As Donald Trump's inauguration is set for January 20, 2025, observers are closely monitoring his economic directions, particularly their potential impact on bitcoin. According to Ki Young Ju, founder of CryptoQuant, Trump's policies may depend on the balance between dollar dominance and the prospects that cryptocurrency offers. This analysis highlights issues related to dollar hegemony, a currency that continues to dominate global exchanges despite losing more than 90% of its value since 1913.
While some countries are adopting digital solutions to escape currency crises, such as the rise of stablecoins in emerging economies, the role of bitcoin remains ambiguous. This theme, situated at the crossroads of traditional finance and breakthrough technologies, raises questions about the future of cryptocurrency in an economic system where U.S. policies still affect the rest of the world.
Strong USD: Barrier or Opportunity for Bitcoin?
Ki Young Ju, founder of CryptoQuant, emphasizes that Donald Trump's decisions regarding bitcoin may be influenced by perceptions of the economic strength of the United States and the global dominance of the dollar. He explains that reserve assets such as gold and bitcoin tend to increase in value when investors perceive a threat to U.S. economic hegemony. "Reserve assets such as gold and bitcoin see their value rise when investors perceive a threat to U.S. economic hegemony," he states. Furthermore, he highlights the correlation between geopolitical dynamics and volatility in financial markets.
However, according to Ki Young Ju, the dollar continues to maintain its role as a safe haven to this day, particularly due to the confidence it generates among international investors. This clear strength is evident through the continued capital flow supporting the dollar, even in the face of economic instability. "In emerging economies, people prefer the dollar or stable currencies indexed to the dollar over bitcoin or gold, especially during periods of currency instability," he points out.
This reality illustrates the maintenance of dollar dominance, reinforced by economic policies attracting investors to assets backed by this currency. In this regard, the dollar strength index, which has continuously increased since October 2024, reflects the greenback's resilience against global economic uncertainties. Your first cryptocurrency with Binance This link uses the affiliate program.
Stablecoin: Momentum for the Dominance of Digital USD
An important factor further reinforcing the dollar's position is the rapid rise of stablecoins. Charles Cascarilla, CEO of Paxos, states that "stablecoins backed by the dollar will play a crucial role in the blockchain economy, combining the speed of the internet with the stability of fiat currency." Such an observation sheds more light on the potential of stablecoins in modernizing the global financial system and reinforcing the central role of the dollar.
This momentum is particularly evident in economies affected by high inflation, such as Turkey, where stablecoins currently account for a significant portion of transactions. The country's rapid inflation, at 67% in March 2024, has driven people to seek stable alternatives, making stablecoins the preferred solution. This phenomenon presents an interesting paradox. While bitcoin is often viewed as a hedge against currency crises, it is the dollar-backed stablecoins that attract attention in these contexts. These digital instruments, responding to the demands of a changing economy, indirectly reinforce the dollar's dominance in the global market.
Donald Trump's strategic choices could also play a central role in the development of this trend. If he prioritizes protecting the supremacy of the dollar, it could slow policies favorable to bitcoin adoption and accelerate the digitization of fiat currencies through stablecoins. Consequently, the future of bitcoin will depend on a delicate balance between the technological innovation it represents and the geopolitical issues related to the economic power of the United States.
This analysis provides information about the complex forces reshaping the future of bitcoin according to U.S. economic policies. On one hand, maintaining the dominance of the dollar remains a strategic priority for the United States. On the other hand, the gradual integration of bitcoin and blockchain technologies raises questions about the balance between innovation and geopolitics. In this context, the Trump administration could play a key role in influencing the interaction between traditional fiat currencies and cryptocurrencies, thus defining new dynamics for the global economy.
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