It has been a turbulent month for cryptocurrencies — marked by a massive sell-off and sharp gains — after US President Donald Trump announced sweeping “reciprocal tariffs” against nearly all imports from more than 180 countries. Industry experts however remain bullish on bitcoin — with some predicting that it could hit the $250,000 mark as early as this year.
According to a recent analysis by Binance Research, the overall crypto market capitalisation has dropped about 25.9% from January highs as reciprocal tariffs sparked widespread panic — wiping out about $1 trillion in value by the first week of April. Bitcoin traded below the $77,000 mark on over the last week — before spiked above $82,000 on Wednesday as Trump announced a 90-day pause on tariffs.
“What will happen is that the tariff stuff will be a dud, and that people will realize that the world is willing to negotiate, and it’s really just US versus China. And a lot of people will side with us. Some people side with China…The markets will stabilize a little bit, and they’ll get used to the new normal, and then the Fed will lower interest rates, and then you’ll have a lot of fast, cheap money, and then it’ll pour into crypto,” IOHK and Cardano blockchain founder Charles Hoskinson told CNBC on Tuesday.
The prediction came a less than a day before Trump announced a three month tariff pause for all countries except China (including Hong Kong and Macau). An executive order released late on Wednesday said that the previously outlined tariffs would be paused till July 9 while the 10% baseline tariff imposed on all countries continued to remain in place. Meanwhile both China and the US have announced multiple tariff hikes — often changing the figures in a matter of hours. The US now imposes a 145% tariff on Chinese imports while Beijing has announced a similar levy of 125% for American goods.
Hoskinson opined that there would be several factors driving the shift — including the steady growth in crypto adoption, the changing geopolitical situation and new legislation.
He also foresaw new stablecoin legislation being passed in the coming months — which could in turn incentivise the ‘Magnificent 7’ companies to begin adopting the assets.
Stablecoins are a type of cryptocurrency whose values is pegged to another asset (such as a fiat currency or gold) in order to ensure a stable price. They are however backed with real-world assets.
Billionaire Tim Draper had also made a similar prediction in late March — just before the tariff-induced market upheaval saw cryptocurrencies plunge. He had previously forecast as similar rally for Bitcoin by the end of 2022 which did not materialise.
Crypto trader Arthur Hayes went a step further — predicting in mid-March that the Federal Reserve was about to step in to stabilize markets and potentially trigger a bitcoin price boom. He has forecast that bitcoin price will reach $250,000 by the end of the year as the Fed is forced to flip dovish and make efforts to prop up the economy and asset prices.