US Dollar vs Bitcoin

[kotajikikox]

Now that Kamala Harris has conceded and does not seem interested in fighting the results (i.e by conducting a recount), we can now claim Trump to be the next US president for the second time. Of course, he won't have any power over anything until he is inaugurated but looking at the promises he made during his election I think we can start discussing about what could happen when Trump does whatever it he said the past few months once officiated as president.

One that concerns me is his promise of establishing bitcoin as the nation's strategic reserve. Doing this would definitely help with the perception of bitcoin to the general public and would be hugely beneficial to those who are already holding bitcoin now. However we also need to consider what this could mean for the US dollar? With bitcoin getting stronger and stronger and with the help of Trump, traditional financial sectors will dwindle down and interest will turn to digital currencies which is what Trump hopes to do as he mentioned that he wants US to be the world's capital of cryptocurrencies.

Won't having bitcoin as their strategic reserve harm US dollar? Especially with the rise of BRICS and their dedollarization agenda, won't Trump be just making their job easier if he were to prioritize bitcoin?

Don't get me wrong, as someone not from the US but is holding bitcoin, if Trump were to follow through his promises it would greatly benefit me but I am just pondering over the real chances of Trump doing this. Am I correct with my assumption that dollar might weaken as bitcoin gets stronger? and if I am, won't that make bitcoin a direct competitor of the US dollar? What will the dollar benefit from Trump doing this? or am I missing something here?

[stadus]

It's possible that the dollar might weaken if countries start gaining more confidence in Bitcoin and decide to use it instead of relying on USD. But for sure, the government sees this too. And as a reserve asset, they know how risky it is, especially since Bitcoin’s volatility is still high.

On the positive side, the US could hedge inflation with Bitcoin, which might be why they want to be a leader in Bitcoin holdings. This action is really necessary for them, but they just need to manage the risk properly. It wouldn't benefit them if Bitcoin rises but the dollar loses value. With Bitcoin’s boost, the value of the dollar in international transactions could drop, especially since Bitcoin is seen as more secure (aside from the volatility).

[Don Pedro Dinero]

Won't having bitcoin as their strategic reserve harm US dollar? Especially with the rise of BRICS and their dedollarization agenda, won't Trump be just making their job easier if he were to prioritize bitcoin?

I don't think so, with the fiat system the value of a currency is based on the faith you have in the issuing country but that faith has a direct relationship to how reliable it is economically, such as what GDP it has. If the US establishes bitcoin as a strategic reserve that will give it points, not subtract them, and even if the dollar is not going to be backed in bitcoin it will help its strength. In fact the initial reaction to Trump's election has been an appreciation of the dollar.

[Helena Yu]

Holding Bitcoin and make profit from it, The US will earn from capital gains tax.

Holding USD and hold it in banks, The US will earn from monthly fees and use their customers funds for investment.

I'm sure people will still use fiat over Bitcoin for day to day transactions, so in the end if they hold Bitcoin, they're still using USD.

So, what's actually the problem? the government earn from both.

[fuguebtc]

It's possible that the dollar might weaken if countries start gaining more confidence in Bitcoin and decide to use it instead of relying on USD. But for sure, the government sees this too. And as a reserve asset, they know how risky it is, especially since Bitcoin’s volatility is still high.

On the positive side, the US could hedge inflation with Bitcoin, which might be why they want to be a leader in Bitcoin holdings. This action is really necessary for them, but they just need to manage the risk properly. It wouldn't benefit them if Bitcoin rises but the dollar loses value. With Bitcoin’s boost, the value of the dollar in international transactions could drop, especially since Bitcoin is seen as more secure (aside from the volatility).

Does gold weaken the dominance of the USD? No, then I think bitcoin will be the same. If they really wanted to make bitcoin a national reserve currency they would turn it into digital gold and that wouldn't have any negative impact on the USD.


Bitcoin volatility is too difficult for us to control, but not too difficult for the US government. If they wanted to make it a reserve asset, they would certainly seek to hold a majority of bitcoin and by holding a majority of the total supply, they could completely control its price at will.

Let's not get confused, Trump only intends to turn bitcoin into a strategic reserve asset, not turn it into a major currency or a major means of payment and that won't affect the USD.

