Author: MATT HOUGAN, Bitwise Chief Investment Officer; Jeff Park, Investment Portrait Manager, Leader 5%, many other assets have a larger decline. When I wrote this article in London (where I attended a meeting there) on Monday morning, Ethereum fell 17%, Solana fell 8%, and XRP fell 18%.

The direct reason for falling is concerns about the global trade war. Last weekend, President Trump imposed a 25% tariff on most of the imported products in Canada and Mexico, and a 10% tariffs were levied, and these three corresponding plans were announced. This caused the US dollar to rise by more than 1%against other major currencies, and the prices of stock futures and cryptocurrencies fell sharply.

Of course, because this is an encryption technology, the trouble is not only that.

In the field of cryptocurrencies, due to the widespread use of leverage, the market fluctuates (especially on weekends with low liquidity). Negative news events have led to a decline in prices, which leads to leverage traders to close their positions by selling, which leads to continuous decline in prices and forcing more people to close their positions. This process continues until the leverage is exhausted.

Sure enough, the largest clearing incident in the history of cryptocurrency from Sunday evening to Monday morning, there may be a leverage position of up to $ 10 billion in leverage.

Bitwise investors are often long -term investors, so these short -term and leverage -driven callbacks are regarded by most people as opportunities rather than threats -as long as news events are indeed short -term.

So, is this really the case? This is a matter of $ 1 trillion.

My colleague Jeff Park leads Bitwise’s Alpha team, one of the most acute minds in the cross-border field of macro and cryptocurrency. His view is that Trump's economic game plan, including the implementation of tariffs, is actually a long-term positive catalyst for Bitcoin.

Let me ask Jeff to share his point of view:

The result is: Bitcoin win, fiat currency loses. In any case, Bitcoin will go up.

To understand the long -term impact of Tariffs Bitcoin, you need to remember two things: 1) the curse of "Trifen's problem", 2) the long -term goal of President Trump.

First of all, "Trifen's problem". The problem is named after the name of the Belgian American economist, which proposed this concept in the 1960s, refers to the benefits and disadvantages of the world's reserve currency.

From a negative point of view, the US dollar is overestimated structurally because other needs to use it as a reserve currency (no matter what the price), and the United States must continue to exist in trade deficit to supply the world to the world. From the front, the United States can continue to compare with "It should be "lower cost borrowing, because there are continuous buyers to buy their debts.

Trump wants to eliminate negative factors and retain positive factors.

How to achieve This goal. A viable way is to force countries to reduce dollar reserves while extending Treasury maturity. This will curb long-term interest rates while supporting the U.S. manufacturing base.

But how do you get countries Agree with this? The dollar depreciates in an orderly manner against other currencies. This agreement greatly boosted U.S. manufacturers, as the dollar was previously strong, had struggled to compete on the global stage. (Why did these have to be signed? One reason is - you guessed it I -fear of tariffs)

If Trump can obtain this result with bullying, then there is no more favorable asset than Bitcoin. Risk preferences, push up the price of Bitcoin. In foreign countries, countries will face economic weakness and will take traditional economic stimulus measures to make up for it, so as to push the price of Bitcoin again.

What to do if he fails What if we encounter a continuous tariff war? We firmly believe that the weak economic weakness will cause the scale of money printing to exceed any time.