Bitcoin and Altcoins Threatened by US Aggressive Attitude: Is This the End of the Bull?

After the major drop in Bitcoin and altcoins, crypto analysts issued critical warnings.

After the customs duty announcement made by US President Donald Trump over the weekend, the 24/7 open cryptocurrency market gave the first reaction. With the increase in risk perception, cryptocurrency prices fell significantly, while analysts evaluated the effects of the developments.

In response to Trump's plan to impose a 25% tariff on products imported from Canada and Mexico and a 10% tariff on Canadian energy products and Chinese goods, Bitcoin fell more than 10% to $91,500.

Not just for Bitcoin, but a global threat

Research and brokerage firm Bernstein's analysts used the phrase, "If customs duties mean a stronger dollar, high inflation, and a decrease in expectations of short-term interest rate cuts, this means a decrease in global liquidity for these risky assets" in the note they sent to their clients on Monday.

Analysts stated that due to governments carrying higher debt and deficit in the long term, the loss of monetary value will increase, in this case, bitcoin will maintain its relative value compared to the dollar.

However, noting the correlation of Bitcoin with risky assets in the short term, he emphasized that the sales in the crypto market are not surprising.

Emphasized that long-term customs duties could harm the US economy, weaken the dollar, and push the Fed into a tough stance.

Goal of Increasing Local Production

Some names in the crypto industry believe that another potential motivation behind Trump's tariff move is to increase local production.

Aave's founder Stani Kulechov said, 'Customs duties will create resources for the US and increase local production.' Kulechov stated that 'Customs wars will also create resources for other countries and increase their local production. This forces every country to compete in local production.'

Yakovenko, "The US is $2 trillion in deficit. The government needs to cut $1 trillion in spending and raise $1 trillion in taxes. Customs duties are a consumption tax that supports local producers. Probably the least harmful way to close the deficit." said.