Weak U.S. Dollar Drives Bitcoin Bull Market
As the U.S. dollar falters, gold and Bitcoin continue to gain momentum. These stores of value have shot up in price due to the global debt, anaemic economic growth and the Fed continually printing (unlimited) money. Together these variables contribute to a sustained period of weakness for the dollar.
Meanwhile, Bitcoin briefly reached $12,000 USD Sunday, August 9, before dipping again (floating around $11,893 at time of publication). This was its strongest weekly close in 2.5 years. Gold also hit an all-time high for five days in a row last week, trading at $2,029 USD at the time of publication.
What Does All This Mean?
In times of crisis, people will invest in a perceived safe haven asset as a hedge against inflation. In America, the Fed rapidly printed money in order to help its citizens in the short term (due to COVID-19), while risking the value of the dollar long term.
Smart investors can see the writing on the wall and offload their weakening U.S. dollars into something more tangible which historically has proven to hold value, like gold. But with Bitcoin outperforming gold (72% and 34% returns in 2020, respectively) during this crisis, this is a sign of Bitcoin now being viewed as a legitimate hedge against inflation.
A New Bull Market
Glassnode reported that 16.6 million small holder addresses are in use, a new all-time high from the previous total of 14.5 million stated in January 2018. This points to a surge in new investors entering the crypto market. This, coupled with sustained dollar weakness and BTC outpacing gold as a safe haven asset, could be the perfect storm for a multi-year Bitcoin bull market.
Influencers Investing in Bitcoin
Despite the recent Twitter hack, where celebrity accounts led people into donating bitcoin to an address which later proved to be a scam, more influencers continue to promote cryptocurrency. In Canada, even our weathermen are forecasting a bullish marketplace. Frankie MacDonald, a meteorologist based in Nova Scotia, has been using his platform to urge Canadians to buy Bitcoin. Taking to Twitter, MacDonald posted a series of videos sharing his views on Bitcoin with over 118,000 followers, advising viewers that Bitcoin is “worth more than American dollars.”
Among other influencers, comedian Bill Burr has stated he’s going to invest in Bitcoin for the first time and Joe Rogan continues his vocal support of the cryptocurrency on his wildly popular podcast.
Written by: Adam Farrell
Writer. Content marketing. A cloud-in-his head kind of guy. He loves to create and invent stuff. Good with words.