[Sim_card]

Bitcoin has nothing to do with USD, because bitcoin is an asset and digital currency while USD is only a fiat currency that depreciates due to inflation and bitcoin is the opposite. Using bitcoin as a strategic reserve, does not mean that people will abandon USD for bitcoin, and doesn't change USD from not being used for international trade. Trump has seen the benefits that El Salvador is enjoying for using bitcoin as their reserve funds and don't want the US to miss out from such opportunity when they can buy enough bitcoin more than El Salvador. Crypto is now the world center of attraction and US as the world power should take the lead in the cryptospace, before they miss out. Bitcoin is turning out to be a store of value soon. Keep hodli and don't sell this cheap, because the future of bitcoin is very bright.

[danherbias07]

Yes, I think that is possible, it can weaken the power of the US dollar but I think they will consider that first before making the steps. He will have his advisors who are good at this field and probably some suggestions from those who have already made a plan on how to work it out.
What I just hope is that his words are not just promises for the presidential seat because sometimes that happens and when they are near being replaced by a new one, that's the only time they will remember it, when everything is too late to be done.
I also hope that someone who is always near him will keep on pushing this promise because that will probably help him gain more trust from the cryptocurrency supporters which I think is a large part of why he was voted.

[o48o]

Now that Kamala Harris has conceded and does not seem interested in fighting the results (i.e by conducting a recount), we can now claim Trump to be the next US president for the second time. Of course, he won't have any power over anything until he is inaugurated but looking at the promises he made during his election I think we can start discussing about what could happen when Trump does whatever it he said the past few months once officiated as president.

One that concerns me is his promise of establishing bitcoin as the nation's strategic reserve. Doing this would definitely help with the perception of bitcoin to the general public and would be hugely beneficial to those who are already holding bitcoin now. However we also need to consider what this could mean for the US dollar? With bitcoin getting stronger and stronger and with the help of Trump, traditional financial sectors will dwindle down and interest will turn to digital currencies which is what Trump hopes to do as he mentioned that he wants US to be the world's capital of cryptocurrencies.

Won't having bitcoin as their strategic reserve harm US dollar? Especially with the rise of BRICS and their dedollarization agenda, won't Trump be just making their job easier if he were to prioritize bitcoin?

Don't get me wrong, as someone not from the US but is holding bitcoin, if Trump were to follow through his promises it would greatly benefit me but I am just pondering over the real chances of Trump doing this. Am I correct with my assumption that dollar might weaken as bitcoin gets stronger? and if I am, won't that make bitcoin a direct competitor of the US dollar? What will the dollar benefit from Trump doing this? or am I missing something here?

No, they are not in competition with each other. Why would people use more bitcoin if it would moon in value? That wouldn't be in any way beneficial to users. Economy works when money keeps changing hands, and that's why dollar is an ideal to use. It's rather stable and it doesn't make much sense to save it, so it keeps the economy running smoothly when people aren't hoarding it.

This is not the case with bitcoin. When it's smarter to hold then use, then everyone just rather holds and saves then consumes, or at least consumes less because they want to hodl.

There are ton of other issues with US bitcoin strategic reserve, but dollar devaluation isn't one of them.

[uneng]

Remember that last time Trump was president he claimed to be against Bitcoin, because it was harmful to Dollar currency, and he is in full support of Dollar. Therefore, let's wait to see what is really going to happen in practice. Speeches during electoral campaigns give many expectations to the voters, but once the government takes place, things happen in a very different way. Personally, I doubt Bitcoin is going to have a special importance in the upcoming government. I believe Bitcoin was just used as a cheap campaign trick to gather votes from its enthusiasts, and especially the youngest ones.

[X-ray]

Remember that last time Trump was president he claimed to be against Bitcoin, because it was harmful to Dollar currency, and he is in full support of Dollar. Therefore, let's wait to see what is really going to happen in practice. Speeches during electoral campaigns give many expectations to the voters, but once the government takes place, things happen in a very different way. Personally, I doubt Bitcoin is going to have a special importance in the upcoming government. I believe Bitcoin was just used as a cheap campaign trick to gather votes from its enthusiasts, and especially the youngest ones.

