DeutschThe war in Iran is accelerating concerns about the future of the US dollar. Now Coinbase founder Brian Armstrong is weighing in. He believes that Bitcoin, of all things, could secure dollar dominance. Why he isn’t convinced that the largest crypto coin will replace fiat currency.
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Bitcoin securing dollar dominance? Brian Armstrong’s argument
Will Bitcoin ultimately secure the dominance of the US dollar instead of replacing the fiat currency? Coinbase founder Brian Armstrong recently proposed a theory that the largest cryptocurrency could prove to be a lifesaver for the US dollar.
“Bitcoin acts as a check and balance on inflation. If spending gets too far out of hand, capital flows into Bitcoin,” Armstrong recently wrote on X.
So far, his statement aligns with the broad consensus. However, the Coinbase CEO does not seem convinced that the US dollar will be displaced by Bitcoin. While Bitcoin is a threat to the US currency, he argues that this is precisely why it could ensure its survival.
“Competition is good for customers, and that applies to the money market as well. In this way, Bitcoin will help maintain the dominance of the dollar,” Armstrong continued.
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Armstrong is convinced that US dollar monetary policy will be tightened in the future to prevent the demise of the currency. As long as monetary policy remains out of control, users will migrate to the crypto market—to Bitcoin, for example. The 43-year-old believes this development will then cause a return to strong monetary policy.
Why experts fear the decline of the US dollar
Armstrong’s statement brings a fresh perspective to a months-long debate about the future of the US dollar. Many experts believe that the fiat currency faces a bleak future. CoinPro has reported several times on the predictions of crypto entrepreneur Arthur Hayes.
Hayes argues that US dollar inflation continues to rise drastically, causing the fiat currency to lose large portions of its purchasing power. Bitcoin is one of the main beneficiaries and could therefore rise to a price of one million US dollars in just a few years.
Most recently, US investor Ray Dalio caused a stir. Dalio fears the decline of the US dollar if the United States loses control over oil trade in the Middle East due to the war in Iran.
Such developments could further play into Bitcoin’s hands and accelerate the rise of the cryptocurrency. Armstrong’s assessment that the US Federal Reserve will react well to the new competition represents a novel viewpoint.
Armstrong’s expectation—that exploding US debt will cause a curbing of spending—is met with significant resistance among his readers. Many crypto enthusiasts are expressing skepticism.
A systemic problem with the US dollar remains: the necessary trust. Fiat currencies can be heavily manipulated by their issuers. Cryptocurrencies function trustlessly and according to pre-defined rules. These characteristics play an important role in the decision-making of many users.
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