How will Bitcoin respond to the fall of the US dollar in 2021?
Former head of the Asian office of Morgan Stanley investment bank Stephen Roach expects a record drop in the US dollar by the end of 2021.
This analyst recently published an article in which he predicted a 35-40% collapse in the US national currency. This will end Washington's economic hegemony.
Roach predicts that this year the federal budget deficit will reach 16% of GDP. The expert refers to data from the Congressional Budget Office. Moreover, the burden on the state treasury will increase throughout the entire 2021.
The pressure on the financial sector will provoke an acceleration of inflation and a depreciation of the dollar. Now the American currency is supported by stimulating measures from the authorities, but this policy will not be able to continue for long.
Precious metals and cryptocurrencies will benefit from a weakening dollar, Roach said. Bitcoin is now trading 148% higher against the dollar than it was in mid-March 2020.
However, this asset has enormous potential, as some institutional investors already recognize. Therefore, it will continue to grow in price.
Many observers periodically pay attention to the inverse correlation between Bitcoin and the dollar. When the US currency starts to fall in price, then BTC goes up. Accordingly, when capital leaves the cryptosphere, the US dollar strengthens.
At the same time, the former top manager of Morgan Stanley urges not to hope for a rapid rise in the value of bitcoin. The share of cryptocurrency in the global market is still very small. It will increase, but this process may drag on for many years.