To be fair he already deployed defi, I think finally he sees something in bitcoin, just look at some of the bitcoin hater back then, many of them also turned to full support toward bitcoin.
maybe as you said in the future, the importance of BTC will be lesser but always good to have hopes at least.

I think i'm pretty sure that in the upcoming future, the US will be more flexible in regulating crypto in general, not limited to BTC but defi and other things in general as well.
I think some defi right now already seeking regulation framework to work with, can you imagine legalized ownership of an asset through NFT (not pump and dump but real use case ones) ? it just sounds great if it can happen, but right now, so many government still doesn't recognize defi and its benefits.

[Cryptohygenic]

After being admitted that he has not been inaugurated or sworn in office, we don't have to start throwing stones yet because he definitely can not execute any of the promises outside the office of his heir to the office. So until he gets into office that would be relevant for discussion. I know we would murmur in some of his promises especially that which of bitcoin which is more of our concerns because him alone can not make those derivations when the cabinets such as legislation surrounding him may not support all that he may intend to imply on global effects of bitcoin.
Perhaps there could be some anti bitcoiners amidst his jurisdiction to counter lot of those moves on bitcoin.

[stadus]

Bitcoin volatility is too difficult for us to control, but not too difficult for the US government. If they wanted to make it a reserve asset, they would certainly seek to hold a majority of bitcoin and by holding a majority of the total supply, they could completely control its price at will.

There’s no way they’d hold the majority of the total supply as that would be way too risky. They have debts to manage too, and putting most of their resources into Bitcoin would definitely make citizens question that decision. Their plan to buy even a million Bitcoin requires a huge amount of money to risk, and I’m sure there’d be plenty of criticism, especially if Bitcoin goes bearish. Confidence is one thing, but putting everything on the line like that would be a hard sell.

[SamReomo]

Am I correct with my assumption that dollar might weaken as bitcoin gets stronger? and if I am, won't that make bitcoin a direct competitor of the US dollar?

No even if Bitcoin gets stronger the US dollar won't lose its value and it will continue the way it is, because we all know that Bitcoin won't be considered as a payment method anymore when it's bought on large scale but as a reserve and that's why it's dominance won't impact US dollar in any adverse way. It's never going to compete with fiat US dollar as it's entirely different and would never ever cause dollar to lose it's value.

[MusaMohamed]

Won't having bitcoin as their strategic reserve harm US dollar?

Bitcoin is Bitcoin, US dollar is US dollar and other fiat currencies are themselves.

If any problem to make a fiat currency worse, it's up to their government and central bank that release and control money supply in that nation. It's not responsibility of other fiat currencies, other governments, other central banks from other countries. Surely it is not responsibility of Bitcoin too, never be.

Bitcoin has its value and price increase with time, and 1 US. dollar is purchasable with less satoshis, but it's because of Bitcoin growth. Bitcoin does not make US. dollar purchasing power decreasing with time.

Satoshi per dollar.
Purchasing power of the US. dollar over time.

[pooya87]

Don't get me wrong, as someone not from the US but is holding bitcoin, if Trump were to follow through his promises it would greatly benefit me but I am just pondering over the real chances of Trump doing this. Am I correct with my assumption that dollar might weaken as bitcoin gets stronger? and if I am, won't that make bitcoin a direct competitor of the US dollar? What will the dollar benefit from Trump doing this? or am I missing something here?

Well the situation with the dollar is more complicated and more dire than this. I'm afraid at this point even if US held all the bitcoins in the world it won't help them save the dollar. After all the national debt is above $35 trillion and the entire 21 million (mined and unmined) bitcoins is only worth $1.6 trillion.

Using bitcoin as reserve will also not turn it into a competitor for the dollar (just like gold reserve wont do it). It could just start a chain of events where majority of the countries around the world start doing it as well. And I rue the day China starts buying bitcoin! They already have massive amounts of gold stored and are still on a buying spree...

[kotajikikox]

Personally, I doubt Bitcoin is going to have a special importance in the upcoming government. I believe Bitcoin was just used as a cheap campaign trick to gather votes from its enthusiasts, and especially the youngest ones.

