Bitcoin will be the ultimate winner of the excessive issuance of US dollars: financial turmoil and encryption opportunities in the Trump era
Currently, under the leadership of the Trump administration, a series of US policies are exacerbating the turmoil in global financial markets. The trade tariff war and rising expectations of economic recession have led to a sharp correction in US stocks, and the crypto market has also plunged. However, gold has soared against the trend, breaking through the historical high of $3,150 (while it was only around $2,000 a year ago). StarEx exchange analysts believe that global investors' trust in the US dollar system is wavering - whether it is the risk of US dollar depreciation or the threat of a hard landing of the US economy, they are driving funds into gold, a traditional safe-haven asset.
The dilemma of dollar hegemony: Trump’s “America First” is accelerating the collapse of the system
The market generally believes that Trump's goal is to reshape the global order, and "America First" is his core strategy. He firmly believes that countries around the world are "taking advantage of the United States", so he is willing to endure economic pain and declining public opinion and implement trade protection policies. But ironically, the dollar hegemony itself is the greatest privilege of the United States - the Federal Reserve only needs to start the printing press to exchange the dollar for global goods, services and high-quality assets at almost zero cost, while attracting international capital to return and support its financial market bull market.
However, Trump’s populist logic holds that the United States is at a disadvantage when overseas countries “earn dollars” through trade and then purchase U.S. debt and collect interest.
Trump believes that the relocation of manufacturing has caused unemployment among American workers, and that tariffs must be used to "recapture jobs." But the reality is that the United States cannot maintain the hegemony of the dollar while getting rid of the cost of globalization. Debt crisis: The size of the U.S. national debt has exceeded 36 trillion U.S. dollars, and the weighted average interest rate has reached 3.282%. The high interest rate environment continues to increase fiscal pressure; inflation contradiction: tariffs increase import costs, but want to suppress prices; industrial paradox: high-paid and inefficient labor cannot support the return of low- and medium-end manufacturing industries.
Trump’s radical policies not only failed to solve the problem, but made the situation worse. Even Musk, who took charge of the “American Efficiency Department”, was unable to save the situation and resigned.
The key logic of gold surge vs Bitcoin lag
In the current risk aversion sentiment, gold soared while Bitcoin performed mediocrely, confusing many investors. But looking back at the script of the 2008 financial crisis, we can find a pattern: gold rose immediately after the Fed launched QE (October 2008), because as a non-credit asset, it directly benefited from the flood of liquidity and the expectation of dollar depreciation; the US stock market bottomed out and rebounded about half a year later (after the full implementation of QE in March 2009).
Analysts at StarEx Exchange believe that history is repeating itself this time: short-term safe-haven demand is still being taken up by gold because it has a stronger consensus in the traditional financial system. Bitcoin's digital gold attributes have not yet been fully recognized by mainstream capital, and it will take time for funds to overflow.
The ultimate opportunity for Bitcoin: The ultimate rival of the US dollar printing press, the Federal Reserve has only two options:
Continue to print money: buy U.S. bonds through QE to lower interest rates, but it will lead to further collapse of the U.S. dollar's credit; maintain high interest rates: aggravate the debt crisis and trigger an economic recession.
No matter which option is chosen, the result is that more US dollar liquidity will flow into the market. The scarcity of Bitcoin (upper limit of 21 million) and its anti-censorship characteristics make it a more efficient US dollar hedging tool than gold: borderless liquidity: easier to transfer and store than gold; deflation mechanism: the Federal Reserve cannot issue more BTC; institutionalization process is accelerated: after the spot ETF is approved, the threshold for traditional capital to allocate BTC has been greatly reduced.
StarEx exchange analysts believe that in the short term, market panic may suppress risky assets, but the logic of Bitcoin's rise has nothing to do with US stocks, but only with US dollar liquidity. As recession expectations heat up, the Federal Reserve will sooner or later restart money printing, and the "spillover effect" of capital from gold to Bitcoin will gradually emerge. By the end of 2025, Bitcoin is likely to usher in explosive growth - it is not only a safe-haven asset, but also the ultimate winner in the era of the decline of the US dollar system.
