TLDR:
- Bitwise CIO Matt Hougan claims Bitcoin will benefit from Trump administration’s push for a weaker dollar
- Trump’s tariff policies are seen as deliberately weakening the US dollar, potentially changing its reserve currency status
- Bitcoin has historically shown negative correlation with the US Dollar Index (DXY)
- Bitwise maintains its $200,000 end-of-year Bitcoin price target despite market volatility
- Global uncertainty could accelerate a shift toward multiple reserve currencies, with Bitcoin positioned as a key alternative store of value
The Trump administration’s push toward a weaker US dollar could create a favorable environment for Bitcoin, according to Bitwise Chief Investment Officer Matt Hougan. In a note titled “The Fallout From Trump’s Tariff Push,” dated April 8, 2025, Hougan argues that recent tariff threats and foreign exchange maneuvers might drive greater investor interest in Bitcoin as a hard money alternative.
Markets have experienced turbulence following President Trump’s announcement of wide-ranging import duties last week. This led to panic in equities markets and pressure on risk assets. In response to the market volatility, Trump announced a 90-day pause on tariffs for countries that haven’t retaliated against the US.
Despite the confusion in markets, Hougan focuses on what he sees as a clear point: “The Trump administration wants a weaker dollar, even if it means sacrificing the dollar’s role as the world’s sole reserve currency.” This policy direction, he argues, has major implications for Bitcoin and other digital assets.
The Dollar’s Reserve Status in Question
Steve Miran, chairman of the White House’s Council of Economic Advisers, addressed the issue in a speech released Monday. Miran attributed America’s “persistent currency distortions” to the dollar’s reserve function, claiming it has “decimated our manufacturing sector and many working-class families and their communities.”
“While it is true that demand for dollars has kept our borrowing rates low, it has also kept currency markets distorted,” Miran stated. The underlying message, according to Hougan, is clear: “The dollar needs to go lower.”
This policy shift could open the door for new reserve assets to emerge. Hougan suggests that a move away from the US dollar as the single reserve currency toward a more fractured system could give hard money assets like Bitcoin and gold a larger role on the global stage.
Bitcoin’s Historical Dollar Relationship
Hougan points to Bitcoin’s historically negative correlation to the US Dollar Index (DXY) over the past five years. When the dollar falls, Bitcoin typically rises. This pattern leads Hougan to expect Bitcoin to climb as the dollar weakens.
“Dollar down equals bitcoin up. I expect this pattern will continue,” Hougan wrote in his client note. In the short term, this relationship could drive Bitcoin higher as the tariff policies put downward pressure on the dollar.
Bitcoin traded around $82,300 at the time of the CoinDesk report, while other sources noted it fell below $77,000 as new tariffs from China impacted markets. Despite this volatility, Bitwise maintains its end-of-year price target.
Long-Term Bullish Case for Bitcoin
The longer-term view presents an even more bullish case for Bitcoin, according to Hougan. He suggests that global uncertainty could accelerate a shift away from a single reserve currency toward multiple stores of value.
“A shake-up in the global macro system creates an opportunity for new reserve assets to emerge,” Hougan wrote. In this context, he positions Bitcoin as “a scarce, global, digital store of value that sits outside the control of any government or entity.”
In an interview with Bloomberg, Hougan emphasized that Bitcoin is “the hedge against fiat currency debasement.” He sees the US and other major economies creating conditions where digital assets may thrive in a more fractured reserve system.
Hougan also highlighted increasing institutional investment in cryptocurrency markets and evolving regulatory attitudes. “The government now owns Bitcoin and has removed a huge amount of regulatory risk,” he noted, calling this “the best risk-adjusted moment to buy Bitcoin” he has seen.
Despite market fluctuations, Bitwise remains confident in its price projection.
“In December, Bitwise predicted that bitcoin would end the year at $200,000. I still think that’s in play,” Hougan concluded in his note.
