In this election cycle, former US President Donald Trump has consistently made headlines due to his newfound support for Bitcoin (BTC) and the broader crypto industry.
His stance goes beyond advocacy, positioning Bitcoin as a crucial element in the geopolitical and economic chessboard, particularly against China.
Trump Eyes Bitcoin to Erase US Debt and Dominate Energy Sector
A May report noted that Trump explored leveraging Bitcoin to solve the $35 trillion US national debt problem. Trump continues to express his enthusiasm for Bitcoin, declaring his desire to make “all the remaining Bitcoin” in the US. He suggests this strategy would position the nation as “energy dominant.”
“Biden’s hatred of Bitcoin only helps China, Russia, and the Radical Communist Left,” he added.
Read more: How To Buy Bitcoin (BTC) and Everything You Need To Know
In an interview with Bloomberg, Trump shared his viewpoint on the importance of mining all the remaining Bitcoin within the US. He stressed that failing to seize this chance could allow China to gain a significant advantage.
With the right support, Trump views Bitcoin mining as a key emerging sector that could substantially boost the US economy and enhance national security. Additionally, he highlighted Bitcoin mining as a vital defense mechanism against the potential rollout of a central bank digital currency (CBDC).
Trump’s support for Bitcoin sparked speculation that the US might use it as a strategic asset reserve during his presidency. In a recent appearance on CNBC, Bryan Courchesne, CEO and founder of crypto investing company DAIM, expressed his optimism that Trump might be open to using Bitcoin as the US’s reserve asset.
“The Justice Department holds about 200,000 units of Bitcoin. So the United States is the largest holder of Bitcoin. And so they could easily just move that over to the Department of Treasury and start right there and have 13 billion worth of Bitcoin on the balance sheet. So, it is a possible move. It just could be tough to get done,” he explained.
Bitcoin’s Unique Qualities: A Game-Changer for Reserve Assets
Reserve assets are currencies, commodities, or other assets that are easily transferable and available to monetary authorities. They are used to manage international transactions, finance trade imbalances, and mitigate the impact of foreign exchange fluctuations. Policymakers control these assets, which is essential for global trade stability.
In a recent report, VanEck noted that the primary reason for central banks or businesses to hold a currency as a reserve asset is the belief that it will maintain its utility and value over time. This relates to the money’s ability to buy a consistent basket of goods and services as well as to the assurance of engaging in legally permitted trade with that money. Nations and their businesses need confidence in their ability to access and use their funds as needed.
VanEck highlighted the US, UK, EU, and Japan as the current economic leaders. Consequently, many nations hold these assets as their reserve currencies. However, the report suggests that declines in the relative global GDP of these countries will drive a shifting trend to favor Bitcoin as the new reserve asset.
Bitcoin offers several unique properties that make it an attractive reserve asset. The protocol guarantees perfect property rights, as it does not allow for the seizure of Bitcoin. Only those with access to an account’s private keys can access its Bitcoin.
Bitcoin’s design also replaces corruptible human authorities with immutable logic. Holders do not need to worry about an entity diluting Bitcoin’s value, using it for political goals, or abusing users. Bitcoin is governed by straightforward software algorithms, making it politically and economically agnostic.
Bitcoin’s framework enables anyone, from national governments to local citizens, to hold and transact it without an intermediary. This system contrasts with current systems that rely on intermediaries like banks and payment providers to facilitate transactions.
Unlike fiat currencies, which average a lifespan of 35 years and frequently fall to monetary inflation, Bitcoin maintains its value through a fixed monetary policy. Its total supply is capped at 21 million BTC. Thus, no fiat currency can match Bitcoin’s properties since each is always vulnerable to political authorities’ monetary printing preferences.
With its scarcity, Bitcoin is often likened to gold. Gold serves as a universally recognized store of value. It acts as a hedge against inflation and an alternative to holding foreign currencies and other assets.
Historically, nations have accumulated gold bullion in preparation for war and during times of global economic uncertainty. However, Bitcoin has certain characteristics that arguably make it superior to gold. For instance, Bitcoin is easier to transport, more verifiable, and decentralized.
Read more: How to Protect Yourself From Inflation Using Cryptocurrency
Given these unique properties, Bitcoin has the potential to counteract the influence of US geopolitical rivals and ensure a greater financial economy. Therefore, Trump’s vision of incorporating Bitcoin into the national strategy could help the US strengthen its economic position and secure its position in the global financial system.
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