Crypto is US Dollar Supremacy
Joe Robert
Investing For 20+ Years | Managed $150M+ in Real Estate & Crypto | Strategies from millionaires so you can Invest Like the Top 1%
Last week, the market watched a congressional hearing on the crypto industry, with a focus on stablecoin regulations. Having previously witnessed the ludicrous display of the congressional level of knowledge when it comes down to tech (read: “Senator, we run ads”), it is not surprising that the expectations for the crypto hearing were just as low. Surprisingly, what happened last week suggested otherwise.
Members of Congress came to the call prepared, with substantial questions that address both the legitimacy of the crypto industry, as well as asking important questions or concerns that genuinely need to be addressed – a stark difference to the big tech hearing we witnessed a few years ago. Granted, given crypto’s insane growth in the past 24 months, these senators had a good amount of time to learn about the space, and who knows, their pockets might also be aligned.
In this week’s newsletter, we want to outline the extremely smart thesis that the crypto CEOs -who attended the hearing- kept pounding on. The importance of crypto for the US Dollar supremacy. In the increasingly globalized age, countries around the world are starting to conduct trades without using the USD. This is primarily because financial literacy amongst governments around the world has grown and they understand the disadvantages of being slaves to the USD. Additionally, the US has also been printing more dollars without any care in the world, and without facing any real repercussions.
After all, who won't be concerned if this is how your currency performed against the USD since the 2009 financial crisis.
*The above image is the performance of the G20 countries currencies against the USD, with the exception of Turkish Lira because it has devalued so much it won't even fit the chart.
The Flight to Tech
In crypto, the US Dollar is king. The primary denominator being utilized for crypto trading around the world is USD, no matter where both parties are based at. Axie Infinity players in the Philippines look at the AXS/USD rate and retail investors in Turkey are investing in Bitcoin to preserve their purchasing power. Even in the decentralized finance ecosystem, USD stablecoin is king. Market participants around the world want the USD, and almost every notable crypto asset's primary trading pair is with the USD.
Emphasizing this fact and juxtaposing it with the fact that China is being more aggressive with its Digital Yuan, is almost a sure-fire way to get every congressperson onboard, no matter what their party affiliation is. In branding, this is similar to what Apple recently did to Facebook. Promote what is good for your product (privacy = Apple; USD stablecoin = support crypto) and compare it with a negative aspect of your competitor (data breach = Facebook; Chinese Yuan = ignore crypto).
All in all, we’re extremely confident with the future of the crypto market. Market participants have shown how powerful the industry is from successfully stalling a bill to seriously capturing the attention of senators from both aisles.
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