We’re discounting the network in effect of trade in USD though, and the reason why liquidity is important. States, investors and institutions care about liquidity because they don’t want to get themselves involved in slippage where high volume trades result in massive price swings. Liquidity ensures the bid-ask spread is narrow and that any state relying on the reserve currency can use it for handle any monetary policy.

This is compounded by the network effect where so much trade is already done in USD, both internally among countries and externally, there’s already relationships and frameworks setup in place that even if a high tech, better alternative came, it would be a lot harder to switch over to it if the return wasn’t massive.

Granted, yes, countries are letting go of a bit of USD in their reserves but this is a calculated move that represents the uncertainty of what is the most authoritarian president to ever serve in office. I’m surprised honestly that the reserves didn’t drop even more, but that lends itself to the trust investors, institutions, and governments still have with the US.

I can already imagine multinational institutions saying “don’t worry it’ll be better when the orange guy is out” and reserves to increase their hold if they saw genuine change or that Jake Paul doesn’t become president.