CNN highlights US Dollar’s global supremacy erosion
- The USD’s dominance in global trade is facing major challenges amidst the changing geopolitics and developments around the US banking system.
- Many investors are betting that Bitcoin will emerge as the world’s global currency in the future.
Amid the changing dynamics of global geopolitics and the current macro developments in the US financial system, the US dollar faces imminent threats to its eternal hegemony in the global financial world. In the wake of the war between Russia and Ukraine, America’s economic rival China has been working with Russia to push for the use of the Yuan in global trade.
It has also joined with key US allies and oil partners such as Saudi Arabia to bypass the US dollar and make oil purchases directly in Yuan. CNN released a report explaining how the USD’s dominance appears to be on a downward trend recently.
If the US dollar’s global supremacy erodes, America will face a bill like no other.
A surprising segment on CNN.
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— Wall Street Silver (@WallStreetSilv) March 27, 2023
As these important developments unfold in the global financial industry, financial enthusiasts are curious about what will replace the USD. Crypto enthusiasts believe that the USD’s eroding supremacy is likely to give a boost to decentralized digital assets.
As we move towards a multipolar world, many believe that Bitcoin could be the world’s currency in the future. Backed by decentralized blockchain technology, Bitcoin (BTC) facilitates faster cross-border transactions at low cost.
Bitcoin’s role in global finance
Over the past few years, the use of Bitcoin worldwide has accelerated over time. Not only retail players, but large financial institutions and even corporates seek exposure to Bitcoin and maintain BTC reserves.
Although Bitcoin continues to be a highly volatile asset class, it is slowly emerging as a hedge against traditional finance. Bitcoin’s performance against the recent banking crisis in the US and Europe has been a testament to its hedge status.
As the banking crisis unfolded this month and sent jitters across global markets, Bitcoin continued to rally. The Bitcoin (BTC) price is already up more than 70% year-to-date and has outperformed almost every asset class, from stocks to gold. Bitcoin’s resilience during the banking crisis has attracted the attention of investors worldwide.
Although Bitcoin has risen to $28,000, liquidity for the world’s largest crypto has fallen to a 10-month low. Speaking to Bloomberg, Conor Ryder said of Kaiko:
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Liquidity on American stock exchanges and especially USD pairs have been hardest hit thanks to the fear of banks. It looks like a big reason for the recent price rally in BTC was due to illiquidity, when the depth is low there is less support for not only the downside but also the upside as well.
On the other hand, institutional demand for Bitcoin and other cryptocurrencies remains strong. Nasdaq, the 52-year-old exchange operator is awaiting approval from the NYDFS to secure a license to offer custody solutions to crypto clients.
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