Mounting international trade tensions are rattling cryptocurrency markets — but they could also accelerate institutional crypto adoption, several industry executives told Cointelegraph.
Since US President Donald Trump announced sweeping tariffs on US imports on April 2, core cryptocurrencies experienced double-digit price swings, worsening an ongoing market rout starting earlier this year.
However, “[t]he silver lining is that economic uncertainty has historically accelerated institutional interest in digital assets as a diversification strategy,” David Siemer, co-founder and CEO of Wave Digital Assets, told Cointelegraph.
Bitcoin has already shown “signs of resilience” amid the market turbulence, underscoring the cryptocurrency’s potential as a hedge against geopolitical disruption, according to an April 7 Binance report.
Now, “[a]s traditional banking channels become entangled in geopolitical tensions, we’re witnessing increased demand for blockchain-based settlement solutions that operate outside conventional correspondent banking networks,” Siemer said.
Bitcoin and the S&P 500’s recent performance. Source: 21Shares
Related: US President Donald Trump issues 90-day pause on reciprocal tariffs
Tariff turmoil
On April 9, Trump paused implementation of a portion of the sweeping tariffs he announced last week on US imports while simultaneously vowing to hike levies on Chinese goods to 125%.
The S&P 500 — an index of the largest US stocks — jumped more than 8% on the news, partially reversing losses tied to Trump’s original tariff announcement, according to Google Finance.
Bitcoin’s (BTC) spot price, as well as the total cryptocurrency market capitalization, rose by a similar amount, roughly 8%, as of late-day trading on April 9, CoinMarketCap data shows.
Crypto market caps are up on April 9. Source: CoinMarketCap
Decentralized finance (DeFi) protocols are particularly well-positioned to benefit from trade turmoil, which highlights the segment’s “strategic value,” according to Nicholas Roberts-Huntley, co-founder and CEO of Concrete & Glow Finance.
“DeFi offers a neutral, borderless alternative for accessing credit, earning yield, and moving capital,” Roberts-Huntley said. “For builders, this is an opportunity to double down on interoperability and censorship resistance.”
Still, crypto prices will continue to mirror the broader market for the foreseeable future, Aurelie Barthere, a research analyst at Nansen, told Cointelegraph. If the sell-off continues, expect crypto to behave as “just a higher beta risk asset correlated with risk assets at the moment,” Barthere said.
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