March 2, 2018 (Windy Hill Beach, South Carolina) — The prospect of U.S. tariffs on imported steel (25% tariff) and imported aluminum (10% tariff) will surely have effects on individual businesses and markets. Will cryptocurrency markets be significantly affected? Well, cryptocurrency is so new that there’s little historic data to draw upon. One of the attractive things about most cryptocurrencies is that, unlike with the fiat currencies, the total supply of each cryptocurrency is limited. This means that the value of most cryptocurrencies cannot be inflated away by constant increase of the supply of the currency. This is a big advantage, both short-term and long-term. For the long-term, look at how much inflation has reduced the value of the U.S. Dollar over the last hundred or so years. For the short-term, look at the growing list of nations that have experienced hyperinflation.
It makes sense that, all else being equal, demand for cryptocurrency will increase as political decisions adversely affect fiat currencies. I’ll use this thread as a notepad to keep up with insights from others on the question posed in the title. You, dear readers, are welcome, wanted and encouraged to do likewise by adding comment.
I’ll start it out with excerpt from this morning’s daily technical analysis of Bitcoin prices by Sarah Jenn at newsbtc.com:
“The US dollar was in a weak spot in recent sessions as fears of a trade war were revived when Trump announced plans to impose higher tariffs on steel and aluminum. Risk aversion also returned, weighing on stocks and commodities, but bitcoin price managed to maintain its lead.
“This suggests another shift in the market dynamic as bitcoin price appears to be gaining ground on risk-off moves once more. This behavior has been seen in the past when the cryptocurrency takes advantage of geopolitical risk to provide higher returns in this type of environment.”