Are you dozing peacefully, confident that your crypto assets are well protected? Maybe it's time to wake up. And that’s why Jerome Powell, the guy tasked with preventing the US economy from going full looney tunes, is concerned. He's worried about tariffs. In particular, the possible creation of an entire new wave of them under a second Trump admin. And if Mr. Powell is worried, you should be too, particularly if you’re up to your neck in crypto.

Tariffs? Crypto? What's The Connection?

You might be thinking, "Tariffs? That sounds like boring economics stuff. What does that have to do with my Bitcoin?"

Here's the unexpected connection: Tariffs are like a tax on imported goods. When those taxes increase, so does the cost of everything. That leads to inflation. Inflation is the silent thief that can eat away at the value of your hard-earned dollars. Wait, it might even be putting your valuable digital assets at risk!

Let’s say you’re a single mother who is putting money aside to help send your daughter to college. In fact, you put all your life’s savings into Bitcoin. You’re counting on its appreciation potential to outstrip the rising tide of tuition expenses. If Trump 2.0 releases a new wave of tariffs, inflation would likely soar, raising the cost of all goods and services. Just like that, your hard-saved Bitcoin may not cover you as much as you’d predicted. That dream of a debt-free education? Potentially jeopardized.

Or imagine a young professional saving and scrimping to amass a down payment on her first home. A significant portion is in Ethereum. First, tariffs are likely to stave off an economic rebound. This could impact the economic stimulus being counted on by many investors. A broader crypto market sell-off might completely wipe out your substantial crypto holdings, putting homeownership out of reach even further. That first home now seems much farther out of reach, wouldn’t you say?

The crypto market is already a barometer of extreme fear and extreme greed. As of today, the Crypto Fear and Greed Index is screaming “Greed,” which, according to history, may be a sign that a correction is coming first. Throw in the variable of future trade wars and other economic instability and you’ve got a recipe for whipsawing chaos.

Fear, Greed, And The Crypto Rollercoaster

We have seen Bitcoin exceed $98,000 in the past, only to encounter resistance. All together Ethereum continues to trade range bound and showing the market phenomenal strength. Unforeseen economic shocks from outside the U.S. could still tank the breakout to $2,100 that some analysts are calling for. Even Dogecoin, traditionally the most stable of all cryptos, might get caught up in the chaos.

Oh, and bitcoin derivatives traders are a thing now, too. And most of them on Binance are shorting Bitcoin. They see something coming. Do you?

The Fed continues to walk this tightrope, leaving rates unchanged at their last meeting. Their hands may be forced if tariffs cause inflation to skyrocket. They would be forced to hike, which would further stifle all economic growth and likely crater any risk asset including crypto.

So, what can you do? Don't panic sell. Panic is never a good strategy. Instead, take these actionable steps to prepare your crypto portfolio for a potentially turbulent future:

Protect Your Crypto: Plan For Trump 2.0

The unintended side effect of all this protectionism from Trump might be a volatile 2020 for crypto investors. It's time to get real. We’re not talking politics here, we’re talking about your fiscal security fortune. Don't let fear paralyze you. Take action. Be prepared. After all, if Powell is scared, you need to be scared as well.

  • Diversify: Don't put all your eggs in one basket. Spread your investments across different cryptocurrencies and even consider adding traditional assets like stocks or bonds.
  • Manage Risk: Set stop-loss orders to limit potential losses. Take profits when appropriate. Don't get greedy.
  • Stay Informed: Monitor market news and economic indicators closely. Understanding the potential impact of tariffs on the global economy is crucial.
  • Consider Stablecoins: Holding a portion of your portfolio in stablecoins pegged to the US dollar or other fiat currencies can provide a safe haven during market volatility.
  • Don't Marry Your Crypto: Be willing to adjust your strategy as needed. The market is constantly evolving, and you need to be flexible to adapt to changing conditions.

The unintended consequence of Trump's potential tariff policies could be a wild ride for crypto investors. It's time to get real. This isn't about politics; it's about protecting your financial future. Don't let fear paralyze you. Take action. Be prepared. Because if Powell is worried, you should be too.

Are you ready?