Trump Crowns Himself Bitcoin’s Protector—but His Dollar Strategy May Undermine It

U.S. President Donald Trump is calling himself the savior of Bitcoin, who have ended the "war on crypto", which was started by the Biden administration.

In front of the thousands of participants at the Miami America Business Forum, Trump credited his executive orders for dismantling what he described as years of “overregulation and political persecution", which he said left “industry figures under indictment.”

Trump argued that his decision to champion digital assets is one made from an economic strategic point of view, where he believes crypto could be “a relief valve for the American economy.”

He framed the United States as both “the Bitcoin superpower” and “the crypto capital of the world,” while asserting that the nation is leading China “by a lot” in both blockchain and artificial intelligence innovation.

The Bitcoin–Dollar Paradox

While Trump’s pro-crypto rhetoric struck a populist chord, economists highlight a fundamental contradiction in his argument. If Bitcoin truly alleviates the dollar’s global dominance, it could also ironically erode the very strength that underpins America’s financial influence.

Data shows Bitcoin maintains a strong inverse correlation of roughly -0.7 with the U.S. Dollar Index (DXY)—meaning that when the dollar strengthens, Bitcoin tends to weaken.

During the Federal Reserve’s 2022 tightening cycle, the DXY soared to 114, and Bitcoin collapsed from $47,000 to below $17,000. Conversely, the 2020–21 easing cycle saw dollar weakness coincide with Bitcoin’s surge to record highs near $64,000.

Market analysts describe Bitcoin as a high-beta risk asset, thriving in times of abundant liquidity and retreating under tightening conditions. Thus, if Trump’s policies succeed in reducing the pressure on the dollar, it could paradoxically deem Bitcoin’s as redundant and exinguish its appeal.

Academic research supports this tension: Bitcoin and the dollar consistently move out of phase, though less predictably than traditional asset correlations.

America’s Strategic Bitcoin Reserve and Stablecoin Push

Despite this paradox, the Trump administration and its allies are doubling down on crypto integration. Senator Cynthia Lummis has proposed a Strategic Bitcoin Reserve to offset the country’s $35 trillion debt burden, a concept Trump has publicly endorsed. The plan would initially leverage 130,000 BTC—worth around $34 billion and already held through criminal forfeitures—without drawing on new taxpayer funds.

At the same time, Trump’s family members are advocating for stablecoins as a complement to the dollar. Eric Trump has said that World Liberty Financial’s USD1 token could “save the U.S. dollar” by channeling “trillions of dollars from around the world” into American markets.

However, not all lawmakers share this enthusiasm. Critics like Representative Maxine Waters and Senator Elizabeth Warren warn that the GENIUS Act, which established the stablecoin regulatory framework, lacks safeguards to prevent conflicts of interest or profiteering by the president or his associates.

Dollar Strength Keeps Bitcoin in Check

Recent market data reinforces the delicate balance between the dollar and Bitcoin. In late September, stronger-than-expected U.S. jobs data and GDP revisions pushed the DXY to three-week highs, sending Bitcoin below $111,000. A similar trend emerged this week as upbeat payroll and services figures lifted the DXY to a five-month peak, capping Bitcoin’s rebound near $103,000.

Traders describe a cautious “buy the dip, sell the rip” approach, citing persistent dollar dominance and firm Treasury yields. Expectations for a December Fed rate cut have slipped from 70% to 60%, further limiting Bitcoin’s upside momentum.

Globally, the dollar’s magnetism remains undeniable. On November 6, Turkey’s lira plunged to a record ₺42.1 per dollar, marking a 97% decline since 2010 as inflation forces capital flight toward the greenback.

A Policy Paradox in Motion

Trump’s bid to merge crypto nationalism with dollar dominance embodies a fascinating paradox. On one hand, his administration’s crypto-friendly stance could usher in a new era of blockchain innovation and alternative reserves. On the other, the stronger the dollar becomes under his leadership, the less room there is for Bitcoin to thrive as a financial hedge.

If the U.S. manages to dominate dollar-backed stablecoins, crypto could ultimately reinforce the dollar’s global reach rather than compete with it. But if Bitcoin itself gains traction as a reserve alternative, it could slowly dilute the very financial hegemony Trump seeks to preserve.

In the end, Trump’s declaration that crypto “takes pressure off the dollar” may be less an economic truth than a political metaphor—one that reveals the uneasy coexistence of two financial worlds now shaping America’s future.