Could 2025 be a turning point for Bitcoin to be accepted in global reserves?$BTC
Recent developments suggest that Bitcoin stands out as a potential tool for economic stability amid rising inflationary pressures.
"Bitcoin's limited supply makes it a hedge against the dollar," he said, emphasizing the increasing interest in cryptocurrencies.
Does 2025 mark Bitcoin’s transformation into a reserve asset? Analyzing Japan’s economic situation offers clues about the cryptocurrency’s role in its financial future.
Understanding Japan's economic problems in 2025
The latest FOMC rate cut shook the markets and set off an "unexpected" transformation.
The Fed decision on December 18 made headlines, lifting the US Dollar Index to a two-year high of 108.54.
The results were swift and severe. Bitcoin lost 14% in just three days, putting pressure on global currencies. The Japanese yen was also affected, falling to a five-month low of 158 against the dollar. The Bank of Japan (BOJ) acted quickly, holding interest rates steady. But the real storm is yet to come.
The long-term impact of a rising dollar could be extensive, with inflationary pressures expected to rise further.
The first signs are starting to show. Japan’s annual inflation rate is set to rise to 2.9% in November 2024, its highest since October 2023. This is not just a statistical indicator, but also a sign of things to come. Rising inflation and a strong dollar are combining to put Japan in a difficult position. Imports are becoming more expensive, and this continues to strain businesses and consumers.
This shift comes amid a demographic crisis in Japan, compounded by an aging population and falling birth rates.
This development deepens the challenges of 2025 by increasing the pressure on the workforce.
So, could Bitcoin reserves be the right solution?
The answer is quite complex – both “yes” and “no.” On the one hand, Bitcoin’s limited supply makes it a powerful hedge against rising inflation.
Unlike easily printed currencies like the U.S. dollar, Bitcoin's limited supply offers Japan and other economies a hedge against currency depreciation.
But there is also a significant downside: Bitcoin’s price can be extremely volatile, making it a risky asset for a country like Japan that prioritizes stability over everything else.
However, as Japan’s economy faces increasing pressures, the idea of Bitcoin reserves may no longer be the distant and impractical idea it once was. Indeed, it may become a necessity for economic resilience.
This shift is not limited to national economies. On a smaller scale, major exchanges are also accumulating Bitcoin. For example, Bitfinex’s Bitcoin reserves recently rose above $230 million, the highest in three years.
As more countries adopt Bitcoin as a “safety net” against increasing global market volatility, high liquidity is expected to flood the market and exchange platforms are also preparing for the increased demand.
As a result, with the US dollar continuing to dominate, many economies are looking for alternative solutions. Bitcoin could be an answer to this question, but only if its price stabilizes in the coming year.
If so, using Bitcoin as a hedge or even as a form of payment may no longer be a dream.
