Cryptocurrency analyst Simeon Koch, in his latest analysis, drew attention to the strategic importance of Bitcoin for the economic and geopolitical future of the United States.
According to Koch, Bitcoin has become indispensable not only for individual investors but also for the US government.
Koch examined Donald Trump’s drastic change in attitude towards Bitcoin. Describing Bitcoin as a “valueless bubble” in 2019, Trump signed a decree in the White House declaring Bitcoin a “strategic state reserve” after his re-election in 2024.
Koch argues that this change is not random but part of a deliberate plan. The economic part of this plan is that Trump’s family runs a crypto fund, invests in Bitcoin mining and makes millions with their own memecoins. But that’s not the real issue, Koch says.
Alongside Trump, Larry Fink, CEO of BlackRock, the world’s largest asset manager, has also completely changed his view on Bitcoin over the years. While Fink once described Bitcoin as a “money laundering index,” he began to describe it as a “financial revolution” by 2023.
Koch says that these changes in attitude are not so much about personal gain but rather an effort to maintain the US’s economic leadership. The US’s global supremacy is based on three pillars: the dollar being the global reserve currency, the high demand for US bonds and technological leadership. Bitcoin and crypto markets have the capacity to play a strategic role in all three of these areas.
Since 2020, the US government debt has increased from $23 trillion to $36 trillion, while the money supply has increased from $1.8 trillion to $2.4 trillion. Koch says that this level of debt would have long ago bankrupted any other country, but the US has been able to carry the burden thanks to the dollar’s global position.
This is where the crypto market comes in. The stablecoin market is a huge liquidity pool with a size of around $250 billion. Large issuers like Tether back most of their reserves with US Treasury bonds. This gives the crypto sector an important role in indirect financing of US debt.
Citing Standard Chartered’s analysis, Koch argues that the stablecoin market could reach $2 trillion by 2028, in which case stablecoin issuers alone would own 15% of U.S. bonds.
According to Simeon Koch, Bitcoin and crypto markets in general have become not only an investment tool, but also a lifeline for the sustainability of the US economy. The shift towards crypto by both political and financial elites is not only due to individual interests, but also systemic needs.
As a result, Koch says the U.S. needs Bitcoin more than ever to maintain its economic stability and global leadership: “This is no longer an option, it’s a necessity.”
Just a few years ago, many US officials viewed the growing power of stablecoin issuers in the bond market as a threat to the national budget. But the picture has quickly changed. Today, the crypto industry is supported by regulatory frameworks and encouraged to grow, provided, of course, that major players like Tether and Circle remain loyal to the US and its dollar.
To strengthen this connection, a new bill called the “GENIUS Act” is currently being discussed in the US Congress. According to the bill, stablecoin issuers will be required to back the majority of the digital assets they issue with US Treasury bonds.
The idea behind this strategy is clear: The more bonds stablecoin companies buy, the more easily the US can finance its budget deficit. At the same time, the fact that these companies hold large amounts of dollar reserves allows excess liquidity to be drawn out of the system, giving the US Federal Reserve more leeway 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” against 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 the analyst, Donald Trump’s goal of making the US a global crypto leader also fits perfectly with this equation. The stronger the blockchain, the more transactions are made in US dollars. This means more dollar reserves are drawn into the system.
If the dollar’s dominance in the crypto market is maintained, the US could also offset potential losses in the petrodollar system. For decades, the dollar’s dominant role in oil trading has been a cornerstone of US economic dominance. Now, crypto has the potential to take on that role.
But this new collaboration is a double-edged sword: the crypto market is both gaining more traction and demand, and increasing its reliance on US-centric monetary policies and bonds. According to Simeon Koch’s analysis, Trump’s call to “never sell your Bitcoin” stems not from a crypto belief, but from a cold-blooded geostrategic calculation.
*This is not investment advice.
