Tariff pump theory gains steam again as BTC rallies over 10K
It’s been a bad week for the global economy. After a month-long trade ‘truce’ between the US and China, US president Donald Trump once again escalated the conflict by promising yet another wave of tariffs aimed at Chinese goods.
Trump tweeted on Thursday that “The U.S. will start, on September 1st, putting a small additional Tariff of 10% on the remaining 300 Billion Dollars of goods and products coming from China into our Country. This does not include the 250 Billion Dollars already Tariffed at 25%”
Unsurprisingly, the global financial plummeted in the immediate aftermath of Trump’s tariff tweets: Dow Jones is down by -2.60% over the last 5 days, while the S&P 500 lost -3.10% over the same time frame. The FTSE 100 was down over 2% yesterday as the wave of selling pressure continued to ripple around the world.
And while the legacy markets are in shambles, the crypto bulls have been in full swing, with almost every coin in the top 15 recording a green candle over the past 24 hours. The peculiar timing, however, left many in the cryptoverse wondering - are US tariffs sparking the crypto rally?
The proponents of the tariff pump will tell you there’s historical precedent to support the theory: in the week after the first wave of US tariffs (25% on $200 billion worth of Chinese goods) went into effect, Bitcoin gained almost 40%.
And while the latest run could be considered relatively modest, the king coin did hit a 2-week high $10,946 yesterday before consolidating, and is still up a cool 2.96% for the day.
Given the timing, a lot of people are happy to chalk the uptrend to the escalating US-China trade war, as seen on r/bitcoin’s mega thread about Trump’s tariff tweets:
As expected, the news also spurred a neverending back-and-forth about the merits of tariffs and their professed potency as a negotiation tool. Shockingly, I have to report that this matter was in fact NOT finally put to rest once and for all on the outskirts of an r/bitcoin comment thread:
That said, it’s not just a few reddit randos that have been pushing this tariff pump narrative - the theory has been gaining steam in major crypto publications over the last couple of days:
Even Binance dipped their toes in theorycrafting, tweeting about a strong performance of traditional ‘safe-haven assets’ following the new tariffs announcement:
Of course, there’s still no solid evidence that BTC rally and the tariff tweets are indeed connected, and correlation does not imply causation. However, judging by the community’s response, the correlation is becoming pretty difficult to ignore.