It's a very sunny Thursday morning in Brooklyn and it seems like a perfect day to check in on one of the ongoing macro themes that we've been following relatively closely here at the Ƀent for the last year; the potential usurpation of the petrodollar. A man who has been much more thorough in his tracking and documenting of this subject is our boy @arbedout who made us all aware of the European Commission's recent comments which seem to be signaling their intention to attempt to begin pricing their "energy trade" in euros. The angles from which the petrodollar's dominance is being attacked only continue to increase as the rest of the world seems to be becoming more and more unsettled by the friction that is buying oil in today's day and age.
As we can see from @arbedout's tweet from early August, the petrodollar system is completely propped up by the fact that it is the only way countries can buy oil on the international markets. Once that dominance is eroded and other options of payment are made available to the world, we enter a weird territory which we haven't ventured into in quite some time on this planet. I have no idea what the exact repercussions of an overthrowing of petrodollar dominance will look like, but I can guess with pretty high confidence that it's not going to be followed by a prolonged period of low volatility.
The question on a lot of people's minds is, "How will Bitcoin react to this type of event?" Again, I don't know for sure. A lot of the posturing coming from countries that seem to be perturbed by the petrodollars prolonged dominance is coming from the need for an "apolitical currency" that would even the playing field of international commerce. In fact, just today, Russian bad boy Vladimir Putin announced his intention to create a dollar-less payment system for Eurasian countries.
So it seems as if the countries deadset on "economic sovereignty" are probably going to attempt to create some dystopian centralized payment system as a replacement of the incumbent system. Though, it will be interesting to see how the market reacts if there is a clear bifurcation of the dollar's dominance over international oil trade leading to the countries attempting to usurp the petrodollar attempting to replace it with a state-run dystopian payment system while Bitcoin continues to mature. Will the market look at the shit show that will be international currency markets and seek safety in apolitical commodity monies like gold and Bitcoin? Will Bitcoin be ready for the spotlight if the market does decide to flee to safety? Will gold's historical dominance give it a clear advantage over Bitcoin in this scenario? Or is the world primed to continue moving further into the Information Age, adopting a sovereign digital gold and freeing humanity from the unethical fiat system that favors those closest to the spigot of money production? We shall see.
Btw, I really like this Bitcoin take from our good friend Pierre.
Shoutout to Fela Kuti.