Recently, Pennsylvania, ranked sixth in GDP in the US and an industrial hub, passed the 'Bitcoin Rights Bill,' officially declaring Bitcoin as a strategic reserve currency. This aligns with Trump's claim during the campaign to make Bitcoin a national reserve currency. Bitcoin has indeed performed quite well after Trump's victory. Faced with the economic difficulties in the US today, Trump is likely to elevate the importance of Bitcoin further after taking office, hoping to rescue the US economy. However, will Trump's idea work?
Bitcoin saves the country
Recently, Pennsylvania, an economic center on the US East Coast and the place where Trump was previously attacked, officially passed the 'Bitcoin Rights Bill,' declaring that it would use Bitcoin as a strategic reserve currency. This clearly echoes Trump's statements during the campaign about raising the status of Bitcoin to make it a national strategic reserve asset.
This is certainly not a coincidence.
With Trump's sweeping victory, seizing the White House and Congress, Bitcoin, favored by Trump, has also been performing quite well, soaring to a historical high of 99,660 yuan per coin on the 23rd. Trump is indeed quite hopeful that Bitcoin can help alleviate or even save the economic difficulties of the US.
However, can such a virtual currency really solve the economic problems in the US? Will Trump's wishes come true?
In fact, it was predictable that Bitcoin would rise after Trump's victory, as both Trump and the US stock market were promoting it. The underlying purpose is very clear: to use Bitcoin as a substitute for the dollar to a certain extent in the face of global de-dollarization impacts and continue to harvest global capital.
With the strong push from the US, the rise of Bitcoin is bound to attract international capital. In this case, Bitcoin becomes a reservoir for the dollar and can somewhat alleviate the potential inflation in the US.
From this logic, it is reasonable for Trump to rely on Bitcoin, but this is based on the condition that the Bitcoin market is relatively stable.
However, from the evening of the 25th to the early morning of the 26th, Bitcoin fell sharply from its high, once dropping below $93,000 per coin, with a maximum drop of over 6%.
Besides Bitcoin, other cryptocurrencies like Dogecoin, Ripple, and Binance Coin have also experienced declines to varying degrees, with Dogecoin dropping over 13%.
The exception is Ethereum, which rose by 5.6%.
This situation is clearly not what Trump and his team want to see, but the uncertainty of the virtual currency market is just like that. This also indicates that Trump's plan to use Bitcoin as a lifeline after taking office may not go smoothly because, in addition to the enormous uncertainty in the virtual currency market, many other problems will also give Trump headaches.
Wishes may turn to dust
As of September this year, the US national debt has surpassed $36 trillion, and the annual fiscal deficit of the US government is still increasing, while inflation is worsening. In this situation, can Bitcoin really save the US?
I don’t know about other things, but it is definitely unlikely for Bitcoin to harvest Chinese assets because our country recognized the significant uncertainty of Bitcoin early on and had no credit backing. Therefore, we took precautions early on, clearly stating that Bitcoin is not a currency and forbidding our financial institutions from providing settlement services for Bitcoin.
Moreover, it is even more difficult to replace the US dollar with Bitcoin. Although the dollar is in decline, it is still the unique global currency. The euro, pound, yen, and others are not effective, let alone Bitcoin, which lacks backing from any major country?
Moreover, the US has no possibility of strongly pushing Bitcoin; this is something the US cannot do.
Therefore, regarding Trump's wish to let Bitcoin replace the dollar to evade responsibilities, the possibility is also slim. Moreover, the US government currently holds just over 210,000 Bitcoins, and their trading value is lower than that of circulating Bitcoins. Even if people become optimistic about Bitcoin after Trump's victory, there is ultimately a limit; once it reaches a peak, there is really no space left.
If Trump really wants to realize his wishes, Bitcoin would have to rise at least 10 times, but the question is, can it rise?
The answer is obvious.
In this situation, Trump is likely to continue the trade and financial war with China after taking office. To put it positively, it would just be killing a thousand enemies while harming himself by eighteen hundred. What’s the point?
Many in the US government surely understand this principle, but the current US is indeed caught in the position of a world empire and cannot get down. It can either continue running or fall into the abyss.
In this case, it doesn't matter if it is Trump or Trumpsy who comes to power.