Saturday, February 4, 2023

In 2018, Dollar Hits Three-Year Low as Bitcoin Poised for New Highs

In 2018, Dollar Hits Three-Year Low as Bitcoin Poised for New Highs

At the World Economic Forum in the resort town of Davos, U.S. Treasury Secretary Steven Mnuchin just argued the sinking dollar would bring positive trade benefits. It’s a strategy that, while potentially having short-term merit, will ring funny to the ears of Bitcoiners — especially as the bitcoin price may be poised to hit new all-time highs in just weeks. 

Also read: Bitcoin Gets a C+, Ethereum B as Weiss Ratings Grades Cryptocurrencies

Join the Bitsonline Telegram channel to get the latest Bitcoin, cryptocurrency, and tech news updates:

A Tale of Two Coins

At the ongoing Davos forum in Switzerland — itself clamoring as of late to become “crypto nation” numero uno — Sec. Mnuchin applauded the weakened U.S. dollar for its trade implications.

“Obviously a weaker dollar is good for us as it relates to trade and opportunities,” Mnuchin said in response to the dollar hitting a three-year price low on January 24th, concluding that “[it’s] not a concern of ours at all.”

Ours, indeed, as Sec. Mnuchin’s position here suggests the official economic vision of the Trump administration. Last spring, President Donald Trump argued that the dollar had become “too strong.”

The dollar’s getting weaker.

Such a notion of too strong isn’t even in the crypto-economical lexicon right now, as adoption and moonshots — or outrageous surges in value — are still holy grails for cryptocurrency enthusiasts in the primordial cryptoverse. And bitcoin is the original moonshotter, of course, having seen a surge from $233 USD to $19,800 over the last three years while the dollar has sunk to new lows in the same span.

But, while Trump and Mnuchin have a point to the extent that a weak dollar could provide a short-term boon to U.S. exports, the strategy could lead to all sorts of nasty economic problems down the road. The most predictable of these problems would be increased deficit spending, surging interest rates, an all-out trade war with China, and exploding inflation.

Alas, comparing the trajectories of the dollar and bitcoin are somewhat like comparing physical apples to digital oranges. Even still, bitcoin is a cryptocurrency, emphasis on the currency hereand its cryptoeconomic backers applaud when it rises, not when it falls.

The grand takeaway, then? Sec. Mnuchin has his reasons for applauding the falling value of the dollar. But his inflation-causing reasons for doing so may make it all the more profitable for Bitcoiners and cryptocurrency holders in general to HODL (“Hold on for dear life”) and gain against USD in the coming years.

Dollar Down, Bitcoin to $30,000?

Speaking of potential rises, Bitsonline resident technical analyst Ramiro Burgos has now set the bitcoin price’s mid-term price objective as being approximately $30,000. The so-called trigger angle would be the bitcoin price bursting through resistance lines at $14,000.

Burgos has also placed ascending support for the current number one cryptocurrency at around $9,000.

So, while bitcoin can certainly bounce around considerably in the channel between $30,000 and $9,000 in the coming weeks, it would have to fall all the way down to a measly value of $233 to match the U.S. dollar’s current downward skid. Nothing’s impossible, but $233 seems most unlikely for bitcoin any time soon.

What’s your take? How do you project the U.S. dollar will perform in the coming years compared to bitcoin? Let us know your opinion in the comments below. 

Images via Wall Street Journal, CNNMoney

Bitsonline Email Newsletter