Former U.S. President Donald Trump’s economic policies, especially his use of tariffs, have had significant global implications. While tariffs were primarily aimed at reducing trade imbalances and protecting American industries—especially against China—their ripple effects have also touched the world of cryptocurrency in indirect but meaningful ways.
What Were Trump’s Tariffs?
During his presidency (2017–2021), Donald Trump imposed a series of tariffs on goods imported from countries like China, Mexico, and members of the European Union. These tariffs, especially those targeting Chinese technology and manufacturing sectors, led to increased tensions and uncertainty in global trade markets.
The Crypto Connection
1. Market Uncertainty and Bitcoin as a Hedge: Tariffs introduced volatility into traditional markets. In times of uncertainty, investors often look for alternative assets. Bitcoin and other cryptocurrencies began to be viewed not just as speculative investments but also as potential hedges against geopolitical risk and inflation—similar to gold.
2. Capital Flight and Crypto Usage in China: China, being the main target of Trump's tariffs, saw increased capital flight. With strict controls on moving money overseas, some Chinese investors turned to cryptocurrencies like Bitcoin and Tether to bypass these restrictions.
3. Technology and Blockchain Innovation: The trade war also focused on technological supremacy. Blockchain and crypto were seen as areas of innovation that could help reduce reliance on centralized financial systems. Some U.S. and Asian companies ramped up investments in decentralized technologies partly as a strategic hedge.
4. Trump’s Own Stance on Crypto: Interestingly, while Trump championed policies that indirectly fueled interest in crypto, he himself has been critical of Bitcoin and other cryptocurrencies. In 2019, he tweeted: “I am not a fan of Bitcoin and other Cryptocurrencies... Unregulated Crypto Assets can facilitate unlawful behavior.” Yet, despite this, some figures associated with Trump’s circle—including campaign supporters and advisors—have shown strong interest in crypto investments.
Future Outlook
As Trump campaigns for the 2024 presidential election (and remains a central figure in U.S. politics), his policies could again influence the crypto sector. If protectionist measures or trade tensions return, cryptocurrency may again see increased interest as a hedge or alternative asset class.