Donald Trump mourns the US dollar
As Donald Trump became the first former US president to be arrested, he attacked the declining value of the US dollar in his first public statement following his arraignment. Should investors start looking to safe havens like Bitcoin?
– Our currency is crashing and will soon no longer be the world standard, which will be our biggest defeat in 200 years, Trump said.
What does Donald Trump’s statement about the dollar mean?
Former President Trump pleaded not guilty to 34 felonies, which included allegations of falsifying business documents by paying money to two women before the 2016 US election. In response, the billionaire shifted his target to the left before attempting to run for the US presidency in 2024.
Donald Trump claimed that the US sovereign currency is collapsing, hinting at its weakened position as an international standard. The businessman called it the biggest defeat that would take away the United States as a “great power”.
The US dollar is one of the world’s most used currencies. It is also the primary reserve currency, mainly due to the size and stability of the US economy. Several commentators have questioned the status of the US dollar as a safe-haven currency during crises such as COVID-19.
The recent banking crisis following the collapses of Silicon Valley and Signature Bank also pointed to the systemic risk when large centralized institutions fail. Trump claimed that if he were president, the state of the US economy would be in better shape.
He stated,
“Our economy is crashing. Inflation is out of control. Russia has joined China. Can you believe it? Saudi Arabia has joined Iran.”
Bitcoin stands to gain ground
In response, Bitcoin has recorded gains over the past 24 hours. The top cryptocurrency by market capitalization breached the $28,500 level, gaining 2% on Wednesday.
Still, BTC is around 60% below the all-time high of $69,000.
Lyn Alden of Lyn Alden Investment Strategy believes it may be a good time to hold Bitcoin. The macroeconomics and investment strategist said, “I recommend holding actual Bitcoin for those who want exposure to it and learn how to take care of it themselves.”
Alden pointed out that in light of the recent banking and liquidity problems, many people around the world are turning to Bitcoin. She said that is because of its self-custodial asset with a finite supply that can be sent directly between peers without relying on centralized third parties as custodians.
She added,
“Most calculations suggest it is in a value zone at the moment with good 3-5 year return potential, but only for investors who are careful with their position size and are able to absorb the inevitable volatility that comes with it.”
Banking crisis and currency wars
Billionaire Bill Ackman warned that the US economy is “heading towards a train wreck” after the last interest rate increase.
Meanwhile, Trump is not the only one targeting the dollar. China, Russia and their allies are reportedly developing plans for their own currency blocs. This could further undermine the position of the US dollar. Additionally, China’s promotion of a digital yuan could be a boon for Bitcoin, especially if the US loses its ability to impose sanctions.
Chatter suggested last year that China’s Communist Party may even implement an expiration system, which would involve removing currency from the bank accounts of users who have not used it within a certain period specified by the government. If some more controls are imposed on central bank-backed currencies, it could benefit Bitcoin.
Former Coinbase CTO Balaji Srinivasan caught the crypto community’s attention last month when he bet $2 million on BTC reaching $1 million by June.
Rajagopal Menon, vice president of crypto exchange WazirX, told BeInCrypto that Srinivasan’s prediction is based on his belief that the value of the US dollar is rapidly declining. This could theoretically lead to hyperinflation, and Bitcoin could be a hedge against this inflation.
While experts disagree on its price, for many Bitcoin remains a common alternative to currencies during economic downturns.
Disclaimer
In accordance with the guidelines of the Trust Project, BeInCrypto is committed to objective, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify the facts independently and consult with a professional before making any decisions based on this content.
