The relationship between Bitcoin and tariffs is complex and can be affected by various factors, including economic instability, inflation, and government policies. Here’s how tariffs affect Bitcoin ¹:

Short-term Impact

- *Economic Slowdown*: Tariffs can lead to slower economic growth, reducing demand for risk assets like Bitcoin.

- *Increased Inflation*: Tariffs can cause inflation, potentially leading to speculation on rising interest rates, which may temporarily dip below the price of Bitcoin.

- *Market Volatility*: The price of Bitcoin can be volatile in the short term due to uncertainty related to tariffs.

Long-term Impact

- *Hedge Against Economic Uncertainty*: Bitcoin may act like a safe-haven asset, similar to gold, during times of economic instability caused by tariffs.

- *Potential Price Increase*: If the US dollar weakens due to tariff policies, the price of Bitcoin may rise due to its negative correlation with the US Dollar Index (DXY).

- *Potential Reserve Asset*: Some experts believe that Bitcoin could become a reserve asset, similar to gold, if the US dollar loses credibility due to tariff policies.