In a significant endorsement of cryptocurrency, former US President Donald Trump delivered a powerful message during a speech at Miami’s America Business Forum earlier this week, stating that digital assets could “ease pressure on the dollar.” This statement, made in front of a large audience, positions America not just as a player in the crypto arena but as a potential “bitcoin superpower” and the “crypto capital” of the world.
Trump criticized the previous administration’s approach to the crypto sector, suggesting that his own policies had turned years of regulatory hostility into support for innovation and growth. This remark signifies a notable shift in tone regarding cryptocurrencies, particularly as discussions in Washington continue to evolve.
Tension Between Dollar and Bitcoin
Market observations reveal a longstanding tension between the US dollar and Bitcoin, with analysts noting their price movements often mirror opposing trends. Data indicates that during the Federal Reserve’s rate hikes in 2022, the Dollar Index surged to 114, while Bitcoin’s value plummeted from $47,000 to below $17,000. In contrast, during periods when the dollar weakened in 2020 and 2021, Bitcoin reached new heights, hitting approximately $64,000.
Further analysis reveals that Bitcoin behaves more like a high-risk asset and often rises when liquidity is abundant while decreasing in value when conditions tighten. Academic studies employing wavelet analysis confirm this trend, showing the two assets frequently move out of alignment.
Policy Developments and Strategic Plans
Aligning with Trump’s sentiments, discussions among lawmakers are ramping up, particularly around the proposal for a Strategic Bitcoin Reserve initiated by Senator Cynthia Lummis. This reserve would aim to alleviate the nation’s enormous $35 trillion debt, beginning with about 130,000 BTC already held by the government, valued at nearly $34 billion.
Treasury Secretary Scott Bessent is currently exploring how this reserve could function outside traditional gold valuation metrics. Meanwhile, Eric Trump has been marketing stablecoins, claiming a token from World Liberty Financial could draw in “trillions” to American markets.
However, conflict-of-interest concerns have been raised by lawmakers like Maxine Waters and Elizabeth Warren, particularly regarding the implications of the GENIUS Act, which has left open the door for presidential family involvement in digital asset ventures.
Signs of Market Rejuvenation
As the crypto market moves forward, indicators show a rebound with Bitcoin recently surpassing the $103,000 threshold. Many other cryptocurrencies are also experiencing positive trading trends, with Trump Coin leading the charge after a robust double-digit increase over both daily and 14-day periods.
TRUMP’s price has surged 12% in the past 24 hours and 35% across the last 14 days, although it has seen a slight downturn of 4% over the past week. Currently, TRUMP ranks as the fourth-best performing cryptocurrency, following behind Internet Computer (ICP), Quant (QNT), and Zcash (ZEC).
Trump’s vocal support for the crypto sector includes allowing cryptocurrency donations for his 2024 Presidential campaign, reflective of his ongoing commitment to a strategic digital asset reserve for the nation.
Featured image from Getty Images, chart from TradingView
