August 13, 2020
The dollar’s recent deterioration has economists calling for the foreboding. While in the discussion about overwhelming the asset, other opposing currencies and even gold are considered alternatives that can be the next global reserve currency. Though, according to one ETF manager CEO, Bitcoin has also surfaced as an “alternative to the dollar” and could one day undertake its role.
Dollar’s continuous decline triggers conversations of alternative currencies
The dollar being the global reserve currency isn’t an easy one but has a ton of benefits. Its dominance has aided the United States’ economy flourish over the last hundred years, making it a superpower across the world.
All assets in the world trade act as the base currency in which all exchange rates are determined. The dollar has long relished its power mostly unopposed, but times are changing, the tides are revolving for the US, and its crown is crumpling the dollar.
Since the global economy orbits around this main world currency, maintaining the spot is not easy. The United States has been required to print an increasing number of money supply to prevent recession and help the citizens withstand the crisis from the country’s lessening GDP.
The dollar’s weakness has started conversations about its ensuing end, but signs show that the currency is equipped for a major retort. This could be responsible for the recent pullback in Bitcoin and gold.
ETF Manager Declares Bitcoin Has Cemented Itself as a Substitute to US Dollar
Discussions remain about the potential alternatives to the dollar. Stephen Roach from JP Morgan pointed out that the upcoming digital yuan, gold, or even Bitcoin can be an alternative to the dollar. Others have begun to agree to that sentiment, including CEO of ETF manager GraniteShares, Will Rhind.
“Bitcoin’s rise is the same story as gold. Investors are looking for alternatives to stocks, bonds and the dollar,” he told CNN. “Gold is the currency of last resort, but bitcoin has cemented itself as an alternative to the dollar as well.”
While Bitcoin’s safe refuge tale fizzled out in late 2019 as the asset crashed and gold sustained to gain, a current trend says it’s recurring in a major way. This most recent round is approaching from hedge fund managers.
Just recently, the Nasdaq-listed MicroStrategy revealed a new 21,000 BTC investment to the SEC, stating that cryptocurrency is a “reasonable hedge against inflation.” Another famous billionaire hedge fund manager, Paul Tudor Jones, compared Bitcoin to gold’s role in the 70s. Finally, the highest British fund with billions of pounds worth of assets under supervision is considering allotting as much as 30% of their gold holdings into Bitcoin.
This hedge fund manager states that Bitcoin has grasped its now or never moment with institutions. These institutions are ready to adopt the cryptocurrency alongside their gold holdings and other hedges against the dollar, stocks, bonds, and other failing investments.
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