The US dollar is currently standing on the precipice of a radical change, a transformation that intends to strip the USD bare of its reserve currency status. The US dollar has been encountering steep fluctuations in its price, with major non-traditional reserve currencies giving stiff competition to the dollar. With Trump’s rising trade war narratives, the US dollar has been suffering the most out of the lot, with new alternatives busy challenging the American currency’s dominance at a rapid pace. Will the US dollar be able to survive this new development? Let’s find out.
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The World Order Is Changing: Will The USD Be Able To Withstand This Change?
It all started with a new statement made by Larry Fink, the CEO of financial giant BlackRock. Fink, in his annual company letter, shared a new analysis, adding how the US dollar could lose its dominance to Bitcoin. This statement made a pivotal impact on the current financial mindset of the world, where BTC seems to be taking the lead over major world assets.
“If the U.S. doesn’t get its debt under control, if deficits keep ballooning, America risks losing that position to digital assets like Bitcoin.” Fink shared
In addition to this, Deutsche Bank had also echoed a similar stance earlier, adding how US dollar dominance is currently in grave jeopardy.
“We do not write this lightly. But the speed and scale of global shifts are so rapid that this needs to be acknowledged as a possibility. It is hard to overestimate the scale of change taking place in global economic and geopolitical relations in a matter of days.” As stated by George Saravelos, the bank’s global head of FX strategy, in a note to clients
The Trump administration has also shown a steadfast approach toward expediting crypto proceedings. Trump has recently announced a crypto reserve with coins like BTC, ETH, XRP, ADA, and SOL included in the lot. The US government is also exploring stablecoins as capable instruments to keep the US dollar’s dominance intact. However, the fact cannot be denied that Bitcoin is now being viewed as digital gold, another safe haven asset that could protect investors from stark USD volatility.
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Another Asset Threatens the American Currency’s Dominance
Apart from Bitcoin, the steady rise of gold is also damaging the US dollar’s prestige in the long haul. Central banks all over the world have lately been diversifying their reserves, hoarding gold aggressively in the process. This demand has spiked XAUs value to new highs, threatening the age-old established world order.
“According to the IMF figures not updated for 2024, central banks’ gold holdings have surged by roughly 200 million troy ounces (6,221 tonnes) from 2006 to 1.16 billion troy ounces, driven largely by China and Russia,” Richter wrote. “The increases in China and Russia alone represent nearly 60% of the total increase since 2006. “ In dollar terms, these gold holdings at today’s price amount to $3.65 trillion.” As stated by Wolf Richter, Kitco writer and Wall Street analyst.
BRICS vs. the Dollar
— Michael A. Gayed, CFA (@leadlagreport) March 27, 2025
BRICS nations want to shake up global trade.
💵 USD’s share in global trade fell from 88% (2010) to 77% (2023) (IMF).
📊 Gold reserves in BRICS nations up 25%.
De-dollarization talk is real, but can they pull it off?
Watch gold & forex reserves… pic.twitter.com/DSDUG308w4
With Trump’s decision to announce further tariffs on April 2nd, the world could again witness sharp dollar volatility if the tariff spree escalates the global trade war narrative. With this, the investor sentiment could continue to favor Bitcoin and gold as safe haven assets, detailing the US dollar further in the process.
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