Analyst Warns of US Dollar Collapse, Predicts Bitcoin Owners to Benefit
In a note to investors published Wednesday,
Chris Wood, Global Head of Equity Strategy at Jefferies, called bitcoin and gold
“critical hedges” against currency debasement and diminishing returns from inflation.
Wood explained
that in addition to reducing its balance sheet, the Federal Reserve has been raising interest rates at an unprecedented pace in its efforts to tame soaring inflation.
The Jefferies analyst warned:
“G7 central banks, including most importantly the Federal Reserve, will not be able to exit from unconventional monetary policy in a benign manner and will ultimately remain committed to ongoing central bank balance-sheet expansion in one form or another.” He emphasized:
Such a failure to exit from unorthodox monetary policy in a benign manner is likely to
culminate in the collapse of the U.S.-dollar paper standard to the benefit of both gold bullion owners and also owners of bitcoin.
Wood advised investors to regard their gold and bitcoin holdings as a type of insurance, rather than short-term trades. Additionally, he recommends that U.S. dollar-based long-term global investors, including pension funds, allocate 10% of their portfolios to BTC.
