Bitcoin And XRP Set To Shine: Shock $8 Trillion Predicted Amid US Dollar ‘Collapse’
09 Oktober 2023 - 11:00PM
NEWSBTC
Despite initial expectations of a robust rally, major
cryptocurrencies Bitcoin (BTC), Ethereum (ETH), and XRP have
encountered a slowdown in momentum following a promising start in
2023. However, a prominent tech company’s leaked disclosure can
alter this trajectory. With the Federal Reserve (Fed) grappling
with a staggering $33 trillion US “debt death spiral,” investment
banking firm Jefferies analysts have warned that the Fed may be
compelled to restart its money printing presses. This move
could trigger the collapse of the US dollar and ignite a
significant price boom for Bitcoin, rivaling the value of gold.
Expert Advocates For Bitcoin As An Inflationary Safeguard A recent
Forbes report indicates that Bitcoin’s highly anticipated halving
event, expected to cause price volatility, is imminent.
Christopher Wood, Jefferies’ global head of equity strategy,
emphasized in a note to clients seen by CNBC that G7 central banks,
including the Federal Reserve, are unlikely to withdraw from
unconventional monetary policies smoothly. Notably, Wood
considers Bitcoin and gold as “critical hedges” against the
resurgence of inflation. Related Reading: Bitcoin Trader Shares The
“Only Chart” You Need To Profit From BTC In 2024 Since spring of
2022, the Federal Reserve embarked on reducing its ballooning
balance sheet of nearly $9 trillion, which expanded significantly
during the COVID-19 pandemic and subsequent economic
downturn. This process, known as quantitative tightening,
involves draining liquidity from the financial system and shifting
the burden of newly issued debt onto the private sector. US Dollar
Caught In ‘Death Spiral’ In addition to balance sheet
reductions, the Fed has implemented rapid interest rate hikes to
rein in soaring inflation. However, this approach has raised
concerns about a potential counterproductive “death spiral” for the
US dollar, potentially bolstering the value of Bitcoin. Wood
suggests that the Fed may be forced to adopt a more accommodating
stance in response to a US recession. This shift would occur due to
a larger-than-usual lag in the Fed’s interest rate hikes aimed at
curbing inflation following the significant expansion of the money
supply in 2020 and 2021. Wood further explains: Such a
failure to exit from unorthodox monetary policy in a benign manner
is likely to culminate in the collapse of the US dollar paper
standard to the benefit of both gold bullion owners and also owners
of Bitcoin. Meanwhile, Bitcoin, along with Ethereum and XRP to a
lesser extent, has witnessed a surge in institutional interest,
driven by the world’s largest asset manager, BlackRock. The
CEO of BlackRock, Larry Fink, who had previously expressed
skepticism towards Bitcoin, made a notable shift in June. Fink’s
endorsement of Bitcoin sparked a rush among Wall Street investors
toward cryptocurrencies. With custodian arrangements in place
for digital assets, Bitcoin has gained credibility as an investable
option for institutional investors, presenting itself as an
alternative store of value to gold. Related Reading: Shiba
Inu-Based BONE Gearing Up For Massive Rally, Here’s Why In
conclusion, the Federal Reserve’s monetary policy challenges and
the growing institutional interest in Bitcoin and other major
cryptocurrencies have created a perfect storm, propelling their
prices to new heights. Per the report, investors increasingly
turn to digital currencies as potential hedges against inflation
and storehouses of value as the US dollar faces uncertainty. When
writing, the leading cryptocurrency in the market is trading at
$27,300, reflecting a decrease of over 2% in the past 24 hours.
This decline follows an overall downtrend in the market since the
beginning of the new trading week. Notwithstanding the recent drop,
BTC is positioned above its critical 50-day and 200-day Moving
Averages (MAs). This favorable positioning may support a rebound in
the cryptocurrency’s value and prevent further decline, helping it
maintain the crucial $27,000 milestone. Featured image from
Shutterstock, chart from TradingView.com
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