President Donald Trump praised cryptocurrencies, stating they “take a lot of pressure off the dollar.” His remarks occurred on November 5 during the America Business Forum in Miami. Trump contrasted his approach of “ending the war on crypto” with the previous administration’s stance. However, this endorsement exposes a deep paradox between Bitcoin and the dollar, as market data shows a historically inverse correlation.
Trump aims to position the United States as the “bitcoin superpower” and the “crypto capital of the world.” Nonetheless, economic fundamentals reveal an inherent tension in this policy. Bitcoin has shown an inverse correlation of approximately -0.7 with the Dollar Index (DXY). This means a strong U.S. dollar generally suppresses Bitcoin’s price. The Fed’s 2022 tightening cycle is a clear example. The DXY surged to 114 while Bitcoin collapsed below $17,000.
The administration’s backing is not just verbal. Senator Cynthia Lummis called a Strategic Bitcoin Reserve “the only path” to offset the $35 trillion debt. The Treasury is exploring a plan that would start with over 130,000 BTC (valued at $34 billion) from criminal forfeitures. Likewise, Eric Trump has promoted stablecoins to “save the U.S. dollar.”
Can Bitcoin save the dollar if dollar strength weakens it?
The paradox between Bitcoin and the dollar is visible in recent market action. When better-than-expected U.S. jobs data emerged in late September, the DXY soared. Bitcoin, meanwhile, tumbled below $111,000. The pattern repeated on Thursday, when strong services data capped Bitcoin’s recovery (even as it climbed above $103,000). Observers note that BTC behaves like a risk asset. In fact, Turkey’s lira plunged to a record low (42.1 per dollar), driving capital toward the dollar, not cryptocurrencies.
If Trump’s policies strengthen the dollar, they could paradoxically undermine Bitcoin’s appeal. The crypto market attracts capital when investors flee weak fiat currencies, not when traditional money strengthens. Expectations for a December Fed rate cut slipped from 70% to 60%. This keeps the dollar elevated and tests the paradox between Bitcoin and the dollar within the administration’s economic vision.
