Bitcoin is taking a double hit from tariffs. Donald Trump’s intention to turn the United States into the world’s crypto capital has made crypto a kind of American asset. Therefore, the return of the ‘sell America’ trade quickly pulled the rug out from under the BTC bulls.
At the same time, digital assets faced an outflow of capital to the gold market. Its record highs on America’s Independence Day and its first rise above $4,700 per ounce in history in January were the result, in part, of money flowing in. Previously, investors bought Bitcoin simply because it was rising. Now the same thing is happening with gold. A significant part of its rally is speculative in nature.
On EU-US trade conflict escalation, the paths of Bitcoin and US stock indices are likely to converge again. They diverged in the fourth quarter, and one of the reasons was artificial intelligence technology. It helped stocks grow and prevented BTC from doing so. According to Jefferies, the development of quantum computing will seriously undermine the reliability of crypto wallets. The security of storing funds in them will decline, which will reduce confidence in digital assets and contribute to a collapse in their prices. The company has reduced the share of cryptocurrencies in its portfolios by 10%.
