The US dollar’s losses in 2020 will not be recouped in the upcoming year that indicates a Bitcoin rally
Bitcoin is holding steady around $ 10,645 as the stock market continues to recover and see gains, especially on wall street, following news that US President Donald Trump is back in the White house.
Bitcoin strengthens its position
Yesterday, Bitcoin managed to reach $ 10,750 after news that trump would be released from the hospital as his condition improved. Although the price of BTC fell slightly after that, the world’s largest cryptocurrency managed to maintain its growth as the stock market moved forward.
While the market followed growing optimism that us lawmakers would agree to a new stimulus to restore the economy after the pandemic, the US currency became softer against riskier assets. On Monday, US house speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin discussed economic assistance in connection with COVID-19, and will continue to work on an agreement on legislation. Masafumi Yamamoto, chief currency strategist at Mizuho Securities, said:
“I think that hopes for stimulating the United States economy are the main driving force. As for Trump’s departure, its impact is not clear, but it is seen as positive for the risk environment, since it entails less concern that the White house will be in complete chaos and will not be able to make decisions.”
The dollar index against six major currencies fell to 93,422, which is a two-week minimum. Although the dollar has risen sharply over the past three months, most currency strategists believe that its strengthening will be short-lived.
While Bitcoin has shown strong signs of correlation with the US stock market, the crypto asset has an inverse correlation with the dollar. Bitcoin has followed the wall street movement, although it has not made significant gains today.
Despite the fact that the us ruble seems to be weakening, this indicates a potential upward trend of the Cue ball.
A recent Bloomberg report indicated that the price of Bitcoin could reach $ 100,000 in 2025. Given the unique final offer of BTC, its price cannot depend on the exchange rate of the fiat asset. Thus, the introduction of the world’s largest cryptocurrency is the main indicator of Bitcoin valuation. The supply of a crypto asset is also decreasing year-on-year, which can also increase its price and demand.
The chances of a dollar collapse and a double-dip recession are high
Economist Stephen roach says the dollar is doomed to collapse, and that the probability of a double-dip recession is more than 50 percent. Bitcoin has long benefited from the weakening of the buck, as it is the predominant global reserve asset.
Stephen roach, the former Chairman of Morgan Stanley Asia, previously predicted back in June 2020 that the dollar could fall 35 percent against foreign currencies.
An expert recently told CNBC that he can foresee a collapse in the dollar by the end of 2021.
The global economic situation is increasingly losing its solid Foundation, threatening to plunge the entire world into crisis chaos. COVID-19, political redistribution of spheres of influence and local armed conflicts that threaten to ignite the fire of the third world war do not contribute to stability.
Everyone is well aware that the world has changed radically, and that the transformation is still ongoing. We can only hope that when it is completed, we will not find ourselves in a future that will be hostile to the common man.