CryptoQuant CEO and founder Ki Young Ju said that President-elect Donald Trump’s Bitcoin (BTC) policies likely depend on the perceived strength of the United States economy and the US dollar by the global investment community.
Ju argued that store-of-value assets like Gold and BTC surge in price when investors perceive threats to US economic hegemony. However, investors continue to express confidence in the US economy and see the US dollar as a safe haven currency.
The CEO said that this position of strength makes it unlikely that the Trump administration would adopt a Bitcoin strategic reserve to protect US dollar dominance and may cause the President-elect to backtrack on pro-BTC policies. The CEO wrote:
“Even before his inauguration, Trump consistently warned other world leaders of the power gap between the US and other nations. This rhetoric, combined with increased capital inflows to the dollar, could renew confidence in its supremacy.”
“Around me, many Koreans are choosing US dollars as a safe haven over gold or Bitcoin, particularly as the Korean won weakens,” The CEO continued. This trend is also seen in emerging economies where individuals use US dollar stablecoins to store value.
Related: US government will not buy Bitcoin in 2025 — Galaxy Research
Overcollateralized Stablecoins extending US dollar dominance
Paxos co-founder and CEO Charles Cascarilla recently told Cointelegraph, at the Bitcoin Middle East and North Africa (MENA) conference, that the entire financial system will eventually be onchain.
Dollar-pegged stablecoins will be a cornerstone of the blockchain economy and improve the utility of the US dollar by bringing the speed and worldwide connectivity of the internet to the fiat currency, Cascarilla said.
Individuals in jurisdictions experiencing hyperinflation tend to use the US dollar as a store of value against rapidly depreciating local fiat currencies.
In March 2024, the Turkish lira’s inflation rate hit a staggering 67%. Unsurprisingly, Turkey has the highest rate of stablecoin purchases, expressed as a percentage of gross domestic product (GDP), in the world.
A 2023 report from Chainalysis revealed that over 50% of the digital assets sent to the Latin American countries of Argentina, Brazil, Columbia, Venezuela, and Mexico were stablecoins.
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