In his latest analysis, cryptocurrency analyst Simeon Koch focused on the strategic importance of Bitcoin for the US economic and geopolitical future.
According to Koch, Bitcoin has become indispensable not only for individual investors but also for the US government.
Koch examined the dramatic changes in Donald Trump’s attitude towards Bitcoin. Trump, who described Bitcoin in 2019 as a “valuable bubble,” signed an order at the White House, where Bitcoin declared its “Strategic National Reserve” after reelection in 2024.
Koch argues that the change is not random and is part of a deliberate plan. The economic part of this plan is for Trump’s family to run a crypto fund, invest in Bitcoin mining, and create millions of members of their own. But that’s not a real problem, Koch says.
Along with Trump, BlackRock CEO Larry Fink, the world’s largest asset manager, has also completely changed his view on Bitcoin over the years. Fink once described Bitcoin as a “money laundering index,” but by 2023 he began to describe it as a “financial revolution.”
Koch says these changes in attitudes are not about personal interests, but rather an effort to maintain US economic leadership. The global hegemony of the United States is based on three pillars. The dollar is the global reserve currency, and is a technical leadership in high demand for US bonds. The Bitcoin and crypto markets have the ability to play a strategic role in all three areas.
Since 2020, US government debt has increased from $23 trillion to $36 trillion, while money supply has increased from $1.8 trillion to $2.4 trillion. Koch says that this level of debt would have made other countries bankrupt long ago, but the US was able to carry the burden thanks to its global position in the dollar.
This is where the crypto market appears. StablecoinMarket is a huge liquidity pool, about $250 billion in size. A large issuer is like bringing most reserves back together with US Treasury bonds. This will make the crypto sector play a key role in indirect funding for US debt.
Citing Standard Chartered’s analysis, Koch argues that the Stablecoin market could reach $2 trillion by 2028.
According to Simeon Koch, Bitcoin and Crypto markets are not only investment tools in general, but also lifelines for sustainability in the US economy. The shift towards cryptocurrency by both political and financial elites is not only due to individual interests, but also to systematic needs.
As a result, Koch says the US needs Bitcoin more than ever before to maintain economic stability and global leadership. “This is no longer an option, it’s a necessary one.”
Just a few years ago, many US authorities saw the growing power of stubcoin issuers in the bond market as a threat to the national budget. However, the photos changed quickly. Today, the crypto industry is supported by a regulatory framework, and of course encourages key players like tethers and circles to grow, provided they are staying true to the US and its dollars.
To strengthen this relationship, a new bill called the “genius law” is currently being debated in the US Congress. According to the bill, Stablecoin issuers should support the US Treasury Department and most of the digital assets they issue.
The idea behind this strategy is clear. The more bonds stubcoin companies buy, the easier the US can fund its budget deficit. At the same time, the fact that these companies have large dollar reserves allows them to pull excess liquidity out of the system, giving the US Federal Reserve more room to stimulate the economy by printing new dollars.
According to Koch, Trump and his team have a clear understanding that the crypto market is not only a “liquidity sponge” for inflation, but also a loyal buyer of US debt. Therefore, the government’s welcoming approach to the crypto market is a natural consequence of this conscious strategy.
According to analysts, Donald Trump’s goal of making the US a global crypto leader fits perfectly into this equation. The stronger the blockchain, the more transactions will be made in US dollars. This means that more dollar reserves will be drawn into the system.
If dollar dominance in the crypto market remains in place, the US could also offset the potential losses in the Petrodler system. For decades, the dominant role of the dollar in oil trading has been the basis of US economic domination. Currently, Crypto may take on that role.
But this new collaboration is a double-edged sword. The crypto market is gaining more traction and demand, increasing US-centric monetary policy and reliance on bonds. According to an analysis by Simeon Koch, Trump’s call to “not sell Bitcoin” comes from a cold-blooded geography calculation, not from a cryptographic belief.
*This is not investment advice.