US owing to higher interest rates in the US, the dollar will strengthen and that's bad news for Bitcoin and crypto.
At a minimum, plenty of uncertainty will be introduced by the aggressive trade policies of Donald Trump. I believe the next bear market will be triggered by the knock-on effects of the aggressive tariffs.
What do you think?