Trump's Bitcoin Approach Hinges on US Dollar's Status as a Safe Haven Asset

CryptoQuant's Ki Young Ju suggests Trump's Bitcoin policies are unlikely to shift as investors prioritize the US dollar's safe-haven status. With capital flowing into the dollar, the administration may view Bitcoin as a challenge to economic supremacy.

Trump’s Bitcoin Policies May Reflect Global Dollar Confidence

President-elect Donald Trump's Bitcoin policy, according to CryptoQuant founder and CEO Ki Young Ju, will most certainly be influenced by how the international investment community views the US economy and the currency.

Gold and Bitcoin, according to Ju, see price spikes whenever investors anticipate challenges to the United States' economic dominance. Despite this, investors maintain their faith in the US economy and the dollar's status as a safe haven currency.

Based on the CEO's assessment, the incoming Trump government is in no position to implement a Bitcoin strategic reserve in order to preserve the dollar's dominance, and the president-elect may even reverse his stance on pro-BTC legislation. In his letter, the CEO stated:

"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."

Investors Continue to Favor the US Dollar Over Bitcoin

"Around me, many Koreans are choosing US dollars as a safe haven over gold or Bitcoin, particularly as the Korean won weakens," said the CEO. The usage of US dollar stablecoins as a means of value storage is a trend that is also seen in developing economies.

While speaking to Cointelegraph at the Bitcoin MENA conference, Charles Cascarilla, co-founder and CEO of Paxos, predicted that the whole financial system will be onchain in the future.

Stablecoins Gain Momentum in Emerging Markets

According to Cascarilla, dollar-pegged stablecoins will consolidate the global reach and lightning-fast transaction speeds of the internet into the fiat currency, making it more valuable.

As local fiat currencies in hyperinflationary states depreciate at an alarming rate, people there often seek refuge in the US dollar.

An unprecedented 67% inflation rate was recorded in the Turkish currency in March 2024. If we look at stablecoin purchases as a % of GDP, Turkey naturally has the highest rate in the world.

Stablecoins constituted more than half of the digital assets transferred to Mexico, Argentina, Brazil, Colombia, and Venezuela in 2023, according to a report by Chainalysis.