China and Russia Turn to Bitcoin (BTC) Reserves to Counter US Influence

At the Token2049 conference, experts discussed the dynamics of the trade war between the United States and China, as well as the potential role of Bitcoin (BTC) as a strategic asset in maintaining the country’s economic strength.

This economic clash, which began with Trump’s tariffs and China’s response, has put immense pressure on both countries to maintain their economic dominance.

In a statement by Zoltan Pozsar, founder and CEO of Ex Uno Plures, he compares China’s position to that of the United States during the Great Depression.

His analysis highlights China’s dependence on export earnings to service its rapidly increasing debt, similar to how the US was dependent on foreign investment during the 1930s.

Trump’s tariffs hit China at its weakest point by reducing exports, which Pozsar believes will ultimately harm China more than Western consumers.

When prices rise, consumers tend to buy fewer goods to save money, whereas the Chinese have limited options to address the economic pressure.

Despite the belief that encouraging domestic consumption would help, it goes against the Communist Party’s ideological framework, making the crisis even more difficult to overcome.

However, Pozsar concludes that both countries have begun to shift their strategies.

The United States is starting to act more like China by using stimulus to fund industrial projects, while China is gradually applying monetary policy directly to consumers, a model commonly used in the West.

This convergence in economic policies may herald a new phase in the US-China rivalry, with both sides employing a hybrid set of tools to maintain their respective economic empires.

As the dust settles on the trade war, the question of how countries will respond to the emergence of Bitcoin (BTC) as a global reserve asset remains a key focus.

With the United States already holding about 1% of the world’s Bitcoin (BTC) supply, Dan Morehead, founder and managing partner at Pantera Capital, sees the rational move as continuing to increase the nation’s Bitcoin (BTC) reserves, similar to how the United States has long held gold.

Following the United States’ landmark move to establish a national Bitcoin (BTC) reserve, Morehead predicts the emergence of a strategic divide among countries, with other nations vying to develop their own national Bitcoin (BTC) reserves.

This is especially true for countries allied with or threatened by the US-led financial system.

Although countries like China remain anti-crypto despite having $18 trillion of Bitcoin (BTC) seized, they may be encouraged to adopt Bitcoin (BTC) reserves if it means gaining an edge over the United States.

A recent report from VanEck reveals that China and Russia have completed certain energy transactions using Bitcoin (BTC) in an attempt to move away from the United States dollar-dominated financial system.

This signifies a significant strategic shift in global financial dynamics, emphasizing the role of Bitcoin (BTC) as a tool for international transactions in the face of geopolitical pressure.

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