Trump, Tariffs & The Dollar’s Fate: Lyn Alden’s Macro Predictions for 2025
The 2024 U.S. election has reshaped the macro landscape, and few understand its implications better than Lyn Alden. She joins Bankless to discuss the impact of Trump’s policies on the dollar, Bitcoin, and global markets. From fiscal dominance and trade wars to the possibility of a new Plaza Accord and the role of Bitcoin in sovereign reserves, this episode covers the key macro trends that will shape 2025 and beyond. Will Trump’s economic agenda lead to a weaker dollar and lower interest rates? What does it mean for Bitcoin and risk assets? Tune in to find out.
Trump, Bitcoin & The Dollar’s Fate: Lyn Alden’s Macro Predictions for 2025
As the world digests the economic shifts brought on by Trump’s return to the White House, investors are scrambling to understand the macro landscape ahead. Will the dollar remain strong, or is a structural weakening on the horizon? Can Bitcoin emerge as a legitimate reserve asset for sovereign nations? And what role does fiscal dominance play in shaping markets?
In a must-listen episode of Bankless, Lyn Alden breaks down the key forces at play in 2025.
The Age of Fiscal Dominance
The era of central bank dominance is fading, replaced by fiscal dominance—where government spending and deficits hold more sway over markets than the Fed. Lyn Alden explains that Trump’s economic team is laser-focused on reshaping trade policy, reducing the trade deficit, and using tariffs as a primary weapon. The administration’s initial moves—threatening Canada, Mexico, and China with heavy tariffs—suggest an aggressive stance that could redefine global trade flows.
But here’s the catch: Trump wants to keep the dollar as the world’s reserve currency while also reducing the trade deficit—two opposing goals. The U.S. needs to run deficits to supply the world with dollars, and breaking that cycle could create unintended consequences.
Will We See a ‘Mar-a-Lago Accord’?
Alden raises the possibility of a Plaza Accord 2.0, or what she jokingly calls a Mar-a-Lago Accord. The original Plaza Accord was a 1985 agreement among world powers to intentionally devalue the dollar to make U.S. exports more competitive. If Trump pursues a similar playbook, it could weaken the dollar while maintaining its reserve status—a move that could be bullish for risk assets, including Bitcoin and equities.
Bitcoin’s Growing Geopolitical Role
Beyond traditional markets, Bitcoin is creeping into the macro conversation like never before. The Czech National Bank is considering adding Bitcoin to its reserves, and rumors swirl that some Middle Eastern nations have quietly done the same. Meanwhile, in the U.S., voices in Trump’s circle—including crypto czar David Sacks—are exploring the idea of a Bitcoin stockpile for the U.S. Treasury.
Lyn Alden explains how the Russia-Ukraine war, and the subsequent freezing of Russian reserves, made many nations rethink their reliance on the dollar. Gold has been the primary beneficiary so far, but Bitcoin’s neutrality and scarcity make it an increasingly attractive asset for countries looking to hedge against dollar weaponization.
Where Do Markets Go From Here?
The macro backdrop suggests a volatile but ultimately bullish outlook for risk assets. Alden highlights a key liquidity event: the depletion of the Fed’s reverse repo facility. Over the past two years, the Treasury’s issuance of short-term T-bills has counteracted the Fed’s quantitative tightening (QT), effectively keeping liquidity intact. But now, that buffer is running dry, setting up a potential shift toward looser monetary policy later in 2025.
For crypto investors, this could be a defining moment. If Trump’s policies successfully push for a weaker dollar and lower interest rates, Bitcoin and equities could benefit. However, if inflation spikes due to tariffs and fiscal spending, the Fed may be forced to keep rates higher for longer—creating turbulence along the way.
Final Thoughts
Lyn Alden’s macro perspective offers a sobering yet optimistic take on the path ahead. Trump’s economic policies are ambitious, but their success hinges on delicate trade-offs—especially between maintaining dollar dominance and reviving domestic manufacturing. Meanwhile, Bitcoin continues to gain traction in global finance, inching closer to institutional and sovereign adoption.
The next 12 months will be pivotal. Will Trump’s economic strategy succeed? Will Bitcoin cement itself as a central bank asset? And can markets handle the shifting tides of fiscal dominance? One thing’s for sure—2025 won’t be boring.
Listen to the full episode of Bankless to hear Lyn Alden’s complete breakdown of these critical macro trends.