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Comment by gautamcgoel | Hacker News Reader

I'm confused: why would you short BTC if you knew in advance that additional tariffs would be announced? Wouldn't you expect that to increase the dollar value of BTC due to depreciation of the dollar?

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It helps to not be too academic about it and just check what happened to BTC the last few tariff announcements.

If only BTC were a decorrelated, alternative investment.

This. It has not, in practice, turned out to be the hedge that people assumed that it was.

How do tariffs depreciate the dollar? Do you just mean in the “prices go up” sense? I’m not trying to nitpick, just wondering if there is some mechanism I don’t know about that actually devalues the dollar in a fundamental way. Like if there is a chicken flu and the price of eggs skyrockets, I wouldn’t say that depreciates the dollar, for example, in strict terms, prices have just risen.

Prices going up is dollar devaluation. One doesn't cause the other - they're already two different words for the same thing.

If potato prices rise but soybean prices fall, then you can say potatoes got more expensive, soybeans got cheaper, and the dollar is worth the same. But if prices go up all across the economy in general, that is dollar devaluation.

But tariffs don’t cause prices to go up all across the economy in general. Domestic products will get more expensive in the short term due to a positive demand discontinuity, but they will fall again in the medium term as domestic producers regain access to the large swaths of the market they lost access to under the old global free market trade policy. If the tariffs continue for a long time (not guaranteed) then domestic labor compensation will also recover (perhaps not fully due to automation, but automation on the high volume stuff would free up workers to work on smaller volume products).

Side question - would you consider the converse, globalization, to be a deflationary force?

Why would you expect anything with BTC?

Hating on Bitcoin was cool in 2015. It’s proven to be a reliable store of value asset, to the point that central banks are considering reserves on it.

Bitcoin maybe as useless as gold, but that doesn’t make it more or less valuable.

Tangential, but I find it strange how bank “reserve” means something entirely different from what it used to mean.

> to the point that central banks are considering reserves on it.

Specifically, central banks run by scammers and imbeciles. Nobody with any brains is going to put their reserves in something whose only value comes from the existence of greater fools and has the downside of propping up the North Korean government.

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