The Surge of Bitcoin Over the Dollar
Davos 2026 emerged as a clear signal of the impending challenge that cryptocurrency presents to the established banking system. This backdrop echoes the sentiments of JP Morgan CEO Jamie Dimon, who infamously labeled Bitcoin a “fraud” back in 2017, likening it to pet rocks and implying that its main function is to facilitate scams and money laundering. He is, on the contrary, constructing from a different melody. In early November, JPMorgan made headlines as the first bank to launch a U.S. dollar deposit token on a public blockchain. Dimon began by acknowledging his previous misjudgment regarding Bitcoin… or at the very least, that the “blockchain is real.” JPMorgan has been developing its own blockchain for several years, concentrating on providing services to its institutional clients in ways that usually don’t attract significant mainstream interest. Its latest move, while still aimed at elite, institutional clients, paves the way for significant developments across the crypto landscape. In a recent coffee meeting with former U.K. prime minister Tony Blair, JPMorgan Chase CEO Jamie Dimon didn’t hold back. He interrupted the conversation, directing a pointed finger at Brian Armstrong, CEO of Coinbase, and stated, “You are full of s—,” as reported. Given his previous actions, this could indicate that cryptocurrency and exchanges are likely to remain relevant, while banks may need to accelerate their adaptation in light of increasing tensions. “The anti-dollar trade reflects a global search for policy certainty.” Nigel Green Nigel Green of deVere Group warns that the dollar’s supremacy is cracking, and markets are constructing an escape route. He concludes: “The dollar will remain central to global finance, but its supremacy has been cracking in recent years, and this has been accelerated in recent days, with markets now seemingly building an escape route.”
The ongoing episode may signify a pivotal structural shift. “A multipolar currency world is becoming more plausible.” Investors are increasingly viewing the euro, yen, and certain emerging market currencies as partial safeguards against the risks associated with US policy. “Digital assets also enter strategic discussions at the margin.” The chief executive highlights the magnitude and regularity of fiscal clashes in Washington as a fundamental challenge for the currency. He contends that shutdown threats weaken the view of US assets as the worldwide standard for safety. The ongoing political challenges, highlighted by the current partial shutdown, jeopardize over $1.2 trillion in federal spending. This situation poses a significant threat to funding for key departments, including Defense, Treasury, State, and Health and Human Services. “Repeated shutdown brinkmanship erodes confidence in US governance, and markets are likely to be starting to price political dysfunction into the dollar,” states Nigel Green. “The dollar’s dominance rests on institutional stability, fiscal credibility, and policy predictability.” Shutdown risks undermine all three pillars. He connects the shutdown brinkmanship to wider diversification trends observed among global reserve managers.
For years, central banks have been shifting away from dollar reserves, opting instead for gold and other currencies. Political shocks intensify that trend by bolstering the view of political risk in the US. “Global investors are taking steps to hedge their dollar exposure amid ongoing fiscal confrontations.” He contends that the prevailing landscape prompts capital to explore alternative avenues. “Currency leadership rests on credibility, and credibility erodes when governance looks unstable.” The dollar continues to hold its position as the dominant global reserve currency, but signs of vulnerability are on the rise. “If shutdown brinkmanship becomes even more routine, investors will continue to diversify away from the dollar, and reversing that shift will be difficult”- Nigel Green. The decentralized nature of bitcoin could be attractive in a landscape marked by diminishing U.S. dollar supremacy and an evolving global trade framework. The U.S. dollar has maintained its status as the global reserve currency since the conclusion of World War II.
The dollar’s value is facing a potential turning point as confidence in the U.S. wanes and the deficit continues to balloon. This situation could mark a significant shift for currencies overall. “The U.S. has benefited from the dollar serving as the world’s reserve currency for decades. But that’s not guaranteed to last forever,” BlackRock CEO Larry Fink stated. “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.” ETFTrends reports that a withdrawal from U.S. exposures and the dollar by foreign investors and entities could pave the way for the ascent of other currencies, including bitcoin. As the landscape continues to evolve and uncertainties linger, this is a trend worth monitoring in the upcoming months and years, particularly regarding how banks will respond to potential shifts in currency exchanges.
