SCOTUS Crypto Market Surges as Donald Trump’s Tariff Cuts
The cryptocurrency market experienced a slight price increase following the U.S. Supreme Court's ruling against Donald Trump's decision to impose tariffs on Friday.
The cryptocurrency market experienced a slight price increase following the U.S. Supreme Court's ruling against Donald Trump's decision to impose tariffs on Friday. Immediately following the ruling, the price of Bitcoin rose to reach $68,200. As a result, the total market capitalization of the entire crypto market grew by nearly 1%, now exceeding $2.3 trillion. Tokens like KITE, MORPHO, LayerZero (ZRO), and Render (RENDER) were the biggest gainers in this market surge, with their prices increasing by more than 6%. The impact wasn't limited to crypto; the stock market also recovered, with the Dow Jones and Nasdaq 100 indices gaining more than 0.50%, erasing previous losses.
Court Ruling and Legal Debate
The Supreme Court majority, led by Chief Justice John Roberts, stated that Donald Trump's decision to use emergency powers to impose tariffs was not legally sound. The court argued that the actual power to determine or impose tariffs primarily rests with the U.S. Congress. However, the judges were not unanimous; Justices Clarence Thomas, Brett Kavanaugh, and Samuel Alito expressed their dissent against this decision.
Will This Surge Last?
There are several strong reasons why the current market improvement might not be long-lasting:
Trump’s Alternative Paths:
While this ruling is a major blow to Donald Trump, he still has other administrative means at his disposal to implement the tariffs. Although those processes might be time-consuming or require lengthy investigations, he may remain firm in achieving his goals.
Iran-USA War Tensions:
The biggest cause for concern is the volatile situation in the Middle East. According to various media reports, Trump has assembled the largest military force and equipment in the Middle East seen in years.
It is speculated that a major military attack on Iran could occur as early as this weekend. The probability of such an attack has also surged on the online betting platform 'Polymarket.'
Risk of Economic Instability:
An attack on Iran could lead to a major catastrophe for the global economy. This is because Iran controls the 'Strait of Hormuz,' a route through which millions of barrels of oil are transported daily. If war breaks out, oil prices will skyrocket, driving inflation out of control. In such a scenario, it would become impossible for the Federal Reserve to cut interest rates.
Decline in Demand and Investment:
Investor interest in the crypto market is also somewhat on the decline. Billions of dollars have been withdrawn from Bitcoin and Ethereum ETFs over the past few months. Additionally, futures open interest, which exceeded $250 billion last year, has now dropped below $100 billion.
However, this relief is unlikely to last long. On one hand, Trump’s attempt to impose tariffs through alternative routes, and on the other, the fear of a potential war with Iran, could create instability in the global economy.
Furthermore, the withdrawal of investments from ETFs and the waning interest in futures markets signal significant risks for the crypto market.
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