Bitcoin is the new oil
In a recent podcast discussing Donald Trump's thesis that "Bitcoin is the new oil," a potential strategy for the U.S. to strengthen the dollar through digital assets is revealed. More details can be found in Natalie Brunell's podcast.
Why is Bitcoin "oil"?
Trump compares Bitcoin to oil not because of the extraction method, but due to the possibility of inflating its value. Just as oil became the foundation of the global economy and dollar dominance in the 1970s, cryptocurrencies could become a new platform for maintaining the influence of the dollar.
The digital market as a new pillar of the dollar
In 2022, the U.S. froze $300 billion of Russian reserves, significantly undermining trust in the dollar as a savings instrument. Trump may intend to restore this trust through the development of stablecoin infrastructure.
The idea is simple: create a global digital market where asset trading occurs in dollars. By easing regulation and digitizing access, stablecoins like USDT and USDC could become a new form of holding U.S. government debt.
For developing countries, this solution appears to be a way out:
- An African entrepreneur can preserve capital in stablecoins, avoiding local risks.
- Residents of high-inflation countries, such as Turkey, can invest in dollars through crypto, bypassing the banking system.
How is this related to recent appointments?
- Donald Trump appointed Howard Lutnick, head of Cantor Fitzgerald, as Minister of Economic Development. This company manages Tether's reserves.
- Tether ceased issuing stablecoins in euros (EURT), focusing on the dollar.
- Lutnick purchased a stake in Tether at a discounted valuation, hinting at a close connection with the administration's new plan.
Trump's strategy is to democratize access to the U.S. financial market through technology. Digitization has the potential to turn American stocks, dollar stability, and even Bitcoin growth into everyday tools for millions of users worldwide.
The crypto-economy will become the foundation for a new wave of dollarization, with stablecoins as its main driver.