We can never know if Trump was sincere about his promises but we are just hoping he makes true to his promises. He got Elon Musk involved so I wouldn't say that he will completely forget about him and all of crypto when it was largely the reason why many voted for him.

If he doesn't make true to his promises, it would backfire on him I think. Many will not be happy and he will probably be viewed negatively by most even those who supported him. Will this be enough for him to actually make true to his promises? I am not so sure.

[Oluwa-btc]

Won't having bitcoin as their strategic reserve harm US dollar? Especially with the rise of BRICS and their dedollarization agenda, won't Trump be just making their job easier if he were to prioritize bitcoin?

With the influence of The president Trump on Bitcoin I think the US dollars will have be so much affected by this new regime of prioritizing Bitcoin over dollars but it won't be like use will be limited no, you'll definitely find alot of people making transactions with it and mind you aside holding Bitcoin in wallets inorder to get a physical fiat to work with it'll be exchanged to the us dollars for smooth and accessible transactions, so it's best the both currencies work hand in hand.

[WillyAp]

US Dollar vs Bitcoin

It rather is Bitcoin with the US Dollar. Without FIAT the former P2P would make no sense. 

[Swordsoffreedom]

Won't having bitcoin as their strategic reserve harm US dollar? Especially with the rise of BRICS and their dedollarization agenda, won't Trump be just making their job easier if he were to prioritize bitcoin?

With the influence of The president Trump on Bitcoin I think the US dollars will have be so much affected by this new regime of prioritizing Bitcoin over dollars but it won't be like use will be limited no, you'll definitely find alot of people making transactions with it and mind you aside holding Bitcoin in wallets inorder to get a physical fiat to work with it'll be exchanged to the us dollars for smooth and accessible transactions, so it's best the both currencies work hand in hand.

With the slogan "make America great again" throughout his political life, I believe that he will never accept or use any currency that harms the dominance of the USD because if it weakens, it means the US will also weaken.
I see everyone thinking that Trump using BTC will weaken the USD is not entirely true, if that happens we will soon see a president Trump looking to eliminate Bitcoin instead of supporting and being friendly with it.
I don't predict what he will do next with bitcoin after taking office but I believe bitcoin will not and cannot harm the USD in any way. If there is any currency that can hurt the USD, it is the currency from the BRICS.

[Smartprofit]

Now that Kamala Harris has conceded and does not seem interested in fighting the results (i.e by conducting a recount), we can now claim Trump to be the next US president for the second time. Of course, he won't have any power over anything until he is inaugurated but looking at the promises he made during his election I think we can start discussing about what could happen when Trump does whatever it he said the past few months once officiated as president.

One that concerns me is his promise of establishing bitcoin as the nation's strategic reserve. Doing this would definitely help with the perception of bitcoin to the general public and would be hugely beneficial to those who are already holding bitcoin now. However we also need to consider what this could mean for the US dollar? With bitcoin getting stronger and stronger and with the help of Trump, traditional financial sectors will dwindle down and interest will turn to digital currencies which is what Trump hopes to do as he mentioned that he wants US to be the world's capital of cryptocurrencies.

Won't having bitcoin as their strategic reserve harm US dollar? Especially with the rise of BRICS and their dedollarization agenda, won't Trump be just making their job easier if he were to prioritize bitcoin?

Don't get me wrong, as someone not from the US but is holding bitcoin, if Trump were to follow through his promises it would greatly benefit me but I am just pondering over the real chances of Trump doing this. Am I correct with my assumption that dollar might weaken as bitcoin gets stronger? and if I am, won't that make bitcoin a direct competitor of the US dollar? What will the dollar benefit from Trump doing this? or am I missing something here?

All countries have gold and foreign exchange reserves that are under the control of Central Banks / the Federal Reserve System. The very fact of having gold and foreign exchange reserves gives value to fiat currencies. Previously, gold was the main reserve asset.

However, we live in the 21st century and digital gold has become relevant - that is, Bitcoin. Bitcoin will become the main part of the gold and foreign exchange reserves of the Central Banks of all countries (replacing conventional gold). At the same time, fiat currencies are also changing - instead of cash bills and metal coins, digital money (the so-called CBDC) will be used.

The financial power of each state (there are currently about 200 different states in the world) will be measured by the presence of Bitcoin reserves.