Analysts suggest Bitcoin could solidify its role as digital gold, but this shift may impact the U.S. economy.
Zach Pandl from Grayscale Investments believes a weakening U.S. dollar might drive Bitcoin to unprecedented highs. He anticipates that the dollar could significantly depreciate over the next decade or sooner, depending on upcoming election outcomes and economic policies.
Pandl, formerly a macroeconomic strategist at Goldman Sachs, warns that as U.S. debt rises—currently around $33.2 trillion, far exceeding GDP—the government might struggle with either defaulting or inflating the currency to manage debt.
This situation could enhance Bitcoin’s appeal as it remains immune to inflation due to its fixed supply of 21 million coins.
While the prospect of Bitcoin benefitting from a weaker dollar is intriguing, it’s important to note that the cryptocurrency market remains highly speculative. Investors should consider that Bitcoin’s volatility and its status as a relatively new asset class could introduce significant risks.
As such, despite its potential for growth, Bitcoin’s long-term stability as a store of value compared to more established assets like gold is still under debate.
After the long-awaited rate cut by the Federal Reserve, the crypto market started showing signs of recovery.
Raoul Pal, CEO of Real Vision and a prominent macro analyst, believes Bitcoin (BTC) is poised for significant breakout rallies, driven primarily by rising global liquidity.
As Bitcoin continues to strengthen its position in the market, BlackRock, a major financial institution, has released an updated report titled “Bitcoin: A Unique Diversifier.”
Federal Reserve meetings usually follow a predictable pattern, but this week’s Federal Open Market Committee (FOMC) gathering was shrouded in uncertainty.