What is The Correlation Between Falling USD and Crypto Rising?
We know that the United States dollar has significant power in the global financial system in the world. USD became the global reserve currency for a long time ago. Some people think that if the US dollar goes down, the prices of cryptocurrencies like Bitcoin might go up to the moon. This idea is getting more popular with investors and experts, who believe that cryptocurrency prices could reach really high levels.
The United States debt ceiling refers to the legal limit set on the amount of debt the country can accumulate. When the debt ceiling is breached, it necessitates congressional approval to raise it further.
The government may print more money to have enough money to do what it needs to do and pay off what it owes. This might make the amount of money around go up and make things cost more.
This can erode the purchasing power of the US dollar and weaken its value in international markets. When things get tough, people might look for new ways to keep their money safe.
One of these ways could be to use cryptocurrencies like Bitcoin, which are not controlled by the government and can be accessed from anywhere.
The US government's choices about loans and how much money they put into the economy can make the value of the US dollar go up or down.
If the Federal Reserve adopts an expansionary monetary policy, characterized by low-interest rates and extensive money creation, it can lead to inflationary pressures and a decline in the US dollar’s purchasing power, which means investors may turn to cryptocurrencies as a hedge against inflation, driving up demand and potentially skyrocketing crypto prices.
While the idea of the US dollar’s fall leading to skyrocketing crypto prices is plausible, it is essential to note that the cryptocurrency market is highly volatile and subject to various risks. Many things like rules changing, hackers breaking in, and how people feel about buying things can make prices go up and down. Cryptocurrencies like Bitcoin are new assets compared to old-fashioned money.
If the US dollar goes down because of things like the debt ceiling, making more money, and rules from the Federal Reserve, it could make crypto prices change a lot. People are looking for new ways to save their money that will be worth a lot in the future. Cryptocurrencies, like Bitcoin, might become very valuable and keep your money safe from rising prices. It is important to remember that the cryptocurrency market can be unstable and risky.
What do you think?
