On 14/04/2025, Fed Governor Christopher Waller noted that the inflation impact from the tariff levels proposed by President Trump would only be 'temporary,' although he acknowledged that this term had been controversial during the inflation period of 2021-2022. This statement brings a positive outlook for the cryptocurrency market in the long run, especially as the Fed may cut interest rates in both tariff scenarios.


Temporary Inflation: An Opportunity for Crypto

Waller predicts two scenarios from the tariff policy of #TRUMP (a 125% tax on Chinese goods). If the taxes are high and prolonged, inflation could spike to 4%-5% in the short term, before decreasing due to slow growth and rising unemployment. In the case of lower tax rates, inflation would only rise to about 3% and then gradually cool down. In either scenario, Waller asserts that the Fed will still cut interest rates – sooner if taxes are high to support growth, or by the end of the year if taxes are low.


Positive Long-Term Outlook

In the next 3-5 years, the cryptocurrency market could greatly benefit from the following factors:



  • Interest rate cuts: The #Fed interest rate cuts will weaken the USD (USDX has fallen from 110.15 on 13/01/2025 to 99.12 on 11/04/2025, according to #FXCE ), creating favorable conditions for Bitcoin and altcoins to appreciate. The current Bitcoin price of 85,000 USD could continue its upward trend if monetary policy is loosened.

  • Increased confidence: Waller's 'temporary' assessment helps alleviate concerns about prolonged inflation, encouraging investors to seek safe-haven assets like Bitcoin, which is being strongly accumulated by major companies like Strategy (531,644 BTC).


  • Economic stability: When inflation cools after a short-term spike, the crypto market will benefit from a more stable economic environment, promoting acceptance and investment in blockchain and Web3.


Conclusion

Fed Governor Christopher Waller's assessment of 'temporary' inflation and the possibility of interest rate cuts is a positive signal for the cryptocurrency market. In the next 3-5 years, with a weakening USD and increasing confidence, Bitcoin and other digital assets could achieve significant growth, ushering in a new era for the crypto industry.


Risk Warning: Crypto investment carries high risks due to price volatility and legal uncertainty. Please consider carefully before participating.