Nobody wants US dollars. But they want Bitcoin even less.
This is a pretty stark break from the narrative we’ve been sold about BTC being “digital gold” or some kind of alternative “reserve currency” that can’t be debased.
Indeed, markets are consumed by a global fiat debasement trade at the moment, yet BTC keeps falling.
What gives?
We could conclude that BTC was never a store of value, and we’ve been sold a lie. That’s probably true.
It is underlined by today’s chase for real assets, which has precious metals going bananas. Charlie McElligott at Nomura describes it nicely.
Kind of a tired and grinding week thus far….but THE central theme which continues to hold the overall zeitgeist continues to press-on, as President Trump earlier this week explicitly endorsed further “Weak Dollar” beggar-thy-neighbor competitive devaluation policy in his “Run It Hot” economic pursuit to (hypothetically) 1) unwind “USD Exhorbitant Privilege,” 2) boost Exports / suppress Imports and 3) “Inflate Away” debt / reduce service costs…as benefits-shift deeper towards “Asset-holders” vs ongoing meltdown for “Fiat-savers”(trust, me, it’s not just the USD that has issues, as Gold destroys ALL in it’s wake as THE true “Reserve Currency Alternative” now +28% YTD…while precious Metals in general go nuts, with Silver +64%, Platinum +33% and Palladium +27%, yet as base metals party too: Copper, Aluminum, Zinc allseeing nice runs).
As a meaningful tie-in to the above Real-Assets mention, the US “Going It Alone” on repositioning itself for a future state of the World where “Power = Commodities Security,”requiring direct ownership and strong-armed access to your own resources and supply of “things that matter”: Precious / Base Metals, Energy, Semiconductors, Memory / Storage / Rare-Earths.
So despite the “stuck” nature of USD Rates refusing to cooperate and move lower while instead bear-steepening as UST Duration finds few friends, US Financial Conditions continue “easier” nonetheless and Risky Assets continue to inflate = Commodities RAGE, thanks in part to said “Real over Fiat” realignment then paired with the Trump Admin’s “Power = Commodities Security” plus his endorsement of “Run It Hot” / “Weak Dollar” policy feeding the moves, which is really a function of the capitulation into Fiscal Profligacy and perpetually larger Deficit Spending, which now easily dominates “Still Pretty Easy” Monpol, and with the consensually assumed view that the Trump Fed will tilt even “easier” in the period ahead.
Let’s add two more facts to this. The surge in AI is hardly going to reduce digital penetration in our economic lives. And the dominance of a very pro-crypto POTUS that has endeavoured to make a fortune off it himself.
Thus, today’s context should be listed in the crypto salesman’s almanac as the perfect scenario for a BTC blast-off to make gold look like lead. Yet it is going backwards.
This exposes the truth about crypto: it is a sham real asset, a reserve currency for the Mob and not much else. It plays no role in real-world sovereign hard power.
When push comes to shove, nations want stuff, not digital foppery. Stuff they can feed their people with. Stuff that they can build with. Stuff they can shoot at each other.
This is BTC’s ultimate problem. It is vapid and has no monopoly on violence.
It has no hard power.
