The fall of the US dollar & the rise of Bitcoin coincided at the same time. So, let us find out the various factors in the background that have led to the consistent descending adjustment of interest rates on US Treasury bonds and substantive easing policies. These policies were instrumental in the selling of large amounts of US dollars, resulting in the fall of the dollar index. Going by the brand new data, the US dollar index has taken a beating and it is now languishing below 93. This fall is not only the steepest of this year, but also happens to be a two-year low. As for the US dollar offshoots market, short positions have also hit a new peak since April 2018. In fact, Global Hedge funds are expecting further erosion of the value of the US dollar: The betting pegs USD downfall to approximately $5.3bn this week to reach $24.5bn. Purely from the perspective of association, the connection amid Bitcoin & US dollar & gold & US dollar decreased, at the same time the interconnection between Bitcoin & gold strengthened. This has made gold & Bitcoin to realize their potential in the light of a tumbling US dollar index.
Demand for yellow metal surges
The economic prospect of gold can easily be explained by the downfall of the US currency, which has created a global demand for safe-haven assets like yellow metals. However, Bitcoin has some distance to cover to emerge as a safe-haven asset, the fact can’t be denied that it has the potential to be an alternative investment to gold. Also, as gold continues to dominate the mind of people, the greenback will increasingly flow to Bitcoin and other crypto currency avenues.
USD turns to USDT
Meanwhile, the demand for gold has come down, implying that more US currencies have made their way into the digital currency arena for stamping than before. Later on, these US dollars were turned into USDT, some of them made it to the exchanges. The USDT’s inpouring into exchanges improved by 282,539,130 USDT to 725,857.429 USDT on July 27, an important single day surge in 143 days. Despite a huge sum of USDT going into exchanges, data from Glass node indicates that the USDT amount is diminishing since April. During the same time, the Bitcoin equilibrium of exchanges has risen. Based on this, we can infer that the USDT going into exchanges were utilized to purchase Bitcoin.
Rise of Bitcoin
Observing these numbers, it clearly points that Bitcoin’s ascendancy this time has been drastically affected by the US dollar. It can be abridged as trails: There has been a steep fall of the US dollar index. The uncertainty scaled new heights , the value of gold multiplied. With gold value going through the roof high, investors begin to search for an alternative instrument of investment. A lot of USD turned into USDT, a large number of USDT flew into interactions. This led to the selling of USDT and purchase of Bitcoin. Balance of Bitcoin in exchanges rises. In case the dollar continues to fall, there is a huge chance of Bitcoin to rise. So, Bitcoin is a good investment option. If you wish to put your money in Bitcoin, then it is advisable to do so on a secure platform.
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