2023-08-14 16:56:56
Losing ground to the U.S. dollar could cause the bitcoin price to rise
De-dollarization is a phenomenon that has been around for quite some time, but has begun to evolve noticeably in recent years. Despite the fact that cryptocurrency was created as a global currency, independent of fiat currencies, the devaluation of the U.S. dollar can play to its advantage.
De-dollarization is the devaluation of the U.S. dollar because other currencies have taken its place as the world's reserve currency for trading oil and other commodities. Undermining confidence in banks and the Fed pushes countries away from the U.S. dollar, forcing them to use their own currencies.
China is now the largest country whose national currency is beginning to be used in trade. The state already has agreements with Australia, Russia, Japan, Brazil and Iran.
Recently, Alexander Babakov, deputy chairman of the Russian State Duma, said that the above countries may create their own cryptocurrency, secured not by gold, but by earth and rare-earth metals.
This will lead to the fact that the U.S. dollar will lose its position in the global economy, which will further weaken its power. And this situation could be a trigger for the growth of cryptocurrencies.
After the bankruptcies of Silicon Valley Bank, Silvergate Bank and Signature Bank, bitcoin separated from the stock markets and began to rise to the current $28,000.
At the same time, bitcoin's correlation to gold is rising, reaching a figure of 0.92 on April 3. During 2022, this correlation was much lower due to volatility, but current conditions reinforce the shelter asset's status, which could contribute to hyper-bitcoinization.
The term refers to bitcoin becoming the dominant form of currency around the world, which many experts predict is possible in the medium term.
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