Trump praised Bitcoin and cryptocurrencies in a Friday press conference and said Bitcoin may help relieve pressure on the US dollar.
United States President Donald Trump recently touted the positive impacts of Bitcoin (BTC) on the US economy, including relieving “pressure” from the US dollar during Friday’s White House press conference.
The President said that he is a fan of the crypto industry, which has grown into a sector that cannot be ignored due to geostrategic competition. Trump added:
“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.”
Digital asset researcher Anders X suggested that Trump’s comments were a reference to the Triffin Dilemma, or the conflict of interest between being the issuer of the global reserve currency, maintaining proper trade balances, and ensuring the long-term value of the currency.
As the issuer of the global reserve currency, the US must run persistent trade deficits to meet the global demand for dollars so foreign countries can settle trade and use the dollar as a store of value against more rapidly depreciating local fiat currencies.
This provides a short-term solution to meet global liquidity demands at the cost of the long-term value of the currency, as persistent trade deficits are financed through money creation, which dilutes the value of the US dollar.
Trump previously floated the idea of paying off the national debt with Bitcoin, a nod to the asymmetry between the inflationary dollar and the supply-capped asset.
However, critics have said that even if the US Treasury owned the entire BTC supply, it would still not be enough to cover the $37 trillion and growing US government debt, which will only continue to grow, eventually collapsing the value of the dollar.
Related: Trump sidesteps question on crypto divesting to pass key bills
“Nothing stops this train,” deficits and total debt to climb, analysts say
Macroeconomist and Bitcoin advocate Lyn Alden coined the phrase “nothing stops this train” — a reference to the extreme likelihood that global governments will never stop printing money and destroying the future value of their national currencies.
The dollar currency index (DXY), a metric that tracks the strength of the US dollar against a basket of major fiat currencies, hit its lowest level in three years on Thursday.
Declining dollar strength comes amid elevated US government bond yields, a signal of deteriorating investor confidence in the creditworthiness of the US government and the sustainability of its debt.
Magazine: TradFi fans ignored Lyn Alden’s BTC tip — Now she says it’ll hit 7 figures: X Hall of Flame
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
