Experts: Bitcoin price now critical to US fiscal stability.

Jack Mallers from Strike was quoted in a video posted on X as saying that a stable Bitcoin price will be a key component to US fiscal policy, and that the rise of stablecoins is linked with demand for US debt. The GENIUS Act, the new stablecoin legislation introduced in 2017, is framed as “a seminal moment for digital assets and global dollar dominance,” The Malleables said While the bill “has nothing to do with Bitcoin directly,” According to his opinion, stablecoin growth and Bitcoin appreciation go hand in hand.

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Mallers displayed a graph of Tether’s market capitalization next to Bitcoin’s price. “In the green, what you’re looking at is Tether, Market Cap. And in the orange, what you’re looking at is Bitcoin… The currency pair that does the most volume against this asset class is USDT, is Tether… If you want stablecoins to grow, Bitcoin grows.” Then he connected this relationship with federal funding: Stablecoin issuers (especially Tether) hold large quantities of US Treasuries. Therefore, an increased stablecoin flotation would translate to incremental structural demand in US debt.

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Mallers describes the United States in a fiscally conservative manner “trapped,” asserting: “We know that the US cannot raise rates and they cannot cut spending. So we are trapped. The next logical step is we then need to devalue the dollar. It’s the only way out.” He continued that the policy question is against what assets should we allow our dollar to depreciate. “Do not debase the dollar against housing… Don’t debase the dollar against eggs… My recommendation, debase it against Bitcoin and gold.”

Projecting a scenario in which Bitcoin reaches $500,000—”That’s 5x from here”—Mallers claimed such a move would force stablecoin capitalization to “5x,” Five times more than the demand US debtAt a time when traditional domestic and international buyers have become tired, said he: “China doesn’t want your debt… Hedge funds don’t want your debt. Who’s the buyer of last resort? The Fed.”

He compared the future alignment of Treasury’s financing needs with Federal Reserve’s balance sheet expansion and composition of Stablecoin Reserves to a past historical episode. “The last time the Fed and the US government got married… was to help finance around the world wars. And the Fed’s balance sheet grew 10 times… largely in… T-bills, the things that stablecoins buy.”

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US Debt-to-GDP “at 130%,” Mallers said that to reduce the real value of money, it is necessary for debasement in currency terms to be channeled via politically acceptable inflationary asset prices. He expanded the story into politics by highlighting that “The president and his family just bought $2 billion worth of Bitcoin” Open-ended policy measures such as the opening of a new office “US retirement market to crypto investments.”

Mallers believes that putting Bitcoin and gold in retirement accounts allows policymakers to make better decisions. “debase the dollar and get reelected,” Bitcoin owners would not be able to resist the erosion in purchasing power. “Debase the dollar all you want… I don’t care because I own Bitcoin.”

The bill is a mechanism that he believes will emerge from it. “Stablecoins are the new way to finance the government, but they grow as Bitcoin grows. One way to grow stablecoins is to grow Bitcoin… One way to solve the Fed and the Treasury’s problem of getting remarried is to grow Bitcoin. It could not be more obvious.”

BTC was trading at $118.055 as of press time.

Featured image was created with DALL.E chart by TradingView.com