BRICS Attempt to Dampen the Dollar's Primacy in International Trade Could Give Bitcoin Another Massive Macro Boost

BRICS is a geopolitical alliance of Brazil, Russia, India, China, and South Africa. Iran, Egypt, Ethiopia, and the United Arab Emirates were added to its ranks earlier this year.

Bitcoin could benefit from another major macro boost as the BRICS club attempts to counter the dollar's dominance in international trade.

BRICS is a geopolitical alliance comprising Brazil, Russia, India, China, and South Africa. Earlier this year, the club expanded to include Iran, Egypt, Ethiopia, and the United Arab Emirates.

Collectively, the group generates over one-third of global GDP and is now exploring an alternative international payment system.

This week, delegates from BRICS countries met and agreed to pursue a payment system that would utilize their national currencies in place of the dollar-based Swift.

Although Bitcoin is unlikely to be the currency chosen by BRICS, the cryptocurrency will still benefit, Noelle Acheson noted in her “Crypto is Macro Now” newsletter.

“Bitcoin’s narrative as a hedge against dollar debasement will strengthen, as weaker global demand for dollar-based trade, at a time of increasing supply, should pull the dollar down in relative terms,” Acheson wrote.

Despite their internal conflicts, BRICS nations like China and India share common grievances with the US.

Their opposition to the West on geopolitical and economic issues could propel the club's efforts to create a rival currency to the dollar.

However, the dollar is not expected to lose its status as the world's reserve currency in the near future.

US stocks comprise nearly two-thirds of the global stock market value, and all but two of the world's 10 largest companies by market capitalization are headquartered in the country.

Even Russian President Vladimir Putin acknowledged last week that the time for a common BRICS currency had not yet arrived.

Despite this, the mere perception of such substantial shifts in economic and geopolitical realities could have a positive impact on Bitcoin.

Or, as Acheson puts it, the situation increases demand for hedge assets.

Proponents of Bitcoin frequently assert that the digital asset can serve as a hedge against uncertainty, despite its erratic price movements.

They have made similar arguments for Bitcoin being a hedge against inflation due to its scarcity and perceived independence from mainstream markets.

Recently, some proponents have supported this claim by stating that the rising debt burden, resulting from monetary policy measures to curb inflation in the US, has enhanced Bitcoin's profile as a suitable hedge asset.

This week, billionaire investor Paul Tudor Jones expressed concerns about the US national debt, which is nearly equal to the country's gross domestic product.

Jones stated that, in the current economic climate, assets such as gold and Bitcoin are a better investment strategy than bonds.

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