About 10 years ago, when Bitcoin started to emerge in the broader tech community, several folks started to think that blockchains themselves were more interesting and useful than Bitcoin. What these people missed at the time that the blockchains need a native asset to ensure their security. Blockchains like Bitcoin, but also Ethereum are secured, as much by cryptography as they are by economic incentives. A blockchain without a native asset has an “external” dependency which can be vulnerable and destabilize it.
For pretty much its entire existence the crypto community has been vocal about the end of the dollar dominance. The main argument is that for centuries, every empire had its own money and “imposed” it to the world as the reserve currency but, for various reasons, these currencies eventually collapsed and gave way to the next. That’s true of the romans, all the way to the US in the XXth centuries, through Venetian ducats, the French Franc and the British Pounds. Many of the so-called Bitcoin-maxi believed that crypto-currencies would replace the dollar.
What’s interesting is that the idea that we’re nearing the end of the dollar dominance has recently crossed a chasm and what was barely a rumor is now discussed openly on podcasts like NPR ’s Planet Money, by The New York Times Ezra Klein, and of course by institutions like J.P. Morgan which published their research in the fall of 2024.
Saying that the dollar is losing some of its dominance (or that the world is de-dollarizing) is one thing, saying that Bitcoin will replace it is another thing, but one can’t fail to notice that Bitcoin back above $100,000 at the same time that the new US administration has been actively pushing for the fall of the $: “liberation day” saw the rare drop in both stock and bond markets, hinting at the fact that investors are not just selling either, but dropping their shared pricing instrument: the dollar.
The most recent price hikes are, like always, the result of speculation, but that speculation is fueled by companies following the steps of Microstrategy and the likes, but also the efforts by several US states to consider Bitcoin reserves.
The technology itself does not seem to be relevant in any of these technologies, it’s only the money-ness of bitcoin that matters: the 21M cap, the infinite divisibility, and of course, the lack of government and central-bank to control it.