Bitcoin surged 7.5% in 24 hours to $81,700 this week, reigniting debates about its role in a shifting financial landscape. Leading the charge, asset manager Bitwise reaffirmed its bold $200,000 year-end price target for Bitcoin, arguing that global trade instability could fuel its rise.
Trade Wars and a Weakening Dollar
Bitwise Chief Investment Officer Matt Hougan doubled down on his firm’s prediction this week, linking Bitcoin’s potential surge to U.S. trade policies. President Donald Trump’s aggressive tariffs, including a 125% levy on Chinese goods, risk destabilising the U.S. dollar’s dominance, Hougan noted. “A weaker dollar equals a stronger Bitcoin,” he declared, pointing to the U.S. Dollar Index (DXY), which has slumped 7% since January.
This week Trump paused most reciprocal tariffs for 90 days on April 9 but maintained a 10% baseline on imports. Critics warn this could accelerate global efforts to bypass the dollar. Steve Miran of the White House Council of Economic Advisers recently criticised the greenback’s reserve status, calling it a driver of “unsustainable trade deficits.”
Gold 2.0
Hougan argues that dollar uncertainty pushes institutions toward “hard money” alternatives like Bitcoin and gold. “When the dollar’s stability falters, people look elsewhere,” he said. VanEck analysts added fuel to this narrative, reporting that China and Russia have begun settling energy trades in Bitcoin.
This shift hints at a fragmented future for global reserves. “We’re moving toward a multi-reserve system,” Hougan explained. Bitcoin’s fixed supply and decentralisation make it a viable hedge, especially as nations like Iran and Venezuela explore crypto to evade sanctions.
ETFs and Halving Fuel Demand
Bitwise credits Bitcoin’s 2024 halving, which slashed new supply by 50% and booming institutional demand for its bullish outlook. Spot Bitcoin ETFs, approved last year, have already attracted billions. BlackRock’s iShares Bitcoin Trust leads the pack, while Morgan Stanley prepares to offer crypto ETFs to wealth clients.
“Too much demand, too little supply,” Hougan summarised. Despite a 32% correction from January’s peak, Bitcoin’s current price aligns with past bull market pullbacks. Analyst Will Clemente echoed this optimism, calling Bitcoin “the fastest horse” in a liquidity-driven race.
Volatility and Policy Wildcards
Not everyone’s convinced. Bitcoin’s notorious volatility remains a hurdle. ETF outflows have hit $5 billion since February, reflecting short-term fears. The U.S. Strategic Bitcoin Reserve holding seized assets also disappointed traders by avoiding new purchases.
Policy shifts could further disrupt the rally. Federal Reserve rate cuts might boost Bitcoin, but sudden dollar strength or eased trade tensions could stall momentum. “Macro surprises are always a threat,” one trader warned.
The Road to $200K
Bitwise’s target implies a 145% jump from current levels. Historically, Bitcoin has rallied over 150% in post-halving years. Key milestones include broader ETF adoption, clearer U.S. regulations, and rising national reserves.
Nine countries already hold Bitcoin; Bitwise predicts this could double by December. “Every nation exploring BTC reserves adds pressure,” Hougan said. On the other hand, Trump’s tariff pause offers a temporary breather, but analysts say deglobalisation trends favour Bitcoin long-term.
Beyond 2025: A Million-Dollar Future?
Bitwise isn’t stopping at $200,000. Hougan speculates Bitcoin could hit $1 million by 2029 if it rivals gold’s $12 trillion market cap. Skeptics call this unrealistic, but proponents note Bitcoin’s 2024 climb from $73,000 to $103,900 took mere weeks.
“It’s about liquidity, not earnings,” Clemente stressed. As trade wars escalate and alternatives to the dollar gain traction, Bitcoin’s role as digital gold may solidify. For now, all eyes remain on ETF inflows, tariff talks, and the DXY’s slide.
Final Analysis
Bitcoin’s path to $200,000 hinges on a fragile cocktail of geopolitics, institutional adoption, and supply shocks. While risks loom, Bitwise’s gamble reflects a broader belief: in a fractured financial world, decentralised assets may thrive. As Hougan put it, “The rules are changing; Bitcoin’s ready to write them.”
