Bitcoin will finally obtain its letters of nobility. Here are the top 4 good news that the Trump presidency has in store for us.
Bitcoin vs Dollar
Donald Trump knows that the dollar is the cornerstone of American power. The liquidity of Treasury bills makes them the preferred reserve asset for exporting nations. This so-called “petrodollar” system allows the United States to run a juicy trade deficit without suffering from a devaluation of its currency.
In other words, the petrodollar allows Americans to exchange oil, metals, rare earths, foodstuffs, etc., for IOUs. This is the exorbitant privilege that BRICS seeks to end.
The economic protectionism promised by Trump suggests that trade agreements will tighten as the BRICS distance themselves from the dollar. However, a global reserve currency cannot be decreed, even for the BRICS.
Bitcoin therefore arrives at the right time with an irreplaceable asset: its finite monetary mass of 21 million BTC. It is also a stateless currency that no nation can confiscate. These two technological breakthroughs predestined it to become an international reserve currency.
“If elected, my government will retain 100% of all bitcoin that the U.S. government currently owns or acquires in the future”launched Donald Trump at the bitcoin conference in Nashville last July.
He also stated that “it is current government policy that threatens the dollar, not bitcoin.”
Faced with the inevitable erosion of the use of the dollar in the world, acquiring a “strategic reserve of bitcoins” before anyone else could prove to be a poker move worthy of the petrodollar.
Here is a recent report written by the Bitcoin Policy Institute detailing why the United States would do well to embrace bitcoin as an international reserve currency.
Bitcoin Mining
The geopolitical balance of power in the 21st century is fundamentally a competition between global technological networks. The United States has dominated for decades with the internet, GPS, Microsoft, Facebook, etc.
The dollar and the SWIFT network are two other important examples of this control. Unfortunately, large-scale financial sanctions (freezing of Russian foreign exchange reserves and disconnection of SWIFT) will necessarily lead to the emergence of alternative networks and stores of value.
Nations refusing to align themselves with US imperialist foreign policy have taken note of the freezing of Russian reserves. China or even Saudi Arabia do not want to lose several hundred billion dollars overnight.
Hence the bitcoin solution which is a payment network at the same time as a reserve currency. Two-in-one. However, nations that do not have their own bitcoin miners become dependent on the rest of the world to carry out their transactions. Donald Trump understands this. “I want all remaining bitcoins to be mined in the United States”he said.
Will China take note of this, having stopped placing its surpluses in American debt:
– She withdraws from American bonds
– She buys more gold.
This shows China's clear strategy to reduce its exposure to the US dollar. But for now, China is still shunning bitcoin. »
Bitcoin also makes it possible to avoid wasting surplus renewable energy. This financial windfall helps energy companies finance the energy transition as well as stabilize the electricity network since miners can interrupt their operations on request.
It is time for the old continent to realize that the Bitcoin industry has many virtues. Deutsche Telekom, Europe's largest telecommunications provider, has just announced that it is launching bitcoin mining to exploit its surplus renewable energy. And EDF?
Legal tender?
Bitcoin is legal tender in El Salvador. Everyone can pay in BTC without having to worry about calculating and paying capital gains tax. And what could be more normal for a currency?
Senator Cynthia Lummis – who drafted a bill aimed at creating a federal strategic reserve of one million bitcoins – intends to remove taxation on BTC purchases below a certain amount.
The end of this tax is eagerly awaited. Maybe Donald Trump will abolish it. This would be in line with his intention to reduce taxes. This scenario is so long awaited that even Michael Saylor was fooled by recent fake news along these lines.
Bitcoin is no longer the scarecrow once feared by bankers. The latter have understood that it is not a threat to the fiat system. Bitcoin certainly has the advantage of existing in limited quantities, but fiat currency has the advantage of being created ex nihilo.
The credit tool is essential. A complex society needs it to finance nuclear power plants, railway networks, high voltage lines, and all other very capital-intensive infrastructures which are amortized over the long term.
The other reason for optimism is that Vice President James David Vance has between $250,000 and $500,000 in bitcoins. Elon Musk – a fervent supporter of Trump – holds several tens of thousands of BTC via his companies Tesla and Space X.
There is therefore no doubt that the billionaire will push for banks to be able to accept bitcoin as collateral in order to borrow dollars. According to Michael Saylor, this banking service will be the driving force behind the next Bull Run by attracting the treasurers of all multinationals.
Bitcoin Strategy
The arrival of a pro-bitcoin president at the White House will lift the anathema on bitcoin. This favorable political context combined with the BlackRock ETF should encourage large multinationals to take the plunge by embracing Michael Saylor's “Bitcoin Strategy”.
Microstrategy plans to raise the immense sum of $42 billion to further increase its treasury, which already reaches more than 200,000 BTC ($15 billion).
Microsoft could be the next giant after Tesla to use bitcoin as a treasury asset. A shareholder vote will take place on December 9 to decide whether to invest part of the $75 billion that Microsoft holds in cash.
The action of Microsoft is up just 10% since the start of the year, compared to 70% for bitcoin. For comparison, that of Microstrategy has progressed by more than 800% since the firm adopted the bitcoin strategy (2020). Even NVIDIA doesn't do better.
It is likely that many CEOs of the S&P500 500 multinationals will very soon imitate the strategy of Microstrategy, Tesla and potentially Microsoft. Smaller firms like Metaplanet and Semler Scientific have already taken the plunge.
The new record of $75,000 for BTC confirms if necessary that a pro-bitcoin presidency should greatly accelerate things for bitcoin. HODL!
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