Bitcoin price could crash to $71,000 on Trumps tariff fears, crypto insiders warn
Some argue Bitcoin is political by design, pointing to its 2009 launch following the 2008-09 financial crisis and the widespread public distrust in Wall Street at the time
It was something that “attracted followers among libertarian and anarchist groups who saw in bitcoin a means of removing the money supply from the grasping hands of government,” as The New York Times reported in 2013.
But the original white paper released by the pseudonymous creator or creators of bitcoin named Satoshi Nakamoto reads much more like an academic paper written by a mathematician than a political treatise written by an angry revolutionary.
If it was initially adopted by “libertarian and anarchist groups,” there’s no indication that was its intention based on the white paper that first introduced bitcoin.
Trump comes around to crypto; crypto investors come around to Trump
While there might be certain political underpinnings to bitcoin’s origin story, it certainly had no attachment to any major political party. In fact, it has always had detractors from all political stripes, whether conservative or liberal.
But during the 2024 U.S. election the politically agnostic nature of bitcoin changed when Donald Trump, who in 2021 called bitcoin “a scam against the dollar,” suddenly embraced cryptocurrencies.
Not only did he enter the White House as the first U.S. president with a crypto portfolio, he launched his own meme coin a few days before his inauguration, as did his wife Melania.
Not surprisingly, Trump's embrace of crypto has led many in crypto to embrace Trump.
However, as a crypto selloff begins to worsen, Nic Puckrin, a financial analyst and investor who is the founder of The Coin Bureau, views the selloff as a ramifications of bitcoin’s increasingly close correlation to politics.
“Today’s sharp selloff in crypto on renewed tariff fears shows that bitcoin, and even altcoins, are now entirely driven by politics,” Puckrin said in a note released on Tuesday. “This was never the intention for bitcoin – indeed, it was designed as an anti-political asset – but this is where we are right now.”
In his view, this unpredictable political environment makes it more difficult to predict prices than ever before. “One tweet from [Trump], and bitcoin could soar or tumble,” he wrote.
Bitcoin remains "exceptional store of value"
Bitcoin slid below $90,000 this week for the first time since November, after having passed the $100,000 milestone following Trump’s election victory.
Puckrin noted that investor concerns over Trump’s tariffs could push bitcoin down further in the short term. "If worries over tariffs continue to escalate, Bitcoin could continue falling further in the short term. A key support level to watch would then be $71,000," Puckrin added.
“But equally, we could see its price recover if we get some positive macro news, like the Mexico and Canada tariffs being canceled,” he continued. “It’s hard to see this happening, but Trump could still do a U-turn.”
Nonetheless, even if bitcoin’s price falls in the coming weeks, it will remain an “exceptional store of value that is increasingly being trusted by institutions,” according to Puckrin.
He points to the fact that both State Street and Citi are moving into custody, showing institutional bullishness on crypto remains strong. This “will inevitably drive prices higher,” Pushkin predicts.
But as the political noise coming from the White House shows no signs of quieting anytime soon, the short-term volatility for bitcoin will likely stick around for now as well.