Is the Dollar’s Dominance Dwindling? Euro & Pound Surge Fuels Crypto’s Reserve Currency Ambitions.
The ECB makes another rate cut, while the Fed stands firm. Or is the waning of the dollar an apparition that has started to float over the Satoshi Nakamoto decade-old warning about fiat?
Could Dollar Troubles Benefit Crypto?
The dollar is the world’s fiat currency champion-the greatest power, fueled by just more than American consumers. It is the emerging currency of global petroleum trade. The dollar is also the base currency against which the unshakable U.S. Treasury bond market rests. It is about influence worldwide-more than just dollars and cents.
Dollar down? Tremor in TradFi, rocket fuel for crpyto. If a three-year low is a problem for TradFi, it’s a green light for Bitcoin on a global adoption front accelerated by the trend of de-dollarization.
US Dollar Reaches 3-Year Low. Source: MarketWatch
The bright forecast of the Atlanta Fed cannot smooth out the gathering clouds: recession whispers grow louder. The Dollar is losing ground against the Euro, the Pound, and others. Meanwhile, the crypto world prepares to drown in the tide, blinded by greed – a dangerous game to play when the tide is about to turn.
There are also distressing signals from the housing market, which could have very serious implications.
“When economic storm clouds start to gather, the opinion of a certain expert is that crypto may become the unlikely shelter. In an exclusive briefing with BeInCrypto, Nic Puckrin, who is the founder of The Coin Bureau, released this provocative thesis that puts forth crypto’s very own resistivity against the factors that threaten the dollar.”
Stagflation fears? Don’t sweat it. Bitcoin is now slowly emerging as that ultimate portfolio hedge. Out with-US assets; smart money is moving in Bitcoin as faith in the American economy dissolves. And Bitcoin defies inflation, a concept built right into fiat. Now, for the fun part: Bitcoin is an orphan in the cryptoverse. No other crypto asset buys you this level of safe-haven security.
Puckrin described a Bitcoin maximalist vision for crypto investment, as Satoshi Nakamoto designed it to resist dollar turmoil.
Another way to say this is: From the ashes of the 2008 financial meltdown, a phoenix arose: Bitcoin. The revolutionary spirit of trustless, decentralized power is in its DNA because the DNA of Bitcoin is closely linked with that crisis.
Unfortunately, today’s community can forget the hard experience that forged this ethos.
Questions of Governance
Has the dollar been in distress? While the European Central Bank is slashing rates (which, of course, is exactly what President Trump has been pushing Fed Chair Jerome Powell to do), the question then remains: are confederates in the U.S. somehow able to make the dollar’s downturn a win? And what is interesting is how this compares with the crypto community’s decentralized solutions. Are we possibly seeing a transatlantic split in money policy and on faith in old-school currency?
Hold on a minute, it’s not so clear-cut. While the Union flexes considerable muscle in consumer economic matters, the US remains the carrier of hegemonic economic tram on the modern period.
Imagine the Fed’s toolbox very nearing empty before the real storm arrived. Whereas interest rates are getting cut now, it might feel like a quick fix, but it is like firing the biggest cannon in a skirmish before leaving yourself defenseless when the war actually breaks out. When rates finally hit rock bottom, the Fed will have no ammunition left in its arsenal to muzzle some other economic calamity.
Meanwhile, institutional investors are fleeing the dollar and largely moving to Bitcoin.
Investors Turn Bearish on the Dollar. Source: The Kobeissi Letter
Is the risky tariff ploy of Trump the ultimate masterstroke or a colossal miscalculation? After having claimed that tariff relief is turbocharging the US economy, the President now threatens tariffs on the EU, leaving many wondering if such a protectionist push will actually pay off.
Similarly, Trump reported positive negotiations with President Xi today, but threatened sanctions on China less than a week ago.
Trade wars create havoc for the dollar, but the crypto market somehow remains calm. This is the very reason that Satoshi Nakamoto developed Bitcoin: a place where government overreach could never touch.
Trustless and leaderless, Bitcoin is immune to concerns that highly impact nation-states. Puckrin predicts this to fuel BTC investment:
As the ecosystem metamorphoses, prepare for a great Wall Street-style divergence between Bitcoin and its altcoin cousins. Investors in need of shelter from the storm may flock to Bitcoin for its much-stated stability: leaving altcoin markets behind. The only alternative life raft? Tokenized real-world assets: meaning, gold for a blockchained age.
Storm clouds are indeed gathering, but the full fury of this economic tempest has yet to be unleashed upon us. For the discerning investors, a window remains-a chance to bail out of sinking dollars onto the rising tide of crypto before the deluge hits.
Ultimately, there’s no absolute way to predict which way the market will go.
Thanks for reading US Dollar Drops to 3-Year Low – Is Fiat Failing as Satoshi Predicted?
