What to know:
Lyn Alden says a weaker dollar is necessary for the US to stabilize its financial system.
Bitcoin and gold are well-positioned to benefit from de-dollarization.
Sovereign wealth funds and various nations are already increasing their Bitcoin exposure as the dollar’s global dominance starts to wane.
The weakening of the US dollar (DXY) is no longer headline news. With mounting disruptions across the US economy, a declining greenback has become part of the backdrop. Since the start of 2025, the US Dollar Index has dropped 11%, now hovering around levels last seen in April 2022. Markets have largely responded with a shrug. After all, in times of deep restructuring, isn’t some dollar weakness to be expected?
The trouble is, this might not be a temporary dip. The dollar’s slide could reflect a deeper, long-term reconfiguration of both the US economy and the global monetary order. In a May 4 newsletter, independent market analyst Lyn Alden made a compelling case: not only is a weaker dollar likely, but it may be necessary. According to Alden, a controlled retreat from dollar hegemony might be one of the few paths left to stabilize an increasingly fragile system. And if the US relinquishes its role at the center of the monetary universe, the world will need alternatives. Neutral assets like gold and Bitcoin could be well-positioned to take on a more central role.
The US and the dollar are in a “long-term transition”
Fractional reserve banking, the system that fiat money relies on, creates money through lending. Each time a bank issues a loan, it expands the supply of broad money, without necessarily creating enough base money to cover the loan principal and its interest. This means that the current financial system relies on continual credit expansion and refinancing to remain solvent.
Today, the US economy holds around $102 trillion in public and private dollar-denominated debt, with another $18 trillion owed by borrowers outside the US And that’s not even counting derivatives, which would push the total much higher.
Yet only $5.8 trillion in base money actually exists.
“It’s like a game of…..
