Trump's Bitcoin Strategic Reserve Proposal Will Chip Away Dollar's Status, Warns Expert: 'Money Is More Than Just Green Paper With The Faces Of Dead Presidents'

The CEO of Investment Management Associates, Vitaliy Katsenelson, has voiced his concerns over former President Donald Trump‘s idea of a Bitcoin BTC/USD strategic reserve.

What Happened: Trump had previously expressed his aspiration for the U.S. to become a “Bitcoin superpower” and suggested the establishment of a Bitcoin strategic reserve. Katsenelson, however, cautions in his op-ed in Financial Times that such a move could potentially harm the U.S. economy.

Katsenelson argues that the promotion of Bitcoin by the White House could potentially weaken the status of the dollar, particularly at a time when faith in the currency is faltering.

“Money is more than just green paper with the faces of dead presidents,” Katsenelson said, adding that it is a reflection of a nation’s economic output and a narrative that society believes in.

He further elaborated that escalating debt is adversely affecting the U.S. dollar’s status as the world’s reserve currency. Katsenelson fears that Trump’s proposal could legitimize Bitcoin, strengthening its case as a reserve currency, and further undermining confidence in the dollar.

Katsenelson concludes by stating that the U.S. president and presidential candidates should be the biggest advocates for the dollar, rather than endorsing an alternative like Bitcoin.

See Also: Bitcoin, Ethereum, Dogecoin Enter The Weekend Wrapped In Red: ‘$60,000 Is The Level To Reclaim, Until Then, Choppy Waters’

Why It Matters: The idea of integrating Bitcoin into the U.S. Exchange Stabilization Fund (ESF) as a strategic reserve was first suggested by Satoshi Act Fund CEO and Co-Founder, Dennis Porter. Trump’s proposal to retain all Bitcoin currently held or acquired by the U.S. government in the future was later announced at a crypto convention. This move could potentially boost Bitcoin’s price, but it would also expose investors if the government decides to sell.

Trump’s support for cryptocurrencies was further highlighted in a recent interview, where he criticized the U.S. government’s decision to sell Bitcoin and called for the U.S. to build its cryptocurrency reserves. He compared the importance of cryptocurrency to artificial intelligence, emphasizing the need for the country to remain competitive in the global market.

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This story was generated using Benzinga Neuro and edited by Pooja Rajkumari