19h00 ▪
6
min reading ▪ by
Luc Jose A.
As Donald Trump's inauguration scheduled for January 20, 2025 approaches, observers are scrutinizing his economic directions with interest, in particular their potential impact on bitcoin. According to Ki Young Ju, founder of CryptoQuant, Trump's policies could depend on the balance between the supremacy of the dollar and the prospects offered by cryptos. This analysis provides information on the issues linked to the hegemony of the dollar, which continues to dominate global trade despite a loss of value of more than 90% since 1913. While some countries adopt digital solutions to escape monetary crises, such as the rise of stablecoins in emerging economies, the role of bitcoin remains ambiguous. This subject, at the crossroads of traditional finance and disruptive technologies, questions the future of cryptos in an economic system where American policies still influence the rest of the world.
A strong dollar: barrier or opportunity for Bitcoin?
Ki Young Ju, founder of CryptoQuant, pointed out that Donald Trump's decisions regarding bitcoin could be influenced by the perception of the economic strength of the United States and the global dominance of the dollar. He explained that reserve assets such as gold and bitcoin tend to increase in value when investors perceive a threat to US economic hegemony. “Reserve assets like gold and bitcoin see their value rise when investors perceive a threat to U.S. economic hegemony,” he said. In addition, it highlights the correlation between geopolitical dynamics and fluctuations in financial markets.
However, according to Ki Young Ju, the dollar today retains its role as a safe haven, in particular because of the confidence it inspires among international investors. This apparent solidity is manifested in capital flows which continue to favor the dollar, even in unstable economic contexts. “In emerging economies, citizens favor dollars or dollar-pegged stablecoins rather than bitcoin or gold, particularly in times of monetary instability,” he said. This reality illustrates the continued dominance of the dollar, reinforced by economic policies that attract investors to assets backed by this currency. As such, the dollar strength index, which has been rising steadily since October 2024, testifies to the greenback's ability to withstand global economic uncertainties.
Stablecoins: a driving force for the dominance of the digital dollar
A key element further strengthening the dollar's position is the rapid rise of stablecoins. Charles Cascarilla, CEO of Paxos, said that “dollar-backed stablecoins will play a key role in the blockchain economy, which combines the speed of the internet with the stability of a fiat currency.” Such an observation sheds further light on the potential of stablecoins to modernize the global financial system and consolidate the central role of the dollar.
This dynamic is particularly evident in economies hit by high inflation, such as Turkey, where stablecoins now represent a significant share of transactions. The country's rapid inflation, which was at 67% as of March 2024, has led citizens to seek stable alternatives, making stablecoins a preferred solution. This phenomenon reveals an interesting paradox. Although bitcoin is often seen as a hedge against currency crises, it is dollar-backed stablecoins that attract attention in these contexts. These digital tools, which meet the needs of a changing economy, indirectly strengthen the dominance of the dollar on the global market.
Donald Trump's strategic choices could also play a central role in the evolution of this trend. If it were to prioritize the protection of the supremacy of the dollar, this could slow down policies favorable to the adoption of bitcoin and would accelerate the digitalization of fiat currencies through stablecoins. The future of bitcoin will therefore depend on a delicate balance between the technological innovation it represents and the geopolitical issues linked to the economic power of the United States.
This analysis provides insight into the complex forces that are reshaping the future of bitcoin in the face of American economic policies. On the one hand, preserving the supremacy of the dollar remains a strategic priority for the United States. And on the other, the progressive integration of bitcoin and blockchain technologies questions 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, thereby defining new dynamics for the global economy.
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Luc Jose A.
A graduate of Sciences Po Toulouse and holder of a blockchain consultant certification issued by Alyra, I joined the Cointribune adventure in 2019. Convinced of the potential of blockchain to transform many sectors of the economy, I took the commitment to raise awareness and inform the general public about this constantly evolving ecosystem. My goal is to enable everyone to better understand blockchain and seize the opportunities it offers. I strive every day to provide an objective analysis of current events, to decipher market trends, to relay the latest technological innovations and to put into perspective the economic and societal issues of this ongoing revolution.
