Global U.S. Dollar Shortage to Benefit Bitcoin, Says Crypto Twitter’s Biggest Bull

October 19, 2019 15:00 UTC

Many have been bearish on bitcoin after the dominant cryptocurrency breached support of $9,000 in September. The month-long consolidation around $8,000 is not helping either. It is only giving bitcoin haters more reason to scream their bearish outlook.

Peter Schiff forecasting bitcoin to plummet to $2,000. | Source: Twitter

Bitcoin’s technicals may not be pretty but global macro factors favor the king of cryptocurrencies. That’s according to trader and game liquidity theorist Majin. The analyst believes that the global U.S dollar squeeze will be highly favorable for the dominant cryptocurrency.

Bitcoin Serves as a Hedge Against Political and Systemic Risks

Everyday citizens are so focused on the trade war between the U.S. and China that most fail to see what’s really going on behind the curtains. There’s a shortage of U.S. dollars around the world and it appears that there’s nothing that the Federal Reserve can do to stop this pending crisis.

Logic dictates that bitcoin would be a casualty of this U.S. dollar crunch. If the smart money is in dire need of the greenback, it would make sense to sell their bitcoin holdings in exchange for U.S. dollars.

The liquidity game theorist begs to differ. In an interview with CCN, the analyst explained why the U.S. dollar squeeze is bullish for the number one cryptocurrency. Majin said,

Bitcoin’s unique selling proposition is being a storage of value entirely uncorrelated to the financial system or central bank policies.

In August, Markets Insider published an article about how bitcoin is becoming attractive to investors because the cryptocurrency is an isolated asset. It is not influenced by market factors such as interest rates and other geopolitical tensions such as the trade war.

Majin is betting that the tricky state of the markets will eventually push bitcoin to greater heights. The trader said,

Regular markets are at a very awkward and risky state for large capitals.

The analyst added,

The political and systemic risks in regular markets are not priced in. That’s why negative interest rates work for now. But all textbook conditions and correlations are faltering, destabilizing.

When asked about the systemic risks, the analyst sees the following:

  • High debt environment
  • Fed capital injections
  • The S&P 500 trading close to all-time highs
  • Low interest rates
  • European countries stagnating
  • General uncertainty about policies

According to Majin, these factors are bullish for bitcoin.

A Young and Early Asset Like Bitcoin Appeals to Large Investors

When the dominoes start to fall, Majin believes that hedge funds and investors will flock into bitcoin to protect their capital. On top of being uncorrelated to the legacy financial system, the cryptocurrency has another attribute that makes it attractive to investors. The trader revealed,

Bitcoin is also less risky for large capital because it’s such an early and young asset. Hence, the recent super-exposure and acceptance of BTC with hedge funds or financial analysts in general.

The analyst added,

Many hedge funds are publicly calling BTC a great hedge.

When asked why a young asset is attractive to investors, Majin replied.

Bitcoin is relatively easier to control versus the huge global regular finance market.

Ultimately, this bullishness has a price. It is likely that those who hop on the bandwagon late will be the ones to pay.

Disclaimer: The above should not be considered trading advice from CCN. The writer owns bitcoin, Ethereum, and other cryptocurrencies. He holds investment positions in the coins but does not engage in short-term or day-trading.

This article was edited by Sam Bourgi.

Last modified: October 19, 2019 14:55 UTC

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@kirilnikk123

Kiril is a CFA Charterholder and financial professional with 5+ years of experience in financial writing, analysis and product ownership. He has a bachelor's degree with a specialty in finance and lives in Canada. Kiril’s current focus is on cryptocurrencies and funds, as he does his own crypto research and is a Product Manager at Mitre Media. He also has his personal website, InvestorAcademy.org where he teaches people about the basics of investing. He owns Bitcoin, Ethereum, and other cryptocurrencies. He holds investment positions in the coins but does not engage in short-term or day-trading. Follow the author on Twitter @kirilnikk kirilnikk123@gmail.com