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Trump Would Raise Inflation. Not Good for Cryptocurrencies, Says Analyst – DL News
- Tax cuts, tariffs and a weaker dollar lead to inflation, Noelle Acheson said.
- Higher inflation leads to lower demand for risky assets, such as cryptocurrencies.
Former President Donald Trump is pro-crypto.
He is encountered with major Bitcoin miners and speak at an industry conference, while crypto boosterism is even part of the Republican Party elections platform.
Many in the industry faint on Trump and I think he “pump their bags.”
But could Trump’s economic policies end up hurting, rather than helping, cryptocurrency markets?
If we assume that the former president’s economic platform leads to higher inflation, then yes, said Noelle Acheson, a cryptocurrency and macroeconomics analyst, in a recent newsletter.
High inflation, low risk
Trump wants to “end inflation,” according to the Republican Party’s election platform.
However, GOP proposals to cut taxes, implement large-scale tariffs and push for a weaker dollar typically lead to inflation, Acheson says.
She is not the only one to support this analysis. It is what 16 economists who have won the Nobel Prize have also supported, according to Axes.
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J.P. Morgan he offered a similar analysis.
“Lower inflation means lower interest rates, which should be good for risk assets, including cryptocurrencies,” Acheson wrote. “Higher inflation, perhaps not so much, at least in the short term.”
To be fair, he then went on to analyze how Trump’s push for a weaker dollar could also lead to currency turmoil, which could in turn make assets like cryptocurrencies more attractive.
“This should be positive for BTC,” he wrote, “as currency turmoil will increase the appeal of a capped supply asset that can diversify reserves without being impacted by geopolitics,”
The drivers of the cryptocurrency market
Bitcoin is up 1% in the last 24 hours, hitting $67,479.
Ethereum remained almost unchanged, up 0.1% over the same period, settling at around $3,499.
Solana jumped 4.7% to around $181.
What are we reading?
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Ben Weiss is a Dubai-based correspondent at DL NewsHave a suggestion? Email him at bweiss@dlnews.comA previous version of this article displayed an incorrect price for Solana.