Yeliz Akmaca 
The relationship between Bitcoin and the US dollar is back in the spotlight. Coinbase CEO Brian Armstrong argues that Bitcoin does not undermine the dollar but instead acts as a system-level balancing force. According to Armstrong, Bitcoin introduces discipline into inflation and fiscal policy debates.
Why Competition Between Bitcoin and the Dollar Matters
Brian Armstrong said in a post on X that Bitcoin creates a form of competition that ultimately benefits the US dollar. Rather than replacing it, Bitcoin introduces an external reference point that pressures policymakers during periods of rising deficits and expanding public debt. In this context, Bitcoin functions as a financial constraint rather than a rival currency.
At the same time, Armstrong emphasized that Bitcoin is not designed to displace the dollar directly. Instead, he believes its existence encourages more responsible fiscal decision-making by adding transparency and long-term accountability to the system.
Meanwhile, the US public debt has surpassed $38 trillion. With the debt-to-GDP ratio now above 120%, the discussion has moved beyond theory. As a result, Bitcoin is increasingly framed within broader macroeconomic fragilities rather than speculative narratives.
Still, Armstrong underlined that a strong US economy remains essential for global stability. He stressed that Bitcoin’s role is complementary, not adversarial, and that healthy competition can reinforce confidence in the dollar over time.
“I love Bitcoin, but a strong America is also critically important for the world,” Armstrong said.
A Structural Shift in the Crypto Market
At the same time, Coinbase Institutional research points to a major transformation in crypto market dynamics. Analysts observe that retail-driven speculation and meme-coin activity are fading. In their place, institutional capital and professional trading infrastructure are taking the lead.
One of the most significant changes is the dominance of perpetual futures on major exchanges. Unlike earlier market cycles, price movements are now shaped less by simple buying and selling and more by leverage, funding rates, and liquidity conditions.
Previously, spot market demand largely dictated price direction. Today, derivatives markets increasingly influence short-term volatility and trend formation. As a result, the crypto market is becoming more sophisticated but also more complex.
Key behavioral shifts include:
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Retail investor influence continues to decline
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Institutional risk management is gaining importance
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Derivatives markets increasingly guide spot prices
Taken together, these trends suggest that the so-called “Wild West” phase of crypto markets is drawing to a close.
GENIUS Act Debate and the Stablecoin Tension
Another major issue raised by Armstrong is the debate surrounding the GENIUS Act. He strongly criticized efforts to reopen the legislation, arguing that traditional banks are lobbying to curb competition from stablecoins and fintech platforms. In his view, such moves would slow innovation rather than improve consumer protection.
Stablecoin yields, in particular, challenge the traditional banking model. While banks earn roughly 4% on reserves held at the Federal Reserve, everyday consumers receive little to no return on standard savings accounts. Armstrong and other industry voices argue that stablecoin rewards help rebalance this disparity in favor of users.
They also note that available research does not indicate widespread deposit flight from smaller banks. Despite safety concerns raised by incumbents, stablecoins have not triggered systemic stress in the banking sector so far.
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