The euro, gold, and digital assets like Bitcoin now serve as hedges against U.S. political instability and rising national debt.
The U.S. government has shut down again, causing global investors to lose faith in the dollar’s stability.
About $1.2 trillion in federal spending has now been put on hold due to the shutdown affecting a number of vital departments.
Cryptopolitan reported on January 31 that the SEC will only be running with a very limited number of staff until further notice. The announcement means that there will be extremely limited operations at the SEC until further notice. With this, divisions like Corporation Finance, Trading and Markets, and Investment Management are unable to perform routine activities.
Financial experts have shared concerns that the U.S. dollar could lose its supremacy due to its recent instabilities.
The United States is dealing with a partial government shutdown with serious ramifications, freezing more than $1.2 trillion in federal spending. The departments affected include Defense, Treasury, State, and Health and Human Services.
Nigel Green, the CEO of deVere Group, recently noted that the dollar’s supremacy is “cracking.” For decades, the dollar has been the world’s primary reserve currency because it was seen as safe and predictable, but with the government being frequently pushed to the edge of a total collapse, that trust has been eroded.
The U.S. national debt has continued to climb, surpassing $37 trillion in early 2026. Massive debt, coupled with a government that cannot agree on a budget, will cause global reserve managers to look elsewhere.
Central banks across the globe have already been diversifying their holdings. According to recent data, many are trading their dollar reserves for gold and other currencies like the euro or the Japanese yen.
In 2017, Jamie Dimon, the CEO of JPMorgan Chase, called cryptocurrency a “fraud” and then later suggested it was only useful for scammers and money launderers by comparing it to “pet rocks.”
However, JPMorgan recently became the first major bank to issue a U.S. dollar “deposit token” on a public blockchain. Dimon has also admitted that while he may still have personal doubts about Bitcoin as a currency, he acknowledges that “blockchain is real.”
Larry Fink, the CEO of BlackRock, warned in his 2025 annual letter to investors that if the U.S. does not get its debt under control, America risks losing its position as the world’s reserve leader to digital assets. He noted that Bitcoin’s decentralized nature makes it a “flight to quality” during times of high political risk.
The BRICS nations, Brazil, Russia, India, China, South Africa, and newer members like Saudi Arabia and the UAE, have been actively developing their own payment systems to bypass the dollar-based SWIFT network. The aim is to trade without being vulnerable to U.S. sanctions or domestic political issues.
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