The Trade War is Bullish For Bitcoin

The Trade War is Bullish For Bitcoin

On June 16, 2009, four of the most powerful men in the world met in Yekaterinburg, Russia.

The topic of the meeting: Dethroning the U.S dollar.

Regardless of what you’ve heard or seen in the mainstream financial media about trade imbalances, the U.S. dollar still dominates global trade.

It’s on one side of almost 90% of global forex (foreign exchange) transactions, according to Bank of International Settlements Data. That dominance as a settlement currency in global trade gives the United States control over the world's financial system.

The four men who met in Yekaterinburg knew this reality. And for years, they’d been chafing under a global trade regime that forces them to hold U.S. dollars in reserve.

That’s why Luiz Inácio Lula da Silva, Dmitri Medvedev, Manmohan Singh, and Hu Jintao decided to join forces during that fateful meeting in Yekaterinburg in June 2009.

At the time, they were the leaders of Brazil, Russia, India, and China, respectively – the so-called BRIC nations. (South Africa joined in 2010, making it BRICS.)

Combined, the BRICS account for 40% of the global population… Produce about 24% of world GDP… And hold 40% of gold and hard currency reserves.

Many expected a geopolitical bloc of that size would stand as a bulwark against the mighty dollar. It just needed an alternate global currency to settle trades.

After more than 10 years, it hasn’t.

Why not? It boils down to trust.

Brazil doesn’t want to settle trades in Russian rubles. Russia doesn’t want Indian rupees. India doesn’t want Chinese yuan. And China doesn’t want Brazilian reals.

Meanwhile, the rest of the world has shown no appetite for accepting a basket of BRICS currencies to settle trades.

From their standpoint, the BRICS view U.S. dollar hegemony as a fundamental problem. But they’re putting forward the wrong solutions.

The need for a solution grew even greater on April 2, when President Trump imposed one of the most aggressive global tariff regimes in history. It sent a shockwave across the global economy. And I believe the BRICS will have no choice but turn to an unconventional weapon as a countermeasure: bitcoin.

The “Unconventional” Weapon of Global Trade