According to Cointelegraph, the future of Bitcoin (BTC) policies under President-elect Donald Trump may hinge on the global investment community's perception of the United States economy and the US dollar. Ki Young Ju, CEO and founder of CryptoQuant, suggests that assets like Gold and Bitcoin typically see price increases when investors sense threats to US economic dominance. However, current investor confidence in the US economy and the US dollar as a safe haven currency remains strong.
Ju believes this confidence in the US dollar's strength makes it improbable for the Trump administration to adopt a Bitcoin strategic reserve to maintain US dollar dominance. This could lead to a reversal of any pro-Bitcoin policies. Ju noted that even before taking office, Trump frequently highlighted the power disparity between the US and other nations, which, coupled with increased capital inflows to the dollar, might bolster confidence in its supremacy.
Ju also observed that many Koreans prefer US dollars over gold or Bitcoin as a safe haven, especially as the Korean won weakens. This trend is mirrored in emerging economies where individuals opt for US dollar stablecoins to preserve value. The dollar strength index indicates that the US dollar has been gaining strength since October 2024.
In related developments, Charles Cascarilla, co-founder and CEO of Paxos, shared insights at the Bitcoin Middle East and North Africa (MENA) conference. He stated that the financial system is moving towards being entirely onchain, with dollar-pegged stablecoins playing a crucial role in the blockchain economy. These stablecoins are expected to enhance the utility of the US dollar by integrating the speed and global connectivity of the internet with fiat currency.
In regions experiencing hyperinflation, the US dollar is often used as a store of value against rapidly depreciating local currencies. For instance, in March 2024, Turkey's inflation rate soared to 67%, leading to the highest rate of stablecoin purchases as a percentage of GDP globally. A 2023 report from Chainalysis highlighted that over 50% of digital assets sent to Latin American countries like Argentina, Brazil, Colombia, Venezuela, and Mexico were stablecoins.
