The US dollar faces mounting pressure as its strength declines, with Bitcoin emerging as a potential relief valve, according to US President Donald Trump. His statements come amid increasing angst over surging US government bond yields. They point to the ongoing massive trade deficits, which just might indicate a coming change in the global financial order. Macroeconomist and Bitcoin advocate Lyn Alden's phrase, "nothing stops this train," underscores the expectation that governments will continue printing money, further eroding the value of their currencies.
During a recent press briefing, Trump recognized the influence Bitcoin has been gaining, and how it lessens the pressure of the dollar.
"It has become amazing. I mean, it is the jobs that it produces, and I notice more and more you pay in Bitcoin. People are saying it takes a lot of pressure off the dollar, and it is a great thing for our country." - Donald Trump
As a sign of the currency’s waning supremacy, the dollar currency index (DXY) recently fell to a three-year low. At the same time, surging US government bond yields indicate growing investor skepticism about the US government’s creditworthiness and debt sustainability.
Uneconomic, persistent trade deficits – financed in part with money creation – play a role in diluting the value of the US dollar. In their view, this reality results in a bad conflict of interest. It includes the perils of being the issuer of the world’s reserve currency, the importance of keeping balanced trade and the longevity of the currency’s value.
Some critics say that Bitcoin’s rapid adoption would further threaten the dollar’s dominance, and as a result could cause it to collapse. Proponents such as Lyn Alden have presented strong arguments that Bitcoin is uniquely positioned to provide global liquidity needs. They recognize that this can only be at the cost of the currency’s long-term value. Alden has previously predicted Bitcoin could eventually be worth seven figures.
When pressed on the idea of crypto divesting to help get key bills passed, Trump deftly sidestepped the question. This maneuver led to even further guessing over the government’s direction with cryptocurrencies.
