FameEX Hot Topics | Trump: Bitcoin Relieves Strain on the US Dollar

During a recent White House press conference, U.S. President Donald Trump praised Bitcoin's potential positive impact on the U.S. economy, particularly its ability to relieve pressure from the U.S. dollar. Trump expressed his admiration for the cryptocurrency industry, highlighting its rapid growth and significance in global geostrategic competition. He remarked, "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."

Trump's comments seemed to reference the Triffin Dilemma, a concept that explores the conflict between the U.S.'s role as the issuer of the global reserve currency and the need to maintain long-term currency value. According to digital asset researcher Anders X, this dilemma arises from the U.S.'s necessity to run trade deficits to meet global demand for dollars. The dollar is used by foreign countries for trade and as a store of value, which results in persistent trade deficits financed by money creation, ultimately diluting the dollar's value over time.

The U.S.'s unique position as the issuer of the world's reserve currency means that it must balance short-term liquidity demands with long-term currency stability. Critics argue that the U.S. dollar's continued inflationary pressures have long-term consequences, which could be mitigated by Bitcoin’s fixed supply. Trump had previously suggested that Bitcoin might be used to address the growing national debt, which is currently exceeding $37 trillion. However, experts argue that even if the U.S. Treasury owned the entire Bitcoin supply, it would still fall short of covering this debt.

Despite Bitcoin's potential, analysts caution that the U.S. government’s ongoing trade deficits and growing debt will continue to erode the value of the dollar. Macro economist Lyn Alden, a Bitcoin advocate, has coined the phrase "nothing stops this train," referring to the likelihood that global governments will persistently print money, further devaluing national currencies. Alden's statement underscores the challenges of maintaining financial stability in the face of increasing government debt.

The U.S. dollar’s weakening strength was highlighted recently when the dollar currency index (DXY) fell to its lowest level in three years. This decline is accompanied by rising U.S. government bond yields, signaling deteriorating investor confidence in the creditworthiness of the U.S. government and the sustainability of its debt. This situation has raised concerns about the future stability of the dollar.

Disclaimer: The information provided in this section is for reference only and does not represent any investment advice or the official views of FameEX.