Cash News
Bitcoin
Bitcoin
Subscribe now to Forbes’ CryptoAsset & Blockchain Advisor and “uncover blockchain blockbusters poised for 1,000% plus gains” in the aftermath of bitcoin’s halving earthquake!
The bitcoin price has dropped back from its all-time high of over $70,000 set in March as fears mount over the U.S.’s spiraling $35 trillion debt pile and billionaire Elon Musk warns of U.S. dollar “destruction” that could “bankrupt” the country.
Now, after former president Donald Trump floated a radical plan to wipe out U.S. debt, the U.S. dollar has hit its lowest level since the start of the year, sparking fears of further collapse and potentially feeding a bitcoin price boom.
Sign up now for the free CryptoCodex—A daily five-minute newsletter for traders, investors and the crypto-curious that will get you up to date and keep you ahead of the bitcoin and crypto market bull run
The U.S. dollar has hit its lowest level since the start of the year, sparking fears of further … [+]
“Bitcoin became a trillion-dollar asset during a period in which the dollar was exceptionally strong,” Zach Pandl, managing director of research at bitcoin and crypto asset manager Grayscale, told DL News.
“Do you know what’s going to happen to this asset when we have a period of sustained dollar depreciation,” Pandl asked, suggesting the bitcoin price will surge.
The dollar’s decline in recent months comes as investors are waiting for Federal Reserve chair Jerome Powell to signal the Fed will cut interest rates next month during his closely-watched speech at the Jackson Hole economic symposium meeting of central bankers on Friday.
“The market is looking for a soft [economic] landing and Fed rate cuts … which is negative for the dollar,” Athanasios Vamvakidis, head of G10 foreign exchange strategy at Bank of America, told the Financial Timesadding the dollar is “still overvalued.”
Alongside expected weakness for the U.S. dollar, traders are also betting on continued U.S. spending that will push up the $35 trillion debt pile whether former president and Republican candidate Donald Trump retakes the White House in November or if vice president Kamala Harris wins it for the Democratic Party.
“As the market comes to grips with whatever candidate wins, we’re in for four more years of reckless fiscal policy,” VanEck’s head of crypto research Matthew Sigel, told CNBC. “The history is that bitcoin really hits its stride at that point. So we’re buyers here. We think it recovers.”
Sign up now for CryptoCodex—A free, daily newsletter for the crypto-curious
The bitcoin price has dipped in recent weeks but remains far higher than its lows of 2022.
The bitcoin price rally has this year been largely driven by the long-awaited arrival of a fleet of spot bitcoin exchange-traded funds (ETFs) on Wall Street, with some betting that the continued success of the funds will support the bitcoin price into 2025.
Institutional investors have “bought the dip” over the second quarter of the year, despite a decline in the bitcoin price of 12%, according to a report from asset manager Bitwise, with the company’s chief investment officer, Matt Hougan, calling it a “great sign.”
“If institutions will buy bitcoin when prices are volatile, imagine what could happen in a bull market,” Hougan wrote in the report, adding: “The institutions are coming, and they’re coming in size.”
While bitcoin and the dollar decline, the price of gold has hit a fresh all-time high this week on growing fears of international instability.
“I think what we’re seeing here is that investors don’t yet move into bitcoin during periods of uncertainty,” Kaiko research analyst Adam Morgan McCarthy told Decrypt.